If there are two things that Republicans want us to believe, it would be these:
1. Barack Obama’s economic policies are a failure which made the recession worse.
2. Ronald Reagan was an economic genius who should serve as an example of how to improve the economy.
The best way to examine both of these statements is to compare how these 2 presidents handled the economy during their first 3 years as president.
It’s fair to say that when any new president takes office, it takes a few months for their economic policies to have an effect on the economy. So you have to look at the condition of the economy when they took office and how it responded after the new president’s policies have had time to take effect.
The graph accompanying this article uses unemployment numbers from the Bureau of Labor Statistics to compare the monthly unemployment rates for the first 3 years under Presidents Reagan and Obama.
Both Reagan and Obama took office when unemployment was considered fairly high. In February, 1981, Reagan’s first full month as president, unemployment was at 7.4% and was slowly improving. It dropped down to 7.2% by April, his third month in office.
In February, 2009, Obama’s first full month in office, unemployment was at 8.2% and rising rapidly. The economy was already losing 750,000 jobs per month before Obama was sworn in.
Look closely at what happened during each president’s first 2 years in office. By October, 2009, Obama’s 9th month in office, unemployment peaked at 10.1%. After that, we started to see job growth and the unemployment rate declined over the next 2 years. The longer his policies were in effect, the more the economy improved.
Compare that to what happened during Reagan’s first two years. Although unemployment was stable when he first took office, after about 7 months, it started rising. After his first full year, unemployment climbed to 8.5% and it continued to rise throughout his 2nd year. Nearly two full years after Reagan took office, unemployment was at 10.8%, higher than it ever reached under Obama. It wasn’t until nearly 2 ½ years into Reagan’s presidency that unemployment finally dropped below 10%.
There is a stark contrast between what happened with Reagan and what happened with Obama. Under Obama, unemployment briefly topped 10% during his first year and then began to go down. Under Reagan, unemployment remained above 10% for the better part of a year.
Most of the job losses that occurred during Obama’s presidency happened during the first few months as a result of the deep recession that began a year before he took office. Less than a year into his term, the economy showed steady improvement. By contrast, the job losses under Reagan didn’t begin until about six months after he became president and continued to get worse for the next 18 months.
The severity of the economic crisis that Obama inherited cannot be over-emphasized. Not since the Great Depression had we seen such massive job losses as were occurring at the time Obama was sworn in. It would be difficult to find any other time in our country’s history when 750,000 jobs were lost in a single month. Economists predicted that we would have 20% unemployment within a year. It is remarkable that unemployment peaked at only 10.1% and that the economy began improving as quickly as it did.
Obama clearly inherited a far worse economic situation than Reagan did. Yet he managed to turn around the economy in less than half the time it took Reagan. Obama’s policies resulted in a measurable improvement within a year of taking office, while Reagan’s policies resulted in a worsening of the unemployment situation for two years.
In reviewing Obama’s accomplishment, there are other factors that need to be considered in this comparison. When Reagan was president, Democrats in the House of Representatives who opposed him were willing to make compromises and to work with him in creating jobs. They didn’t see their role as simply to obstruct everything he did.
The Republicans who oppose President Obama have tried to prevent anything from getting done at all with regard to the economy. During the first 2 years, Republicans in the Senate filibustered virtually everything they could; including bills they previously supported, in order to prevent any legislation from coming up for a vote. After gaining control of the House of Representatives, Republicans refused to pass any job creation bills at all, even rejecting proposals that they had supported in previous years.
Despite Republican attempts to stifle job creation, President Obama has managed to have far greater success at pulling the country out of a recession than the sainted Ronald Reagan did during his first 3 years in office.