Obama to repeat Reagan’s rebound? Not so fast

It has been easy, to the point of being facile, for Democrats to draw parallels between the first terms of Ronald Reagan and Barack Obama. Both inherited economic troubles and didn’t dispose of them immediately; both took their lumps in the midterms; both had sagging approval ratings the year before standing for re-election.

Reagan won re-election in a 1984 landslide. Ergo, Obama will do the same in 2012.

Obama has the advantage of facing a field of GOP contenders that has yet to impress, although it’s still rounding into shape. But the single biggest factor will be the economy — and on that score, Investors Business Daily has an extremely telling chart:

Reagan recovery vs. Obama recovery

Credit: Investors Business Daily

So, only once in this recovery has quarterly growth topped the worst quarter of the Reagan recovery. And the effects of compounding — with those big gains coming on top of big gains, while our small improvements build on smaller improvements — can’t be ignored. Likewise the very sharp downward turn in unemployment three decades ago — from a higher initial level, as Obama’s defenders often forget.

The chart goes with an editorial explaining the differences between the two recoveries, which I recommend. Those differences and others might be debated, but the political effect of a languid recovery versus a spirited one really can’t be challenged.

Is there still time for a sharper uptick between now and the 2012 elections? Of course. But, to help Obama’s chances, it will have to be very sharp and come very soon if it’s going to make up for the sluggishness we’ve seen.

– By Kyle Wingfield

69 comments Add your comment

Dirty Dawg

April 29th, 2011
9:38 am

Look, the reason Obama’s ‘approval’ ratings are low is that folks haven’t really yet focused on who to blame for this mess. Believe me, before the Nov ‘12 vote it’ll be clear and you’ll be wondering what hit ya’.

David

April 29th, 2011
9:41 am

The Editorial is complete malarky because it fails to understand the difference between the two recessions. The 1982-83 Recession was fundamentally driven by the Fed. The Fed jacked up interest rates tremendously, all the way to over 20%, finally working to whip the inflation of the 70s. Once that happened, the Fed eased off the artificial brakes they’d thrown on the economy. Once that happened, recovery bloomed. For a myriad of reasons (housing crash, Wall Street crash, state budgets so hammered that most of the expansionary federal fiscal policy has been swallowed by contractionary state and local budgets) this recession is far worse, and unlike the 1982-83 one, can’t be magically solved by flipping a switch in the Federal Reserve. Comparing the two recoveries is a false comparison.

Bart Abel

April 29th, 2011
9:55 am

Republicans are doing everything they can to hurt the employment specifically to hurt Obama’s chances for reelection. The Democrats passed numerous pieces of legislation to reduce unemployment when they controlled the House only to have Republican minority block up-or-down votes on the legislation in the Senate. Reporting on this legislation and these filibusters has been scant.

When Republicans took control of the House, they then passed a budget that would throw hundreds of thousands out of work, according to most economists. I actually haven’t seen economists estimates about how the budget that finally passed both chambers would affect employment, but I’m not optimistic.

The recession of the 70s and early 80s was caused by high oil prices, and Reagan benefited when OPEC began to fracture. This fracture had nothing to do with U.S. policy.

This recession today, however, was caused by bank failures which were caused by the anti-regulation ideology that’s still promoted today. We still haven’t been able to plug the hole caused by foreclosures, reduced housing prices, and the resulting unemployment, in part, because the media is focused on deficits instead of jobs.

Adding insult to injury, we still have to contend with conflict in the Middle East both with our military and at the gas pump. Since President Reagan dismissed President Carter’s energy proposals intended to wean us off of foreign oil, then we can thank him, among others, for our high gas prices today.

jo yo

April 29th, 2011
9:56 am

It would help allot if the Republicans would actually participate in the recovery instead of hopeing for this administrations failure.

DW

April 29th, 2011
9:58 am

Boy this comparison sure makes me wish we had McCain and Palin especially in the WH. Im sure more tax cuts for the wealthy would have done so much more. *rolls eyes*

Don't Tread

April 29th, 2011
10:03 am

The Obama “recovery” will never match the Reagan recovery due to the fact that we still had a manufacturing base in 1984.

Consumer goods are mostly made in China nowadays. I suppose Obama can thank his good buddy Clinton for that.

