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Since Barack Obama took the oath of office, inside-the-Beltway Democrats have spent the first Friday of every month trying to answer one simple question, “Where are the jobs?” It’s becoming increasingly difficult to defend what is arguably one of the worst presidential economic records in modern history and put a positive spin on the president’s reelection prospects.
Democrats’ optimistic view of President Obama’s reelection chances seems to be based on the false notion that the president’s current dire political situation is analogous to President Reagan’s at this point in his presidency. As they try to conjure up a second round of hope, this time for 2012, their mantra has become, “Not to worry. Reagan’s unemployment numbers were this bad or worse in his first two years in office and he was reelected.”
They like to point to the fact that on election day, 1984, unemployment was at 7.2 percent; if President Obama can start to bend the unemployment figures down toward 8 percent, they figure, he stands to win a second term.
But this logic is based more on wishful thinking than economic or political reality. What they know is that Reagan, like Obama, inherited a terrible economy suffering from stagnation and high unemployment.
But that’s where the comparison ends, because Obama’s response — to embrace a Keynesian economic policy — bears no resemblance to the supply-side approach of Ronald Reagan. In fact, the two policies are mirror opposites, and so are the results.
Comparing the two presidencies at identical moments in their first terms is a contrast in style and substance. In September 2011, President Obama has just announced yet another plan for job growth before a joint session of Congress. Last month, his economic plan managed to create zero jobs. At this same moment in 1983, Ronald Reagan’s policies were about to create 1.1 million jobs in the month of September alone, the biggest one-month job gain since the Bureau of Labor Statistics officially began keeping track back in February 1939.
So much for comparisons. Obama’s failed unemployment record is stark. In fact, by a wide margin, the unemployment rate has been higher under this president than his 11 predecessors. People seem to have forgotten that while there were admittedly large job losses in 2008, in January 2009, the month Obama took office, unemployment was 7.8 percent.
Since then, unemployment has never been under 8 percent, despite Obama’s promise that passage of the 2009 trillion-dollar stimulus bill would ensure unemployment stayed below that level. Instead, in 26 of the last 28 months, unemployment has actually been 9 percent or higher.
Reagan is the only other president to come close to Obama’s record, with 19 months of 9 percent or higher unemployment during his eight years in office. Gerald Ford was third in the record books with just one month of 9 percent unemployment. Since 1948, the country’s monthly unemployment average has been 5.8 percent, with six presidents doing a better than average on job creation and six doing worse.
Three Democrats — Johnson, Truman and Clinton — beat the average along with three Republicans — Eisenhower, Nixon and (surprisingly, to some in the world of political punditry and certainly to Democrats) George W. Bush. While the records of most of these former presidents are within a reasonable range of one another, President Obama’s 9.4 percent average puts him in a league by himself. What reelected Ronald Reagan was the strength of his economic policies – lower taxes and less regulation. They worked. They produced growth, the key to real recovery and significant job gains. That is the glaring difference between these two presidents.
After two-and-a-half years of Reaganomics, by this time in 1983, second-quarter growth had hit an astounding 9.3 percent and would be followed by three more quarters of 8 percent or higher growth. In contrast, Obama’s second-quarter growth this year was an anemic 1.0 percent, with no light at the end of the tunnel.
The CBO recently revised its 2011 growth rate downward to a weak 1.5 percent for the year, while the president’s own economic advisors had forecast a 2.8 percent rate. Whichever ends up closer to reality, either projection falls far short of Reagan’s extraordinary growth rate for the same third year of his presidency.
The lesson Democrats ought to take from this dismal comparison is simple: Keynesian policies simply can’t produce the growth that supply-side economics can. Yet this president and his supporters cling to the notion, as evidenced by his latest jobs bill, that higher taxes and more spending is the way out of the economic wilderness and toward victory in 2012.
Ronald Reagan earned a second term because he answered the question, “Where are the jobs?” by producing an extraordinary record of growth that voters understood would lead to jobs and did. When it comes to the economic records of Reagan and Obama, there is no comparison.