The brand-new nickname for Barack ObamAA+ symbolizes America’s total net jobs created in August: Zippo.
So, how many jobs emerged in August 1983, the analogous point in Ronald Reagan’s presidency? 278,000. Proportional to today’s population, that equals 365,000 new hires last month.
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Citizens pondering Obama’s latest jobs speech and how to get America working again should focus on today’s great Keynesian experiment. Ronald Reagan’s supply-side mixture of tax cuts, deregulation, and sound money competes directly against Obama’s big-government blend of Keynesian stimuli, rampant red tape, and promiscuous printing of money — as if dollars were wallpaper. The late Reagan trounces the leisurely Obama.
President Ronald Reagan signing the Economic Recovery Tax Act on August 14, 1981 at his southern California ranch. On economic dynamism, he still has the last laugh. Photo: Associated Press.
Reagan’s Economic Recovery Tax Act of 1981 slashed the top federal income-tax from 70 percent to 50, and sliced business levies. Today, it would cost $1.86 trillion. (For consistency, I converted all of the historical numbers in this article for 1981, 1983, and 2009 into 2011 dollars. Nominal figures appear in an analysis available here.) Meanwhile, Obama’s “stimulus,” formally called the American Recovery and Reinvestment Act of 2009, cost $829 billion.
Reagan deregulated America’s economy, as demonstrated by the relatively low 30,522 pages of rules added to the Federal Register in 1981 and 1982. Reagan continued President Carter’s loosening of restrictions on airlines, trucking, and other industries. The 45,696 pages that swelled the Register in 2009 and 2010 reflect Obamacare, Dodd-Frank, EPA guidelines, pro-union favors, and other regulations — atop Sarbanes-Oxley, farm programs, lighting standards, and other hurdles that Bush-Rove erected.
Confirming Reagan’s commitment to reliable currency and monetary restraint, gold’s price fell 33 percent — from $1,396.79 per ounce during Reagan’s Jan. 20, 1981, inauguration to $937.37 on Sept. 7, 1983. By converting the Bureau of Engraving and Printing into a veritable currency copy shop, Obama helped gold climb 201.4 percent through Wednesday, from $898.53 to $1,810.00.
Reagan accelerated Carter’s deregulation of oil prices and encouraged domestic production, as underscored by gasoline’s 6.75 percent fall from $3.11 per gallon on inauguration day to $2.90 in late August 1983. Obama’s domestic drilling limits and anti-carbon fetish helped gasoline climb 87 percent — from $1.93 when he arrived to $3.60 on August 29.
The economic and political consequences of these conflicting visions are stunning.
President Zero: In Barack Obama’s third August in office, the stimulus-fatigued U.S. economy created no jobs. In August 1983, thanks to Ronald Reagan’s pro-market reforms, America generated 278,000 new positions.
At the two-and-a half-year mark (Jul. 20, 1983), Gross Domestic Product under Reagan grew at 9.3 percent. Under Obama, GDP crawled forward last July 20 at 1 percent.
At that stage in Reagan’s presidency, non-farm productivity blossomed at 9.6 percent. Under Obama, it shriveled at negative 0.7 percent.
After Reagan’s first 30 months, unemployment stood at 9.4 percent, down from a 10.8 percent recessionary peak. Under Obama, top joblessness of 10.1 percent has dropped to 9.1 percent, but seems stuck there. And the fact that America yielded zero net jobs last month (versus 278,000 in August 1983) confirms the bankruptcy of Obamanomics.
These respective developments swayed America’s mood. In August 1983, under Reagan, the Consumer Confidence Index sparkledat 90.2. Last month, under Obama, it flickered at 44.5.
In a June 1983 CBS News poll, 47 percent of adults said America was “on the right track,” while 44 percent saw the nation “on the wrong track.” In a June 2011 CBS News study, 28 percent of Americans chose “the right track,” and 63 percent voted “wrong.”
Similarly, an Aug. 8, 1983 Gallup survey found 35 percent of Americans “generally satisfied with things in the U.S.” and 59 percent “generally dissatisfied.” On Aug. 14, 2011, 11 percent were satisfied, while a whopping 88 percent were dissatisfied.
Progress earned Reagan 48 percent approval in a September 1983 Gallup survey, while Obama stood at 40 percent last August 20. On managing the economy, ABC News documented Reagan’s 48 percent approval on May 18, 1983. On September 1, ABC gauged Obama’s approval on economics at 36 percent.