Dr. Pangloss

April 29th, 2011
10:14 am

The polls show Obama’s approval rating running like this:

CBS/New York Times

46 45 1
4/15-20/11

ABC/Washington Post

47 50 – 3
4/14-17/11

McClatchy-Marist RV

44 49 – 5
4/10-14/11

CNN/ORC

48 50 – 2
4/9-10/11

Ipsos/Reuters *

46 49 – 3
4/7-10/11

Fox RV

49 47 2
4/3-5/11

The leftmost number is the percent approving. The next is the percent disapproving. The rightmost number is the difference between the two.

So Obama is looking pretty good for April of 2011.

JF McNamara

April 29th, 2011
10:14 am

That’s a pretty big stretch to imply a high correlation between falling unemployment of two completely different recessions. Its an even bigger leap to say its a big factor in either Presidential election.

DW

April 29th, 2011
10:18 am

Well put again McNamara.. i like this guy

Corey

April 29th, 2011
10:24 am

The worst recession since the Great Depression, there is no comparison Kyle. You know it, but I also know your audience. Two wars, a collapse of Wall St., an imploding real estate market and a worldwide recession, state budgets in shambles, two auto makers facing extinction, giant investment institutions defunct. Kyle, please.

carlosgvv

April 29th, 2011
10:33 am

What country are you talking about? If there is any real recovery in this country, I don’t see it.

DW

April 29th, 2011
10:35 am

@Carlos

The overall market is up 100% since bottoming and unemployment is falling. What do you measure a recovery by?

Hillbilly Deluxe

April 29th, 2011
10:41 am

If there is any real recovery in this country, I don’t see it.

Haven’t seen it where I live either. People are still losing homes and jobs and businesses are still closing. The Wall Street Casino doesn’t have much to do with the economic health of the working people.

Jerry Springer Answers to Frontline Questions

April 29th, 2011
10:51 am

@Carlos, DW and Kyle. 1. Can any of you spot the artificial demand inflating stock prices? 2. Can any of you identify the cause of the shift in corporate priorities from long term growth to short term profits? The Stock Market is not an accurate measure of national economic wellbeing. (hints: 1. see tax code; 2. Who actually buys stock?

jd

April 29th, 2011
10:55 am

I understand the price of gas went up $1 since the Republicans took over the House

buck@gon

April 29th, 2011
10:55 am

Dirty Dawg, David & Bart,

First, the fundamental point of order. It’s embarassing DD, when a gentleman from Tech is required by his personal code of ethics to inform someone the correct way to spell “dog,” for me, because you’re here on the blog, for you because….well, you probably don’t get it.

“Look, the reason Obama’s ‘approval’ ratings are low is that folks haven’t really yet focused on who to blame for this mess. Believe me, before the Nov ‘12 vote it’ll be clear and you’ll be wondering what hit ya’.”

You’re joking, right? We heard nothing but focus on blame for the recession on Bush from Obama. Finally, more than two years after the inauguration, the kabosh seems to have been placed on phrases like, “mess we inherited,” and those “who drove the car into the ditch.” Don’t know what planet you’re on, but I’m sure there they must dream up what you call the truth like our government wishes money and laws into existence as well as the beneficent consequences that are supposed to follow.

“The Editorial is complete malarky because it fails to understand the difference between the two recessions. The 1982-83 Recession was fundamentally driven by the Fed. The Fed jacked up interest rates tremendously, all the way to over 20%, finally working to whip the inflation of the 70s. Once that happened, the Fed eased off the artificial brakes they’d thrown on the economy. Once that happened, recovery bloomed. For a myriad of reasons (housing crash, Wall Street crash, state budgets so hammered that most of the expansionary federal fiscal policy has been swallowed by contractionary state and local budgets) this recession is far worse, and unlike the 1982-83 one, can’t be magically solved by flipping a switch in the Federal Reserve. Comparing the two recoveries is a false comparison.”

“…inflation of the 70’s….” We’re trying to prevent inflation now. If inflation happens, it would be in the government’s best interest monetarily and fiscally speaking to raise rates because it could then pay off debt more easily by monetizing it. This time, however, the risks for America are far greater, because worldwide, the abandoning of US dollars as a global currency has already begun PRIOR to what could be an intense period of inflation.

“… the 1982-1983 recession…” Interesting way of putting that. Most people I’m sure who look at history with such a distoted view would consider a recession in 1982-83 a bad thing. Most people I know, would consider the economy in 82-83 in far better condition than, as you say, the “inflation of the 70’s”.

