Economy? Who cares about facts. The GOP is better, Sean Hannity said so. Nevermind that every single study and statistic on the issue shows exactly the opposite.
Forbes:
But President Obama is not on the path to that restoration. The latest report on real GDP growth estimates this year’s first quarter at a pitiful 0.1%. That is in the 6th year of Obama’s Presidency.
Don’t tell me the economy was in a recession when he came into office. That recession ended five years ago! Recoveries always involve above average growth, well over the 3.3% long term trendline, as the economy catches up to that world leading American growth pace. That is why the American historical record is the deeper the recession, the stronger the recovery, as the economy grows faster in the recovery to make up the lost ground from the long term trendline.
Obama’s supposed economic recovery during the last five years has never even gotten back to the 3.3% long term trendline. The high points were 2.5% in 2010 and 2.8% in 2012. The high point for Reagan’s recovery was nearly 7%, in 1984, the highest in 50 years.
As the Wall Street Journal reported this week, “average growth over the 19 quarters for this [Obama] recovery has been 2.2%, with total economic growth [over the 5 years of the recovery] of 11.1%. The average for all post-1960 recoveries is 4.1% with total growth of 21.1%. The average for the Reagan expansion was 4.9% and total growth of 25.6%.”
Indeed, during the 7 years of the Reagan recovery, from 1982 to 1989, the economy grew by almost one-third, the equivalent of adding the entire economy of West Germany, the third largest in the world at the time, to the U.S. economy. Reagan accomplished that while slaying the historic double digit inflation of the 1970s at the same time, which the Washington establishment had sneered was impossible.
In other words, Obama is busy restoring the deeply misguided intellectual leadership of the 1970s, which cut America’s economic growth rate in half. Larry Kudlow noted in his column this week that the subpar Obama “recovery” has cost the American economy so far $1.5 trillion, below where it would be with just an average recovery. That is a loss of nearly $13,000 per household.
With a recovery matching Reagan’s growth rates, U.S. GDP would be $2 trillion bigger today, Kudlow adds. That would be $17,000 more per U.S. household. At the growth rates of Kennedy’s recovery in the 1960s, resulting from economic policies similar to Reagan’s, U.S. GDP would be $3 trillion higher. That would be $25,600 more per household.
This is the fundamental transformation of America that Obama promised us, from the greatest, world leading, economic superpower in human history, to stagnating also ran. The above is what this transformation is costing every American family. In return for giving up economic growth, the American people are getting less, not more, economic equality under Obama and his Democrats.
This morning, Obama finally got a monthly jobs report worthy of a recovery, with the creation of 288,000 jobs last month. But in a recovery from a recession, the economy should be producing at least that many jobs, every month. In one month during Reagan’s recovery, September, 1983, the economy created over 1 million jobs. Remember, the last recession ended five years ago, and America should have enjoyed a recovery producing jobs like in this morning’s report every month since then, based on the historical economic record. Instead, Obama’s recovery is still the worst economic recovery from a recession since the Great Depression, as I have discussed in detail in prior columns.
Kudlow divides recent American history on a bipartisan basis, noting that President Clinton, with his Republican Congress, mostly maintained Reagan’s economic policies. Kudlow recounts, “From 1982 to 2000, real annual GDP growth averaged 3.8 percent, 44 million new jobs were created, and the stock market increased 900 percent.”
Contrast that with the George W. Bush/Barack Obama failure. Kudlow reports, “From 2000 to 2013, real annual GDP growth was 1.8 percent, 5.5 million new jobs were created, and stocks went up only 44 percent.”
Kudlow explains, “In the Reagan-Clinton prosperity cycle, the size and scope of government was substantially reduced. A pro-growth measure. There was major tax reform and reduction, free trade expansion, deregulation, large-scale federal-spending restraint, welfare reform, Social Security reform and monetary rules that vanquished inflation and delivered a strong King Dollar and a collapsing gold price. All pro-growth.
Reagan and Kennedy both cut income tax rates across the board for everyone, together reducing the top rate from 91% when Kennedy entered office, to 28% when Reagan left office, with bipartisan support for the economic programs of both Presidents. Obama, by sharp contrast, has raised the tax rates of virtually every major federal tax, while maintaining the highest marginal corporate income tax rates in the world, on a bitterly partisan basis
Reagan’s first major act in 1981 was to lead a cut in federal spending of nearly 5%, with a tight clamp on domestic discretionary spending for the rest of his 8 years in office, ultimately reducing federal spending as a percent of GDP by 10% from its peak. Obama’s first major act was to lead an increase of almost $1 trillion in spending in the so-called “stimulus” bill, followed by the 2010 adoption of a new mega entitlement in Obamacare that will add trillions to future federal spending.
Reagan continued the deregulation begun under President Carter, saving consumers hundreds of billions. Obama has been the most pro-government regulation President in history, with Obamacare control over health care, the Dodd-Frank regulatory tsunami over American finance (which has only just begun), and EPA running roughshod over the private economy, especially energy producers.
Reagan backed and provided political cover for the Volcker-Greenspan Fed, which followed monetary policy restraint that squelched the double digit inflation of the 1970s, and produced a rising, strong dollar. Obama cheerled the easy money, zero interest rate, Fed monetary policies that began under President Bush, which depreciated the currency, recreated rising gold prices, and established the foundation for the return of inflation.
Bottom line: Kennedy and Reagan adopted pro-growth economic policies across the board (mostly maintained under Clinton). Bush and Obama abandoned, and then ultimately reversed those bipartisan, pro-growth policies.
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