Pethokoukis

Case closed: The Reagan Recovery vs. the Obama Recovery in two charts

In a new book on the economic performance of the twelve U.S. presidents since World War Two, the author ranks Ronald Reagan 8th and Barack Obama 9th.

Now, I wrote yesterday why I think the book’s rating system is flawed overall, and specifically why Reagan deserves a much higher ranking — if not the top ranking.

But it is also extremely weird that Reagan and Obama are right next to each other. And I think these next two charts demonstrate why it is so strange.

First, here is cumulative GDP growth during the first three years of the Reagan recovery and the Obama recovery, using the dating system of the National Bureau of Economic Research and optimistically assuming 2% growth for the second quarter of this year:

Big advantage to Reagan. Second, here is a comparison of net new nonfarm payrolls created over the first 35 months of the two recoveries, adjusted for the growth in population since the 1980s:

Massive advantage to Reagan.

Now the book looks at the entire presidencies of the twelve, and perhaps Obama’s next four years, if he gets a second term, would be better than his first four. But Reagan’s second term saw average GDP growth of 3.6% and the unemployment rate fall to 5.3%. That’s a high hurdle for Obama to clear.

 

13 thoughts on “Case closed: The Reagan Recovery vs. the Obama Recovery in two charts

  1. This is a surprise? Not to me. Remember when they promised in 1965 that by 1974 Medi(s)care would not cost over $8Billion per year but instead in those few short years was over $70Billion per year? God help us!!!

  2. Why would anyone make such a comparison? The world has changed since Reagan was in office. What about the impact of globalization on the U.S. economy and relocation of a majority of manufacturing overseas? It’s absurd to make this comparison when the world has changed so much since that time. You might as well compare the current recovery from the depression. What is not factored into this comparison is some of the means Reagan used for economic recovery like reducing spending by slashing social programs and closing mental institutions nationwide. Numbers of homeless in the U.S. would probably be more in line with what exists in rest of the developed world today if people weren’t literally thrown into the streets during Reagan’s tenure. Yes, the economy recovered, but on the backs of the less fortunate which has diminished the quality of life for everyone and the resulting increase in poverty negatively impacts our economy and has become a national disgrace.

    Wouldn’t it be great if we could learn to be more balanced in our analysis and not oversimplify results to support our political biases? Imagine if we shifted back to reporting news instead using the “infotainment” approach of the 80s to increase media profit? It’s difficult to arrive at legitimate conclusions when no one really knows the truth anymore….

    • “What is not factored into this comparison is some of the means Reagan used for economic recovery like reducing spending by slashing social programs and closing mental institutions nationwide.”

      This is not only totally inconsistent with what I’m sure is your belief in demand-side Keynesianism – which would dictate that “reducing spending by slashing social programs” would be doomed to failure as policy for “economic recovery” – it isn’t even true. Nor is any “increase in poverty.”

      http://webcache.googleusercontent.com/search?q=cache:GS0gtNSo1rkJ:old.nationalreview.com/reagan/rubensteinb200406101425.asp+the+real+reagan+record+nationalreview.com+poverty&cd=2&hl=en&ct=clnk&gl=us

      http://webcache.googleusercontent.com/search?q=cache:gmYB_YYQ_1sJ:old.nationalreview.com/reagan/reynolds200406101357.asp+the+real+reagan+record+nationalreview.com+poverty&cd=1&hl=en&ct=clnk&gl=us

      • Your rationale is based on a commentary from the National Review, a conservative source. The poverty level went up and did take a dip as shown in the article. After that it went back up and is now at its highest level again.

        I was living in New York when Reagan closed all of the government run mental institutions just a few months after he took office. I saw the mentally ill people on the street as they could only stay in one institution for a few days. People sought relatives who were turned out of the hospitals- it was pretty sad to witness and is well documented. If you want to know the truth, just ask anyone who lived in a big city during that time. I heard Reagan’s speech when he made the announcement to close the hospitals. His rationale was because there was mistreatment of patients at some hospitals, they should ALL be shut down. Most of the homeless at that time were mentally ill. At that time, people were shocked about the situation. Now it has become accepted as part of our lives, as no one has the courage to really address this problem.

        • Shawn | June 29, 2012 at 7:06 pm
          “Your rationale is based on a commentary from the National Review, a conservative source.”