Driven by the Fed? We could engage here and now in a discussion about fiscal (Congress) vs. monetary (Fed) policy that causes problems such as inflations or recessions, but the problem is that as of late, the foolish fiscal policy of Congress often forces the Fed’s hand. That was true in the 70’s and it is true again now.

LinkReport this comment.Bart Abel

April 29th, 2011
9:55 am
Republicans are doing everything they can to hurt the employment specifically to hurt Obama’s chances for reelection. The Democrats passed numerous pieces of legislation to reduce unemployment when they controlled the House only to have Republican minority block up-or-down votes on the legislation in the Senate. Reporting on this legislation and these filibusters has been scant.

Puhleaze! The other side of this coin, if you want to play that game, is that a crash occured exactly six weeks before a Presidential election in 2008. If I wanted to play the boogey man game with you, I don’t think you’d win. I seem to remember Harry Reid never admitting that economic times were good when Bush was in office.

AND, the Obama admin is doing all it can to erase existing available jobs (that is, to shrink the pool of jobs statistically) so that the unemployment rate appears to be getting lower. The media is entirely complicit in this. Odds that the unemployment rate will be lower than 8% by 2012 even if long-term unemployment is at Great Depression levels? 100%. NY Times who already idolize Obama as the smartest man here on earth not yet in deified glory will see to it.

DW

April 29th, 2011
10:56 am

I cant vouch for the accuracy of the measure of the stock market on main street economic well being but i think a 100% overall gain represents that things are not exactly falling off a cliff..

DW

April 29th, 2011
10:56 am

@jd

thats as retarded as blaming obama for gas prices

Ragnar Danneskjöld

April 29th, 2011
10:57 am

Good morning all. The question that Americans will address in 2012 revolves around the “management” of the recession. Reagan was re-elected in 1984, not because the economy was then-roaring – that was yet to prove – but because he had articulated both a plausible cause for the long-term malaise and offered a cure that had visceral validity.

In contrast, Chauncey seems oblivious to the Federal-causation for the problems that arose one year after the democrats took control of Congress. His cure – the notorious “stimulus” – has left the country in far worse shape financially. Compounding the problem he proffered ObamaCare, to wreck the world’s best healthcare system. Extraordinarily few leftists want to talk about the democrat initiatives since 1/1/2007, preferring to discuss irrelevant nonsense.

By the way, Reagan was a pre-Keynes economics major. In contrast, the “world’s smartest president in the history of civilization” seemingly is not conversant with economics. Leftists prefer a world where the blind leads the blind.

The Snark

April 29th, 2011
11:06 am

One big reason that Reagan won re-election was that he faced a weak opposition candidate who lacked a coherent message that was relevant to the country’s current problems.

Sound familiar?

redneckbluedog

April 29th, 2011
11:23 am

This is silly…GW screwed up the economy way more than JC…JC’s budget deficit was tiny and Reagan just cut taxes against it…..It’s a lot harder to reduce the deficit than it is to create one…Just ask Dick Cheny…..So, how much money is Gov. Deal asking the President for to rebuild after the storm..? Just asking….So it’s all fun and chest bumping until you actually NEED the money, huh..? The same case goes for Medicare…..

JohnnyReb

April 29th, 2011
11:25 am

The reasons Obama will lose in 2012 are more than the economy. The Left knows it, but to counteract the continuous failures of the community organizer they talk, write, and broadcast as if Barry will win in a cake-walk (just look above for examples). The truth is, Obama stands for, acts, and administers an ideology that is contrary to the foundations of America and the majority of its citizens. Look no further than the recent mid-terms for evidence of that. Look no further than the Wisconsin judge election against the biggest fight the unions and Obama backed instigators could muster. Obama will join the peanut farmer on the list of one-term wantabees even if gasoline is back to two bucks a gallon.

redneckbluedog

April 29th, 2011
11:27 am

This is more like Roosevelt’s recovery vs. Obama’s….Roosevelt raised income tax rates to 91% on people making over $200,000….and the T-bags did not go crazy…they moaned and complained but realized it would help the country…You don’t have that patriotism now….The squidbillies hide their greed behind socialist fear-mongering…..While real people suffer…Just ask folks in Catoosa county…They need help, socialist or not…..Incidentally, those 91% tax rates were reduced to 84% and lasted until 1963….

