Presidents, Precedents

News flash: This is not 1982, and Obama is not Reagan.

The important difference is this: There was a good reason for the Volcker-Reagan recession: defeating inflation. American voters may not be terribly economically sophisticated, but they sure as heck did notice when inflation went from 13.5 percent to 3.2 percent — in two years. Presidents’ effects on the economy are overstated (economies are complicated and many of the most important factors are exogenous to public policy), but tackling inflation was a matter of politics and policy. The recession was hard, but we came through with something to show for it. For instance, mortgage rates that were 7 percent instead of 19 percent.

What, precisely, will we have to show for having come through the Obama recession(s)? A gigantic new federal entitlement program? Staggering amounts of debt? Persistently high levels of unemployment? That’s the best-case scenario. The worst case scenario includes pre-Reagan levels of inflation, a debased dollar, and a deep double dip in Recession Round 2. Obama’s first-class temperament is not going to do him a lot of good with a third-class economy.


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