Best Out Of Three Rounds: Obama vs. Reagan On The Economy

By Mark Esposito, Weekend Blogger

Film Promises to Take a Controversial New Look at Government SpendingIn the red corner, wearing angelic white trunks trimmed in gold that darling of the Right, that Gipper of trickle-down economics, the Great Communicator himself, Ron–ald “The California Killer” Rea–gan.

And in the blue corner with black trunks trimmed in red, the “change” President, the foil of all things conservative, the first of firsts in American History, Bar–ack “Betcha Can’t Believe Where I’m From” O–Bam–a.

And today’s contest is a three-round fight for  the World Super Heavyweight Economics Guru Belt.  The format is a 10 point “must” system and you are the judges.  I, your humble ring announcer, get a scorecard but it’s only advisory.

But first some background, both fighters weigh in after tangling with some decidedly tough contenders before this big bout. Reagan came into office with a much more serious recession than most on the Left give him credit for. In addition, he followed hot on the heels of what his predecessor called the great American “malaise.” Plus he had an adversarial relationship with the nation’s biggest rival, the Soviet Union.

Obama came into office with a war on two fronts in Iraq and Afghanistan, a massive recession, and a world-wide financial industry on the brink of  collapse. Pretty tough contenders. Plus, he had and has a Congressional opposition party whose expressed goal was to make sure nothing he proposed made it into law. And law, as you know, is the political boxer’s stock-in-trade.

Ding— ding — ding.

Round 1: Jobs

Barack jabs with the fact that unemployment in the US in August stood  at 6.1% that’s a full year faster than it took Reagan to reach the same level. And it’s now down to 5.9% a figure Reagan never achieved.  Obama also uppercuts with the fact that the economy he presides over has created, on average, 200,000 new jobs every month for the past six.  That puts Obama at a projected 2.5 million jobs created for  FY 2014.  Reagan counters that in first year in office, unemployment stood at around 10.5% or about a half to three-quarters of a point higher than Obama’s highest figure. Obama counters that initial  claims for unemployment  are at the lowest point since 2000. 2000!

Reagan dances. “But overall, jobs created while I was in office for the entire term totalled a net figure of  16.1 million. That’s about three times yours, so far, Barack.”

Here’s a graphic depiction of the two fighters comparing the unemployment rate during their first 67 months in office:

Unemployment Reagan v Obama

Announcer’s Scorecard: Reagan 10 – Obama  9

Round 2: Investor ROI

Reagan comes out strong in Round 2, hooking with the undeniable stat that a dollar invested in the Standard & Poors 500 Index of stocks in year one of his Presidency would have yielded a staggering 190% return on investment after 5.5 years — a record in American history. Reagan bores in saying he did it with tax cuts and government spending in defense and manufacturing sectors. Obama covers up, but is it rope-a-dope?  Out of the corner, Obama right crosses that a dollar invested in that same S&P 500 Index during year 1 of his Presidency would yield a return of 220% in the same time frame and that the Dow stands at its highest level ever. And that translates into real dollars for non-passive investors (i.e., working everyday Americans) as 2/3 of Americans are invested in the market through their pensions or 401K plans.

Here’s the chart of ROI:

Investment Returns Reagan v Obama

Your announcer scores it:  Obama 10-Reagan 9

Round 3:  Government Spending

Staggered but not out of it, Reagan thinks this round is his. He is after-all the supply side economics guy who cut government spending to boost an ailing economy and made all Republican economists sing with delight every time a tax is eliminated. Sort of like that tinkling bell in a Wonderful Life when an angel got it’s wings. Reagan hits hard with the fact that in “the first year of the Obama presidency … the federal budget increased a whopping 17.9%—going from $2.98 trillion to $3.52 trillion.”  And the ringside Reagan chanters keep up the mantra from ringside that it was due to the stimulus package.

Except … that every President’s first year budget is proposed and passed, not by his administration but by his predecessor in office and the Congress from the year before. In Obama’s case, George W. Bush passed the Obama’s first year budget and it is his deficit and spending priorities in that document. Thus, Obama’s 2009 budget belongs squarely to President George W. Bush and the 2008 Congress.  “Well,” the Gipper says from his coverup crouch, “Obama must have continued the rate of spending to astronomical levels.”

