According to The National Bureau of Economic Research, the most recent recession began in December 2007, lasted 18 months, and ended in June 2009. The recession which most closely resembles the most recent one began in July 1981, lasted 16 months, and ended in November 1982. No two recessions are exactly the same. No two recoveries are exactly the same. But as two-time Super Bowl champion coach Bill Parcells still liked to say: “You are what your record says you are.” Heritage Foundation Senior Fellow J.D. Foster read us the score:
At this stage of the Reagan recovery from the last deep recession in the early 1980s, the economy had created almost 4 million jobs, or 6 million jobs when adjusting for the size of the labor force. In contrast, under Obama the economy has lost nearly a half million jobs since the recovery began; the growth rate remains stuck around 1 percent; and the economy is sufficiently weak that the Federal Reserve is about to embark on yet another round of quantitative easing to fend off deflation.
As the chart to the right shows, 16 months into the Reagan Recovery the nation’s unemployment had already fallen a full three points. By contrast, 16 months into the Obama Recovery and the nation’s unemployment rate is actually .1 points higher. Why was the Reagan Recovery so strong and why is the Obama Recovery so weak?
- President Reagan cut marginal tax rates. President Obama is about to allow the largest tax hike in American history.
- President Reagan reined-in government union power by firing striking air traffic controllers. President Obama bailed-out state government unions, hired more federal government union members, and even bought a car company for the very same union that ran it into the ground in the first place.
- President Reagan simplified and reduced telecommunications and anti-trust regulations. President Obama expanded and complicated regulations in the health and financial sectors.
- President Reagan returned power to the states by reducing the percentage of state expenditures that come from the federal government. President Obama, through both the failed $862 billion stimulus and the trillion dollar health care plan, has made the states more dependent on Washington than ever.
These policies reflect the different governing philosophies of these two presidents. In his First Inaugural Address, President Reagan said: “In this present crisis, government is not the solution to our problem; government is the problem. … In the days ahead, I will propose removing the roadblocks that have slowed our economy and reduced productivity.”
President Obama, however, sees a much larger role for the federal government. As he said on the campaign trail in 2008: “I think when you spread the wealth around, it’s good for everybody.”
So far that hasn’t been the case.