According to The National Bureau of Economic Research, the Great Recession began in December 2007, lasted 18 months, and ended in June 2009. The last recession that lasted this long began in July 1981, lasted 16 months, and ended in November 1982.
No two recessions are the same. And no two recoveries are going to be exactly the same either … especially when the presidents that preside over them have diametrically opposed philosophies about what government can or should do. But as Ronald Reagan once said: “Shouldn’t we expect government to read the score to us once in a while?”
As the chart to the right shows, the stark reality is that the economic recovery under President Barack Obama has been much weaker than the recovery under President Ronald Reagan. At this stage of the Reagan recovery, unemployment had fallen more than three full points, from 10.8% to 7.7%. By contrast, under the Obama recovery unemployment has actually risen almost a half a percent from 9.4% to 9.8%.
So why was the Reagan Recovery so strong and why is the Obama Recovery so weak?
- President Reagan cut marginal tax rates. President Obama is still flirting with 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.”
As the still-unemployment rates shows, even with a recovering economy, President Obama’s wealth-distribution efforts are not good for anybody.