Not exactly.  Here is a bar Graph showing the rate of federal government spending under the past 5 US Presidents:

And add these punches to your ring scorecard:

Courtesy of Marketwatch

  • In fiscal 2010 (the first Obama budget) spending fell 1.8% to $3.46 trillion.
  •  In fiscal 2011, spending rose 4.3% to $3.60 trillion.
  • In fiscal 2012, spending is set to rise 0.7% to $3.63 trillion, according to the Congressional Budget Office’s estimate of the budget that was agreed to last August.
  • Finally in fiscal 2013 — the final budget of Obama’s term — spending is scheduled to fall 1.3% to $3.58 trillion.

Your Announcer scores it Obama 10 – Reagan 8

And The Winner is:

Ok, now it’s up to you. Who is the best President you’ve seen on the economy out of the last five:

Sources:  Forbes (Hartung article); Forbes (Ungar article)

~Mark Esposito, Weekend Blogger

By the way and for better or worse, the views expressed in this posting are the author’s alone and not necessarily those of the blog, the host, or other weekend bloggers. As an open forum, weekend bloggers post independently without pre-approval or review. Content and any displays of art are solely the author’s decision and responsibility. No infringement of intellectual property rights is intended and will be remedied upon notice from the owner. Fair use is however asserted for such inclusions of quotes, excerpts, photos, art, and the like.

190 thoughts on “Best Out Of Three Rounds: Obama vs. Reagan On The Economy”

  1. @slohrss29: Doesn’t that strike anyone strange with the turmoil there right now that oil prices are falling?? Hmmmmmmm.

    I have seen a few remarks about that recently.

    It would seem that war in oil producing regions would tend to reduce supply and that ought to send prices higher.

    Recently someone (maybe NYT or WAPO) wrote a glowing piece that fracking was producing enough to keep prices low.

    Dean Baker wrote that current consumption is far below forecasts of consumption made before the recession. If you believe that investment takes years to result in production capability then we might have ample supply because production capability is sized for pre recession demand.

    And someone noted that the Saudis have been big enforcers price by altering their production. The claim is that Saudis have not reduced production to increase prices because fracking only makes sense if prices are above a certain level. Low prices now could greatly reduce competition from fracking later and also serve as a waring to investors who might put their money into other competing forms of energy.

    In effect the Saudis could be sending a message if you compete too much with us we can pull the rug out from under your energy investment when ever we want by manipulating supply to lower prices.

    There are probably other possible reasons as well.

    1. @bigfatmike – says there is a glut of high quality US oil so as that crude prices have fallen off and with the Keystone Pipeline ready to start up with 700,000 gallons a day in Cushing Ok there is going to be a real glut.

      Adam Bedard, a market analyst for High Sierra Energy, a subsidiary of NGL Energy Partners LP, agrees that pressure will rise on the federal government to loosen crude-oil export restrictions, which date back to the 1973 OPEC oil embargo. Oil storage in the Gulf region appears to be filling up, he says. “It’s like someone built a superhighway where there wasn’t one before.”

      http://online.wsj.com/articles/SB10001424052702303722104579239831640276094

  2. Biography, not Autobiography, I got carried away, you know how arrogant I can be here lololol

    1. happypappies – many authobiographies are ghost written. Just ask Obama and the Clintons.

      1. Paul C. Schulte – Yeah, I know and they get rich off of them. I know I sure would be proud to have Bill Ayers of Weather Underground write my memoirs – gee whiz and to think that Bob Dylan even sang a song about him – that is just sooo cool. I am so ultra impressed. I know Ayers has mentioned this more than once because he is soo proud.

        And then we have the Clintons that didn’t have a dime when they got out of the White House. Bill Clinton also earns millions delivering paid speeches and is reported to have received $15 million for his memoir, “My Life.”

        In the interview that aired Monday, Hillary Clinton told ABC’s Diane Sawyer, “We came out of the White House not only dead broke but in debt. We had no money when we got there, and we struggled to piece together the resources for mortgages for houses, for Chelsea’s education. You know, it was not easy.”

        When Sawyer followed up by noting that Clinton’s typical speaking fee of about $200,000 was about five times the country’s median income, Clinton defended her paid speechmaking.

        “I thought making speeches for money was a much better thing than getting connected with any one group or company, as so many people who leave public life do.

        “Let me just clarify that I fully appreciate how hard life is for so many Americans today,” Clinton told “Good Morning America” host Robin Roberts. “It’s an issue that I’ve worked on and cared about my entire adult life. Bill and I were obviously blessed, we worked hard for everything we got in our lives and we have continued to work hard.”