Kyle Wingfield

April 29th, 2011
11:28 am

JF: You don’t think the state of the economy, including the UE rate, will be among the very biggest factors in next year’s election, if not the biggest?

David, Corey and others: Like I said in the OP, the causes are subject to debate. But don’t you think Obama will be judged on where things stand four years later? (And for the record: I think presidents get too much blame/credit for the economy, except to the degree that their policies make things worse. But that’s pretty much beside the point, because the public isn’t likely to stop that practice in the next 18 months.)

joe

April 29th, 2011
11:29 am

“we can thank him, among others, for our high gas prices today.” If your “among others” is Obama, then I’ll give you a pass. He’s the one pushing his green agenda, which will be good for the long term, yet do nothing for the short term. He fails to see how drilling in Alaska, Dakotas and our gulf will help lessen our dependence on foreign oil, create much needed jobs (also by building newer efficient refineries, and lower the price of gas which helps every day average Americans get by. Because of this oversight and un-american, socialist policies, Obama will lose in 2012 if the GOP can pull it together soon and put up a good tea party-ish, debt cutting candidate. Bash Trump all you want, but I like his take no prisoners approach to all of our ills today.

Kyle Wingfield

April 29th, 2011
11:32 am

redneckbluedog: So, you think people who would like a different system should be punished because the system hasn’t been changed to their liking yet? As long as the federal government still takes the lion’s share of tax revenues, states (or, in the case of Medicare, individuals) don’t have the means to pursue the alternatives they might favor.

They “NEED the money,” as you put it, because Washington taxed it away from them.

Jerry Springer Answers to Frontline Questions

April 29th, 2011
11:34 am

No guesses Kyle? Are you beginning to understand that being a political commentator doesn’t make you an economist?

JohnnyReb

April 29th, 2011
11:34 am

Trump let his ego get the best of him last evening where at a fundraiser he repeatedly dropped the F bomb. The public will accept their leaders swear occasionally and mostly in private, but they won’t vote for man who repeatedly uses the MF and F words in a public address/comments.

Bart Abel

April 29th, 2011
11:42 am

Joe,

Drilling in America is currently at an all time high. To my dismay, Obama continues to grant permits for new drilling despite the fact that there’s little to no evidence that safety or containment measures have improved since the BP disaster last year. Also, oil produced in America goes on the world market, and even without restriction, would have little to no affect on overall supply.

I misspoke when I wrote that we need to reduce our dependence on foreign oil. I meant that we need to reduce our dependence on fossil fuels. The technology for clean energy sources, especially solar, is solid and reliable. The only thing missing is political will.

JP

April 29th, 2011
11:43 am

Good Column Kyle, and I never agree with you on anything.

Assuming things on the foreign policy front don’t go all crazy, Obama will be judged on Unemployment, direction of GDP growth, and gas prices/inflation. I am not sure how much the deficit will come into play, maybe it will be the #1 item on the list (?)

I find it hard to believe the R’s can’t field a formidable candidate based on the uncertain environment out there – and again, I am saying that as a DEM.

JF McNamara

April 29th, 2011
11:46 am

The unemployment comparison for two recessions is dubious. I do think the economy will be a talking point and small factor, but I’m not sure it played a role in Reagan’s re-elecetion or will have much to do with Obama getting reelected. Reagan (probably) would’ve won anyway, and Obama (probably) will too. They both are likable and did a pretty good job considering what they were up against.

For those doubting the validity of the stock market as an economic indicator, the stock market is our best indicator of the free market. There are bubbles, but, by an large, the valuation of our companies is accurate and a good proxy for the overall health of the economy with only nominal manipulation and no political spin. All indexes(small caps to large cap) have shown dramatic improvement in valuation, indicating that we have (and are) recovering.

Moderate Line

April 29th, 2011
11:49 am

Comparing the two recoveries is a false comparison.
+++
I would agree with you that they are two different economic recessions but I think comparing the two recession for their influence on the political system is not a false comparison. Like it or not the recovery will influence the 2012 election just as the recovery affected the 1984 election. It is the liberals or Democrats who have generally been the ones who pointed to Reagan abysmal numbers prior to the 84 elections to keep the Right and the Republicans from gloating about Obama poor ratings.

