Obama to repeat Reagan’s rebound? Not so fast

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.

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

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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.

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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.

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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.

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@Carlos

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

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@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?

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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.

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@jd

thats as retarded as blaming obama for gas prices

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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?

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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.

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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.

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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.

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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

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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’.

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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.

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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.”

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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.

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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.

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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.

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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.

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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.

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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.

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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?

DW, people back to work is how you measure the economy. The Market only plays a small role in the economy, I can assure you that the unemployed don’t give a good sh*t about the DOW.

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Several factors work in Obama’s favor for reelection
1. He is getting us out of the mess Bush created in Iraq as promised;
2. He did not follow the Neocons and other Republicans and get us in another hot war in Libya;
3. He was forced to keep the Bush tax cuts by the Republicans which everyone knows is not sustainable with huge deficits;
4. His stimulus program though badly flawed by Ms. Pelosi and others did keep the states from going broke;
5. The Republicans keep generating bufoons and dimwits who really are not capapble of leadership ie. Trump, Gingrich, Bachman, Palin, Boehner, etc.
6. We have stability in foreign affairs, financial markets, and terrorism which we did not have under Bush,
7. The economy is improving.
8. If he comes up with a plan to reduce defense spending (100s of overseas bases in countries that do not need our defense) and reduce entitlements along with mandatory taxes for all coporations including GE he will have tackled our number one problem-the deficit. No Republican plan does all of these.

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Are you better off todaythan you were in Jan 2009? Is the country better off today, than in Jan 2009?

Didn’t think so!

Nerobama loses in Nov 2012.

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NO NEVER HAPPEN!!!!!!!!!.,…I know Ronald Reagan,.and You mister Obama Bin Lying are NO Ronald Reagan!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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Wait…91 percent on income over 200,000 dollar tax. Lets do some math here. You earn 200,000 dollars and your take home pay is what? less than 20,000? Seems to me that would contribute to the recession by bringing a source of sales tax revenue down to almost none, reducing the spending ability of a group that spends lots.

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David,
your economic analysis is completely wrong. Companies are sitting flush with cash, scared of tax changes and the attitude from Washington. These anomalies are emotional, not analytical. A problem like that is 100% presidential. Someone who communicates optimism, freedom and and security is needed to pull out of a recession. A “fainess” guy is just fine for when things are already prosperous.

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President Obama will win reelection in 2012. The winner of the election is always the guy the voters like best. This is why you never see the comparison of Like/Dislike numbers between Obama and announced/potential Republican nominees. People like Obama even though they disapprove of the economy.

Republicans at the state and federal level are doing all they can to hold back the recovery and job creation programs. They also are doing nothing to protect those with jobs, as teachers, cops, firefighters, all essential, are losing their jobs in order to pay for more tax cuts for the wealthy and well-connected.

Counting on the economy fail, rather than on their own policies to solve problems will also doom Republicans. You cannot beat something with nothing.

Along with their votes to turn Medicare into welfare-voucher system,if the Republicans hold hostage the debt ceiling, which the public knows they share part of the blame, then it is over for them and the Democrats will retake the Congress with heavy casualty in the statehouses as well. If Obama is seen to have won these battles, then he wins, and wins big.

In fact,people in various states are recoiling, and recalling, Republicans because of policies that are an assault on the Middle Class, the poor, seniors, the disabled, etc…

This isn’t the 80’s, it isn’t the mid 90’s where the dotcom tech bubble held off the crash. It isn’t even the early 2000’s when the housing bubble artificially propped-up the economy, until it didn’t. Nope, tax cuts and budget cuts to social and critical programs aren’t going to spur the economic growth that is going to be needed to repair the labor market. That is going to require spending, a.k.a “investment”.

President Obama’s reelection is not inevitable. There is always a chance that someone, either from his own party or the Republicans, that the public likes and who comes forth with a job creation strategy, that will immediately creates jobs, and is either paid for now, or over time, can beat Obama.

Lastly, not only will Obama win reelection, he will win Georgia. Did y’all see the polls that show his approval rating in this state is higher than the vote total he received in 08? Have y’all noticed the same phenomenon in several other southern/southwestern states as well? While he has some work to do in about 5-6 states he won in 2008, 2012 is lining up to be a massive victory, but for different reasons than what helped Reagan in 84.

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Obama is the worst president ever..he is no and never will be a Reagan. Reagan duidn’t take muiltiple vacations and took his job seriously. the job market sucks and will never get better.

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Hate to rain on all of you Conservative parade, but President Obama will be elected to a second term!!!!!!!!!!! Hip Hip Hooray!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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