        Let me just stick my finger down my throat…….
        http://www.washingtonpost.com/blogs/post-politics/wp/2014/06/10/hillary-clinton-clarifies-wealth-comments-says-she-fully-appreciates-middle-class-struggles/

        1. happypappies – I think at last count, nobody that Hillary stumped for won. Same for Obama. That has got to smart. Karl Rove was saying, last night, that she had not doing anything worthwhile in over 5 years.

          1. Paul C. Schulte – I have many wonderful photoshopped pics of Hillary.. I need to figure out how to put them on wordpress as they would be so apropos 🙂

  3. I would ignore anyone who calls you and I “Dummies.”
    ———–
    I is the subjective; me is the objective. I wouldn’t say “dummy” but maybe ignorant.

  4. Elaine M.- I noticed the references to David Stockman by you and others. I would like to refer you to a Feb.3, 2011 FORTUNE magazine article about Mr. Stockman.
    One can also google “David Stockman, Collins and Aikman” for some interesting material.
    I remember very well the flap in the Reagan years when Stockman, a key advocate and designer of Reaganomics, discredited Reaganomics. It always seemed to be something if an unresolved contradiction.
    I think the Collins and Aikman story is, as far as the media are concerned, irrelevant and/or unknown to them.

    1. mespo727272

      Bfm & swm:

      It’s amazing how many people have no idea what an ad hominem attack is. It is not a pointed reply to your facts as many dolts think or even verbal abuse. It is an assertion that because the speaker is bad in some way, thus his argument is bad.

      But then again it shouldn’t be that amazing. John Stuart Mill had it right when he explained it:

      http://www.brainyquote.com/quotes/quotes/j/johnstuart201721.html

      Just like there is no arguing with it, there is no hiding ignorance. All we can do is stare in awe and thank our lucky stars that our parents didn’t let us end up like that.

      Mespo – whatever, You know, I was going to complement you on your article because I thought it was clever, and I was going to request you write my autobiography, but since you can’t tell the difference between a Classical Liberal and a Conservative, well, Forget it. 🙂

  5. Now Annie to Clarify, not your whining but Lib Mothers who say they have to pay taxes cause they don’t unless they are so rich they should

  6. First poll results are in now:

    40% say Obama is the best POTUS on the economy
    25% say it’s Reagan

    Interestingly, about 19% give the nod to Clinton.

    I’d say that’s about right.

  7. Bfm & swm:

    It’s amazing how many people have no idea what an ad hominem attack is. It is not a pointed reply to your facts as many dolts think or even verbal abuse. It is an assertion that because the speaker is bad in some way, thus his argument is bad.

    But then again it shouldn’t be that amazing. John Stuart Mill had it right when he explained it:

    http://www.brainyquote.com/quotes/quotes/j/johnstuart201721.html

    Just like there is no arguing with it, there is no hiding ignorance. All we can do is stare in awe and thank our lucky stars that our parents didn’t let us end up like that.

  8. @Big fat Mike and swarthmoremom – Nice ad hominem attack on my information of the Gatsby Effect. Kinda ignorde that in lieu of my first statement because you ignored the fact that gas prices ALWAYS go down in the winter because of the formula change no matter what we are paying per barrel. right now because of conflict ridden countries the price per barrel is falling and any thinking person, as I am was probably wondering all summer if that would happen,

    I know it went down. Did you read Yellen’s article? She said that hardly any middle class people are there to throw money in the stock market to take advantage of a Bull Market. So they are worried because everyone thinks the American Dream is a nightmare. And my comment still holds because who knows what those vampires in the Fed are up to anyway. They are capable of anything. imo. 🙂

    1. @happy: ” Nice ad hominem attack on my information of the Gatsby Effect.”

      Really you give me too much credit.

      I did not comment on the ‘Gatsby Effect’ despite it being one of my very favorite topics.

      Perhaps your were giving me partial credit for work done by Swarthmoremom. I hope she does not mind sharing. In any case, mom thanks for all your help. If I ever again need a lab partner, you’re the one. Guys like me need all the help we can get.

      I did comment on inflation and mention several reasons why reasonable people think that under current economic conditions the chance of hyperinflation is only slightly more likely than flying pigs taking over the earth. Which raises the intriguing question do flying pigs have better economic ideas than the current congress?

      I was going to comment on “ad hominem attack” but somebody beat me to it. This place is getting so competitive.