Whether one recession is worse than the other is matter of opinion and dependent upon what factors you considered. The max unemployment for the recession in 81 was 10.8% while the max for 2007 was 10.1.

The length of the 81 recession was 16 months and the length for 2007 was 18 months. Their numbers are very close.

The two main differences in the recession are the 2007 recession was deeper and the recovery was worse.

The 81 recession had a three quarters of negative growth of -3.2,+4.9,-4.9. -6.4,+2.2,-1.5,+.3.
The 2007 recession had -.7,+.6,-4,-6.8,-4.9,-.7. In terms of the economy shrinking the 2007 economy was worse. The economy shrunk by around 11.5% in 81 while the economy has shrunk by 15.5% in 2007.

The biggest difference is in the recovery. In the 81 recession the growth was 5.1,9.3,8.1, 8.5, 8. For the 2007 recovery the growth per quarter has been 5, 3.7, 1.7,2.6 and 3.1.

http://www.nber.org/cycles/cyclesmain.html
http://www.tradingeconomics.com/united-states/gdp-growth

JP

April 29th, 2011
11:51 am

JF – Do you think if the economy doesn’t improve much between now and mid 2012? Obama will be re-elected? What will the 2012 narrative be? Or is it too early?

TRUTH

April 29th, 2011
11:55 am

Again @Kyle, pure Right Wing Bull Puckey. The Republicans are squarely at fault here and your assistance in “revisionist” history continues to be astoundingly stunning. President Regan, who I voted for by the way, was not handed an economy on the brink of total collapse, nor did he have several wars ongoing in which two major wars were unfunded appropriately. The “deficit” the GOP is harping about came about because the President put the cost on the ledger. I think that has a direct impact on that argument. There were regulatory guidelines in place to PREVENT the money grab that has been ongoing from Big Banks, Insurance Companies, et. al. OPEC has always been problematic and will remain so. Period, Point Blank. Further, Mr. Regan did not “manage” a government rife with politicians FUNDED by lobbyist and “FREEDOMWORKS” type organizations that are drastically hindering the WILL of the people. Republicans once could engage in civil discourse, now they lie and misrepresent themselves, and then flee when caught in those lies.

All I can say is Regan WAS a Republican President…2 Republican Presidents, 2 Republican controlled Houses, and, 1 Republican controlled Congress ago. Funny how you tend to “pluck” Regan’s accomplishments (as limited as they were) out while trying to change the factual history of misguided Republican endeavors since then. Trust me, there are less Republicans today than there were in Regan’s time and as the GOP continues to splinter, there will be even fewer. Pay attention to the townhalls that your pundits are trying to spin as Democraticly led mobs, uh-uh, nope, its the very people from your party who are waking up and realizing that the Republican’s are NOT for the “REAL” American citizens, but for the very demise of them and there way of life. THE AMERICAN DREAM.

Stay tuned, Kyle. If your party only has a “celebrity” (and where did we hear that before?) and a load of other vitrolic candidates who are all wildly UNPOPULAR, trying to run against President Obama, I think we’ll see either the complete fall of the Repbublican party, or you’ll be so fragmented that the GOP will cease to relevant. Either way, the WILL of the people will win out.

Jus sayin’.

Kyle Wingfield

April 29th, 2011
11:56 am

JF: http://en.wikipedia.org/wiki/Morning_in_America

Will Obama be able to run an ad which says anything close to that AND which voters believe? That’s the 270-electoral-vote question.

Not Havin it

April 29th, 2011
12:26 pm

All I have heard from Republicans is that the middle class needs to be taxed into oblivion in order for the very richest to continue to pay the lowest tax rate in history. The Republicans are intent on destroying the middle class in order to appease their corporate overlords. They have targeted teachers and public sector workers first and then will move on to the rest of us. Just wait. It is going to get really ugly. And it all starts with Paul Ryan’s corporate approved budget plan.

Jefferson

April 29th, 2011
12:31 pm

Pres Reagan was the 1st of the “big” spenders, he deserves some blame for his actions.

Linda

April 29th, 2011
1:58 pm

redneck@11:27, “…thost 91% tax rates were reduced to 84% & lasted until 1963…”
In 1963, Pres. Kennedey said in a speech to the Economics Club of NY, “…the paradoxical truth is that tax rates are too high & revenues are too low, & the soundest wasy to raise revenues is the long run is to lower taxes now.”