          Walter, facts speak for themselves. If you have no substantive dispute with National Review’s figures – and they are all from objective, credible sources on the federal budget, I fail to see how you could – you have no argument. A fact doesn’t fail to be valid because you dislike or disagree with the messenger.

          “The poverty level went up and did take a dip as shown in the article. After that it went back up and is now at its highest level again.”

          What the poverty rate did 25 years after Reagan left office is not germaine to your criticism of his economic management during his tenure. Did he leave office with a rate lower than when he took it? Yes, he did, and you don’t dispute that. So what’s your point?

          RE: homelessness, HUD outlays ROSE during Reagan’s tenure. And there is much more complexity to homelessness in the 80s than the liberal template would have you believe.

          http://webcache.googleusercontent.com/search?q=cache:-pch1AekiZoJ:old.nationalreview.com/reagan/horowitz200406101407.asp+real+reagan+record+inventing+homelessness&cd=1&hl=en&ct=clnk&gl=us

          Your New York anecdote is what it is, I suppose, but even if true doesn’t make for a national trend, obviously. And this too makes for quite a weak, if not nonsensical, argument if the subject is a critique of Reagan’s overall economic management. How was closing mental institutions to be some tool of economic growth?

        • First of all, what is the US Government doing running mental institutions in the first place? Just because government does something does not make it right or even efficient. I am sick and tired of the NOBAMA followers assuming that government works properly. It is a trillion dollar plus a year cover charge and we the people have to pay for it. Even NOBAMAS own budgets have not gotten one vote in Congress. Wake up people!! and I am not saying Romney is the true answer but with this record would you want NOBAMA to run your company?

        • well.. That is a dumb comeback. Mentally Ill people? Really.. Blame Reagan for that? Each State has to take care of their own.. The country should not have to pay for New York’s Mentally ill people.. Keep your liberal mental illness in New York..

    • If you don’t know your history you are doomed to repeat it. Tax and spend does not work, never has never will. Show me one example and I will show you 100 that failed. Even if you can come up with 1 why on earth would you opt for a 1 in 100 chance when lower taxes and reduced government spending & pro business growth policies fix the the problem every single time.

  3. During this recovery the US has been able to bring private sector employment to pre-recession levels while reducing the number of public sector workers (see Link 1), both situations being ones that conservatives favor. Yes, as suggested by Mr. Levin, the US needs a Reagan like recovery (see Link 2) which implies more State and Local government jobs (read spending) to stimulate consumption. So which will it be: more government or prolonged recovery?

    Link 1: http://www.businessinsider.com/obamas-first-term-and-bushs-first-term-2012-6

    Link 2: http://jerrykhachoyan.com/what-obama-needs-is-a-reagan-style-recovery-in-jobs/

  4. To Walter Thoma: Are you some kind of a waterhead? Wasn’t it your Bill Clinton who signed away all of our manufacturing jobs with NAFTA? But that’s beside the point. Thanks to your idiot democrats, the US now has the highest corporate tax rate on Earth. If morons like you would just let go of your petty jelousies, we could steal our manufaturing markest back, and to hell with the rest of the world!

  5. “Your rationale is based on a commentary from the National Review, a conservative source.”

    Walter, facts speak for themselves. If you have no substantive dispute with National Review’s figures – and they are all from objective, credible sources on the federal budget, I fail to see how you could – you have no argument. A fact doesn’t fail to be valid because you dislike or disagree with the messenger.

    “The poverty level went up and did take a dip as shown in the article. After that it went back up and is now at its highest level again.”

    What the poverty rate did 25 years after Reagan left office is not germaine to your criticism of his economic management during his tenure. Did he leave office with a rate lower than when he took it? Yes, he did, and you don’t dispute that. So what’s your point?

    RE: homelessness, HUD outlays ROSE during Reagan’s tenure. And there is much more complexity to homelessness in the 80s than the liberal template would have you believe.

    http://webcache.googleusercontent.com/search?q=cache:-pch1AekiZoJ:old.nationalreview.com/reagan/horowitz200406101407.asp+real+reagan+record+inventing+homelessness&cd=1&hl=en&ct=clnk&gl=us

    Your New York anecdote is what it is, I suppose, but even if true doesn’t make for a national trend, obviously. And this too makes for quite a weak, if not nonsensical, argument if the subject is a critique of Reagan’s overall economic management. How was closing mental institutions to be some tool of economic growth?

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>