        1. ” economic policy comes under the Executive branch. Obama is in charge of that.”

          Good point. But the last I heard implementing much of any fiscal policy requires cooperation from congress. We now have a congress filled with people who want to return to the gold standard and pay off debt during the middle of a recession or low economic growth.

          Flying pigs couldn’t do much worse. And considering the well known intelligence of pigs they might do much better.

          Besides pigs are friendly and cute.

      1. bigfatmike- since you don’t know me and I don’t know you, I have reviewed your comments – I think you need to realize I was kidding and mespolian took advantage of it. Thus the end of my first comment when I was saying “I just don’t know where to start here”-

        mmmmmm diminished intergenerational mobility interesting. Sounds like we are on dangerous ground here and my bs detector is going off.

        Yellen deliberately misunderstood what I understand to be the Gatsby effect with these kids.
        http://www.inquisitr.com/102423/the-modern-great-gatsby-syndrome-and-the-coming-social-perfect-storm/
        This is not a new article but one I have kept with me.

        Paul B. Farrell wrote in a commentary on the MarketWatch blog

        Remember the Roaring Twenties? The Crash of 1929? Great Depression? Just days before the crash one leading economist, Irving Fisher, predicted that stocks had “reached what looks like a permanently high plateau.”

        Yes, he was trapped in the “Great Gatsby Syndrome,” an earlier version of today’s Super-Rich Delusion. It was so blinding in 1929 that the president, Wall Street, all America were sucked in … until the critical mass hit a mysterious flash point, triggering the crash.

        Yes, we’re reliving that past — never learn, can’t hear. And oddly it’s not just the GOP’s overreach, the endlessly compromising Obama, too-greedy-to-fail Wall Street banksters, U.S. Chamber of Commerce billionaires and arrogant Forbes 400. America’s entire political, financial and economic psyche is infected, as if our DNA has been rewired.

        The Collective American Brain is trapped in this Super-Rich Delusion, replaying the run-up to the ’29 Crash.

        Read more at http://www.inquisitr.com/102423/the-modern-great-gatsby-syndrome-and-the-coming-social-perfect-storm/#AGhVBZvusPfr8GKd.99

        I was just pointing out in my own smart aleck way that who really knows what is going on with the President and the Fed manipulating the Money Markets because I don’t think our Market is by any means Free anymore.

        1. @happypappies: “I think you need to realize I was kidding and mespolian took advantage of it.”

          Actually, I value the ideas you bring to the blog, even though I usually disagree. I am sure I could find a blog where everyone agrees with me – but then what would be left for me to say.

          Happy, it is a symbiotic relation. You put the ideas up there and I try the best I can to knock them down.

          Occasionally we hear people whining about civility. I think it is important to realize that this place operates much like a bar room brawl. Sometimes you take swing and miss, sometimes you hit, and sometimes you get a knuckle sandwich. But, If you are not feeling it then you are not doing it right and you need to try harder.

          Happy, you bring interesting ideas to the blog. We cannot possibly know which ones will hold up till we put them to the test. I can’t possibly criticize your positions with out learning a little about them. And I can’t defend my own positions without taking your criticisms seriously.

          You have brought up a really interesting topic, that covers a lot of ground, income distribution, income inequality, Gini coefficient, hollowing out of the job market, globalization, the historical slow down of economic growth, R J Gordon’s headwinds that limit economic growth, secular stagnation.

          And one of the key questions in all that, aside form the moral issues, does great income and wealth inequality really have bad effects on the economy. I think it does. But the answer right now is probably a big maybe.

          1. bigfatmike – thank you for your words of wisdom and encouraging reply. I don’t particularly mind being roughed up as I am from that terrible Ferguson area in a previous life before I was a happypappie like barkin dog – so anyway – How could a great divide NOT have bad effects on an economy? That’s the question. I don’t share everything I think as it’s not pc and I don’t want to get into it if you know what I mean. Also, What I think is constantly changing as the times change as my head is not made of stone like some peoples are on here lol 🙂 But you won’t here me complain about civility usually unless it’s something just to straighten out between me and someone else. You know?

            I am glad you find what I have to share of interest because everyone around me gets a case of glazed eyes so I have to retire to the computer. lol.

  9. Squeeky:

    There once was a girl named ….
    Who thought owning gold was a crime
    The dollar debased
    Now she has egg on her face
    And is pulling tricks for a dime.

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