JF McNamara

April 29th, 2011
2:01 pm

The economy doesn’t need to improve. It already has. The unemployment rate for those with a college degree is under 4%. The number skews high because we don’t have a manufacturing base since its been outsourced. Those without jobs are lower income and will vote Democrat anyway. People think about themselves and their situation when voting. A high unemployment number means nothing if you personally have a job.

Kyle,

Yes, he can (and should) run morning in America type ads. Do you remember how bad things were? The monetary system collapsed!!! People thought they would never retire because their 401Ks collapsed. People were being laid off in mass. We had a complete housing collapse. We had two wars spiraling out of control and no plan to fix them. Considering, we are doing pretty well.

I’m not scared of losing my job, my entire 401K, or being blown up in a terrorist attack because of one of our wars or constant terror alerts under Bush. I’d say its morning in America.

carlosgvv

April 29th, 2011
2:26 pm

DW

In the interest of public service, go down to the State Unemployment Office, approach each jobless person and say “Good news. The overall market is up 100% since bottoming and unemployment is falling”. I just know you will be a big hit. Come to think of it, though, you might want to have your health and dental insurance paid up, just in case some diehard who has been out of work for 1 or 2 years doesn’t understand the wonderful message you are bringing.

Ayn Rant

April 29th, 2011
2:44 pm

No one, certainly not President Obama, claims that our economy has recovered from the recession that nearly brought us to another great depression. Middle and lower income Americans have certainly not recovered. The big corporations, especially financial institutions, have recovered. The super-rich have accumulated even more of the national wealth.

Those who have the money are not investing it in American business and commerce, because America is not a good investment. We have too much poverty and hopelessness among working people, and we face the threats of congressional Republicans to sabotage the economy by shutting down the federal government or refusing to raise the debt ceiling.

Kyle, your chart does show the effect of the Reagan tax cuts for the rich and the deficit spending to cover the federal budget shortfall. There was a spike of economic euphoria followed by a gradual economic decline toward recession. The Reagan-caused recession was inherited by the administration of the first President Bush. The irony is that President Bush coined the term “voodoo economics” to describe the Reagan policies, then inherited the sad results.

For a textbook example of economic recovery, just chart economic progress during the Clinton administration. Employment and wages rose, the stock and commodity markets boomed, and the federal budget rose from deep deficit to burgeoning surplus.

Following Clinton, we had another round of tax cuts for the rich, deep deficit spending, and financial euphoria that culminated in the economic bust of 2008 from which we have not recovered.

Prepare a chart of GDP and employment growth from the 1985 to present, and you will see that Republican financial policy (tax cuts for the rich, deficit spending to cover the shortfall, loose economic regulation) leads to recession 7-8 years later.

And, what did the stubborn Republicans and spineless Democrats in Congress do recently? Extended the Bush tax cuts that were the principal cause of the present, enduring recession!

“History repeats itself, the first time as tragedy, the second time as farce”.

JF McNamara

April 29th, 2011
2:50 pm

Ayn Rant,

“Those who have the money are not investing it in American business and commerce, because America is not a good investment. ”

This is an extremely misguided statement. America is selling more bonds to China than we’veever sold and the debt is cheap. Foreigners are buying our stocks at an unbelievable rate.

America is the brightest bastion of stability and resourcefulness in the world and ALL other countries and major investore in foreign countries buy our debt and stocks because of it. America is, by far, the best investment in the World.

DW

April 29th, 2011
3:02 pm

@Carlos

There are ALWAYS going to be some people out of work. Going down to the unemployment office is NOT a representive sample of the over-all country. Dont you agree?

Bart Abel

April 29th, 2011
3:02 pm

As others have mentioned, there a numerous factors that should necessarily affect what voters do in 2012, although those factors might not necessarily come into play.

I imagine that if all voters knew the details of the Republican budget that would privatize Medicare and force seniors to either pay thousands and thousands out of their own pockets for private insurance or go without health insurance at all, then the election would be a no-brainer.

Unfortunately, millions of corporate funded dollars are going into radio and television ads claiming that Republicans voted to save or strengthen the Medicare program that they actually voted to kill. In other words, millions are going into running ads that tell a lie. Yes, under the Republican plan, a new privatized program with the same name would be created, but naming this new beast Medicare too is part of the scam.