Obama’s triumphs include last week’s dismissal of 1,100 workers at Solyndra, a now-defunct solar-panel manufacturer that he stimulated with a $535 million loan guarantee. (Search-warrant wielding FBI agents raided Solyndra’s Fremont, Calif., headquarters late last week, seeking evidence of criminality.) Another “green-jobs investment” hatched 14 posts and weatherized exactly three Seattle homes. Cost: $20 million.
Ronald Reagan savored a landslide re-election in 1984, scoring 525 Electoral College votes to Democrat Walter Mondale’s 13. As Barack Obama crawls from the wreckage of his Keynesian vehicle, disappointed voters in November 2012 just might make him hand the keys to an adult who knows how to drive.
— New York commentator Deroy Murdock is a nationally syndicated columnist with the Scripps Howard News Service and a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University. Manhattan financier Brett A. Shisler contributed analysis for this piece.
Thank you for the informative article, Mr Murdock. The title, however, did elicit a cringe--to put those two names together, even with a "vs." qualifier, is simply immoral and repugnant.
Good catches on the sins of the Bushies and modest virtue of Carter. Too often the bi-partisan nature of our calamities is overlooked. One simpler way of describing the economic divide is a term I have been trying to work into the language; Demand-side Economics. When you know the fountain of "demand" is printed money Keynes can safely be left in his grave.
President "Zero", as you call him, and the lib-progressive, Keynesian, redistribute the "wealthers" have a grand excuse for the "zero" job numbers...it's the proliferation of ATMs and so on and so forth don't ya know...
If it was not so all-too-human and all-too-sad it would be funny...GOOD GRIEF!!!
Reagan's tax increases were only a small fraction of his tax cuts.
They also occurred after his second tax cut that lowered the top rate to 25%. He gave up a small percentage of the second cut, for an agreement to cut spending drastically.
Racist!!!! How dare you be so direct and accurate in criticizing Obama and highlighting his weaknesses instead of just bucking up and supporting YOUR President. You must be a white Tea Par.....whoops, sorry.
This article is so absolutely stunning in its attempt to pander to Reagan worshiping and pathetic in using misleading facts to compare two situations.
The continual clinging of Republicans, most of whom are not economists, to supply-side or trickle-down is insane. Maybe you have not realized, Mr. Murdock, that tax rates in United States are at its lowest since World War 2. Tax cuts by President George Bush are followed by the current deficit disaster and economic crisis. There have been no empirical studies of any supply-side policies actually working to stimulate the economy. On the other hand, countries such as China inject massive stimulus into their economies following the financial crisis in 2008, ensuring a stable and sound recovery.
You might ask then, why did the United States federal stimulus not compare? One, federal stimulus was not as high the degree as economists have suggested. Second, the stimulus is offset by many state government's spending cuts. Indeed at the end, the increased federal spending and the decreased state spending evened out, resulting in no net increase in GDP through government spending. This is another reason as to why balanced budget amendment would be stupid. The reason why state spending went down dramatically is due to many balanced budget amendments they have.
The rise of gold prices have little to do with the "printing money" at Federal Reserves. Rather, it has to do with the debt crisis that Republicans held the country to hostage for, as well as the Euro crisis in Greece, Ireland, Spain and Italy. One can match a dramatic drop in prices after a last minute deal was reached to avert "default".
Similarly, gas prices rise had little to do with the limit of drilling. Rise in gasoline prices following Obama's inauguration marked the corresponding optimism in United States economy and correspondingly the increase demand for gasoline. Gasoline prices are also not helped by man-made disasters such as BP spill as well as the instability in Middle East. The low prices of gasoline in Obama's start of term reflects the recession the country is in and the lowered demand of gasoline throughout the world due to the financial crisis.
Good job cherrypicking the highest quarter GDP growth that Reagan ever had. If the GDP of the economy had been contracting by 5%, 5%, 2%, 1% in the year or two before, I would expect the recovery to be pretty large. Note that the high trend of GDP recovery dies in a year.
I've never recognize why the GOP is so fervently against the environment. Is the wish to surpass China in environmental pollution in order to protect industries so strong for GOP? Is trying to get renewable energy in a quest to have permanent source of power and lower their prices such a terrible national idea to have? After all, the money spent on green industries and EPA pales in comparison to what Homeland Security and Defense spends in Afghanistan and Iraq.
In the meantime to appease you all, hail Saint Reagan?
hey Unbelievable - in which decade do you reside? Seems like you think of geopolitical economics in terms of a bi-polar planet, where a lack of both technology and freedom limited the scope and scale of commodity and labor markets we compete with today. There are more favorable tax environments in most of the other capital markets as a result of the 'Peace Dividend' promulgated by the US. What a gift we gave to the rest of the world... quite often to our detriment where Main St. is concerned.
