President Obama took to the national stage today and again repeated his claims that administration policies are producing a robust economic recovery. However, public opinion polls and recent election results underscore a very different perception: working Americans see an economy still deeply depressed in key sectors and much slower everywhere than it should be. In short, according to the perception at least, the president’s policies have not turned the economy around as fast they expect.
So who are you going to believe, the President or your lying eyes? Where are we today compared to the other, big recession of the post World War II period, the early 1980s? One way to answer that important question is to compare the two recessions calendar quarter by calendar quarter. At its worst point, or seven quarters after the start of the recession in 1981, the economy was just as weak as the worst days of the recent recession.
Today, we are 17 quarters from the beginning of the last recession that started in December 2007. At this point in the 1980s, the economy was well on its way to normal levels: output stormed back to near normal levels: GDP growth without inflation averaged 4.9 percent during the recovery period. The unemployment rate was in the low 6 percent range by the 17th quarter and would get to 5.6 percent by the end of that year, 1987.
By contrast, our economy today, 17 quarters after the start the recent recession, remains dramatically weaker than it should be: real GDP growth over the current “recovery” has averaged only 2.5 percent and the unemployment rate stands at very high 8.2 percent, well above the normal, full-employment rate of 5.5 percent. Millions of people lack work and, more importantly, little prospect of finding employment.
These numbers starkly indict the president’s economic recovery program. Unprecedented deficit spending has done little else than create ballooning federal debt that itself now slows the economy. Rather than lighten regulations and lower taxes as President Reagan did in the 1980s, this president has launched 3,611 new regulations. 106 of them are major regulations, those with an annual impact of $100 million or more, which discourages entrepreneurship, investment and innovation. And, in the midst of all these failing grades in economic stewardship, the president urges voters to support his plans for more regulation, higher gas prices, and higher taxes.
Obviously, we should do just the opposite…and quickly. Even suggesting that taxes will rise and regulations will grow harms our economic prospects, and more debt further burdens our prospects for recovery. Truth is, working Americans have figured this out. The big economic question of the day is, will President Obama?