We’re going to have to rely on word of mouth the word out about what Republicans voted to do to Medicare. Because now that corporations are people, according to the Supreme Court, lies can be spread quickly, easily, and with impunity.

Kyle Wingfield

April 29th, 2011
3:04 pm

“There was a spike of economic euphoria followed by a gradual economic decline toward recession.”

Is that the technical explanation?

I’m sorry if that sounds snide, Ayn, but let’s be honest: Nothing in your comment comes close to explaining how “tax cuts for the rich, deficit spending to cover the shortfall, [and] loose economic regulation” causes a recession. You certainly haven’t explained how the Bush tax cuts — rather than, say, the lax monetary policy that helped to fuel the housing bubble — “were the principal cause” of the recession.

You’ve merely noted that these things happened and that, some number of years later, so did a recession. Never mind that, looking back over the past 100 years, an economic expansion lasting eight years is hardly something to sneeze at.

You’ve also, in your hagiography of the Clinton years, managed to ignore the recession that Clinton left for Bush.

The business cycle didn’t begin in 1980.

Ayn Rant

April 29th, 2011
4:03 pm

JF McNamara: Foreigners are sitting on trillions of dollars accumulated from the many years of our trade deficits. Typically, we’ve run more than $500 billion trade deficit every year the last 10 years.

The foreigners use some of their dollars among themselves to buy oil and other commodities, but still have mounds of unneeded dollars. China alone has a $3 trillion fund. The foreigners are desperate to protect their hoards against depreciation. They urge the US to put its financial house in order (by reducing the government and the trade deficits), and they prop up the dollar by parking their dollars in US bonds. But they tend to avoid long term investments in US property, industry, or commerce.

China’s dollar problems are especially acute: they cannot use the dollars for internal development because their economy is on the verge of overheating from investment. They dare not raise the dollar value of their currency, or encourage the US to reduce the value of the dollar, for fear of devaluing their dollar hoard. If they had faith in the US economic future, they could invest in America by buying up property and profitable companies. Boy, could they buy! A recent issue of a national business publication made a list of what they could get for $3 trillion. All the real estate in Manhattan, and the 10 biggest-earning US companies are just a start.

With all the whining about the federal deficit, we are overlooking a startling truth: our private sector economy is failing. The US private sector cannot provide the jobs needed to employ all Americans who are willing and able to work, and cannot produce the good and services that American and foreigners are willing to buy. The federal budget deficit supports the jobs that the private sector cannot provide, and the trade deficit gets us the foreign goods and services that we want but cannot produce.

carlosgvv

April 29th, 2011
4:24 pm

DW

When the unemployment figure is around 10% I most definitely DON’T agree.

Michael H. Smith

April 29th, 2011
4:24 pm

Reply to:

buck@gon

April 29th, 2011
10:55 am

Mess we inherited?

Do they mean the one that began under Bill Clinton in 1993 when the first sub-prime “lair loan” was made?

Those “who drove the car into the ditch?

Has there been any mention of those “who dug that ditch deeper”?

Is their plan to keep digging until that car falls out on the other side of the world, like somewhere in China perhaps? :)

PS. Good blog article Kyle.

Freedom Lover

April 29th, 2011
5:06 pm

Why are you using government statistics (lies) to support anything. There is no recovery. Printing money out of thin air and throwing it around to make people feel rich does not constitute a recovery. Yes, people spent that money as quickly as they could before prices rose and devalued the money, but the truth is hitting finally and it is hitting hard.

This is a Depression. During the first Depression there were plenty of upticks in the stats but ultimately failed government policies, excessive government spending, anti-business legislation (Obamacare, etc,) and the like continued the overall downward slide that lasted until WW2 ended, FDR and his policies were dead, and a whole lot fewer americans came home looking for jobs. We are just at the beginning. FDR kept using fear and hope as his tools to keep getting elected. The american people were in love with Fascism at the time (even though they would go on to fight against it in europe) so they embraced FDR’s policies. It seems as though americans still haven’t wised up to the economic realities that are facing them.but we can always hope.

Ron Paul 2012. End the Fed.

Freedom Lover

April 29th, 2011
5:07 pm

Of course I mean to present Obamacare as a current day anti-business piece of legislation. Things like all of the fascist government agencies of the FDR administration were probably the best examples of business destroying government policies of the time although the list of horrible things they did is very long.