Secondly- at one point you cheer the Chinese for injecting stimulus into their economy to ensure stability- not hard to do when you can command economic policy at gunpoint, if need be- and then you pan them for the environmental pollution made possible by the swiftness of their response to economic crisis. So is it good or is it bad? Class? Bueller?
Thanks for making it easy to see the difference between an argument and a rant.
Oh you are a funny one. Let us be clear. The United States economy enjoys, to a certain extent over most other economies, higher technological advances and clear social law and definitions. For United States to give that advantage up and say, focus on going back to manufacturing basic goods, is ridiculous.
I am not sure what "favorable" tax environment you are talking about. Most countries have a higher personal tax rates than the United States. Granted, in terms of corporate tax US ranks among the highest, yet you see plenty of companies not paying a single dime but instead, reaping subsidies from the American government. Of course you can try to follow the Russian model, and I am sure the rich in America would love the continual increase in income disparity, the large government corruption and all the great social things in Russia such as ability to buy special sirens to get around traffic.
What you pointed out are two completely separate things that I mentioned. Try not to mix them up, though it is a common logical fallacy. You are probably not familiar with the Chinese economy if you still think the CCP "holds the economy at gunpoint". Chinese economy is much closer to a capitalistic economy than a command economy at this point.
China's environmental problems certainly have to do with their reliance on manufacturing, but they have nothing to do with the stimulus. I never said that, and don't put words in my mouth. The problem comes from a lack of oversight from any regulatory agencies, and the propensity of local officials to take bribes from companies. (Follow: Campaign Donation = Cries of "NO REGULATIONS!!! DESTROY EPA!!!")
Hey buddy, be careful not to trample the pretty lil' talking points as you try to back out of your China conundrum there.
Manufacturing + poverty wage scale + ravenous consumer markets in the West - environmental impact mitigation requirements = cash, and lots of it.
Cash = stimulus. But the right hand knows not what the left hand does. Really, now...
And are you trying to say that China has no 'safety word' if economic conditions get a little too rough? Their capitalistic system, made up of Chinese citizens, will always be beholden to the totalitarian monolithic CCP, as long as it can command its provincial divisions to fix bayonets and put down any organized opposition, by other Chinese citizens, to Party fiat- not to exclude environmental damage protests by 'thugs and hooligans' (there, I even threw in the safety word for you). China will surge forward because, simply, it can- with none of the niceties of what we in the West consider due process to hold it back.
So are you disingenuous, inattentive, or just plain blind?
Oh- and you get a free pass on your US corporate tax evasion demagoguery without listing examples, as I expect the scorpion to sting as is its wont. You're welcome.
Here, since you seemed to fail to understand basic English, let me lay it out for you:
1. China's large stimulus package in inflating demand allowed China's growth to rapidly climb back from the effects of financial crisis.
2. China's environmental records are a complete shamble due to its reliance on manufacturing, lack of environmental oversight, and government corruption.
Points 1 and 2 are unrelated, in case you have not figured it out by now. There is no "conundrum" here. All and all, what you are ranting just shows your sad lack of knowledge about China and its economy. What is even sadder is you attempting to use what little you know about it to argue here.
What safety word are you talking about? Protests? That has nothing to do with the economic system in China. No one has argued that China is not a one-party system. What is being said here is that China has an economic system that has been moving rapidly towards the capitalism spectrum over the past 20 years. To call China's economy a command one shows a laughable lack of knowledge about the country.
Of course, China's one party system also allows it to do what is necessary for the economic well-being of the country, such as massive stimulus... etc without being blocked by intransigent nay-sayers who put blocking any Obama's initiatives in front of the country's interests.
"Tax Cuts! Tax Cuts! Tax Cuts!"? You can try to herald Reagan's cries in cutting taxes to increase revenue, but Laffer's curve does not apply anymore. US tax rates are at the lowest since World War 2. We are on the left of the curve now.
In terms of US corporate taxes, please tell me you are not that clueless. GE, BOA, Exxon... etc all have been documented in the past year to receive billions of subsidies and pay no taxes. GOA study from 1998 to 2005 showed that more than 50% of companies paid no corporate taxes for one year at least. Heard about those "tax holidays" that Congress has been considering? US companies have been stashing cash overseas in the hope that they can bring it back to the US during one of these tax holidays to not having to pay their shares.
