By Mark Esposito, Weekend Blogger
In 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:
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:
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.
Just this past weekend mespo ridiculed “sewer cleaners,” a job my immigrant great uncle held. There is an elitist attitude here, that if you don’t have a college education you are less important. In a moment of smug, mespo made a gaffe. You know a gaffe is saying what you really think. Hell, SWM, people will even pad their resume in order to be part of the elitist club here.
nick , I think that you are the one that has spoken out against blue collar unions.
nick, ‘ .We see elitists here denigrating blue collar jobs.” nick Never have seen that here . Happy pappy. “hyperinflation” huh. The price of oil and commodities drop nearly everyday
” Happy pappy. “hyperinflation” huh. The price of oil and commodities drop nearly everyday”
If anything we are looking at the possibility of deflation.
Many signers of the famous (infamous) Bernanke letter which warned that inflation was imminent are now equivocating and claiming they were just making a general observation or never mentioned a time frame for their warning.
Nothing in life is certain. But we can be about as certain as anything in all economics that there is no threat of significant inflation so long a the economy is 10% below its production possibilities frontier which has been the case for several years.
BTW the 5-Year Breakeven Inflation Rate is just 1.44% while the 10-Year Breakeven Inflation Rate is just 1.9%.
These rates are estimates of what people with investments in financial instruments believe inflation will be over the next 5 or 10 years. In other words even the best and brightest of Wall Street think inflation will be less than 2% over the next 10 years.
That is an important consideration because inflation is an complex phenomenon that depends not just on the money supply and the condition of the economy but also rational expectations about inflation.
slohrss, Much of the debt is due to the education industry and the elitism mindset that a college education is the holy grail. We see elitists here denigrating blue collar jobs. Who the hell is going to fix our cars, be plumbers, electricians, tool and die makers, etc.? These are rewarding, noble, GOOD PAYING jobs. Those w/ entrepreneurial skills turn the job into a company biz.
It will be interesting to see how this generation feels about an all-intrusive government in the next few years. What a way to start life as an adult–crippling debt.
slohrs, The Dems are leaking millenials like the Titanic because of no jobs for college grads in the past 6 years.
@Tyger Gilbert
All I did was cut and paste the image’s url into the comment box.
Don’t forget about the sleeping disaster of student loan defaults. All those wonderful jobs created don’t appear to be giving college grads the kind of income they need to pay back these ridiculous amounts of money.
Mespo,
Thank you for introducing me to this site.
Very interesting truth.
I don’t even know where to start here. Seriously. We are probably on the verge of hyperinflation right now. Even Janet Yellen at the Fed is concerned about what she calls the “Great Gatsby Curve” Interesting to say the least.
Janet Yellen, the chair of the US Federal Reserve and the most powerful woman in American finance, has taken a strong stance suggesting that the growing rift between the rich and the poor in the US is a cause for great concern.
In a speech pointedly titled “Perspectives on Inequality and Opportunity from the Survey of Consumer Finances”, Yellen spoke in the strongest terms about the rise in economic inequality and chided the US for falling behind on its economic standards. Yellen delivered her remarks to an audience of economists at a conference about inequality at the Federal Reserve Bank of Boston.
“The extent of and continuing increase in inequality in the United States greatly concern me,” Yellen said. She noted that “the distribution of income and wealth in the United States has been widening more or less steadily for several decades, to a greater extent than in most advanced countries.”
Yellen suggested that such a trend, unaddressed, was contrary to the founding principles of the United States. “I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity,” she said.
She also cited the “Great Gatsby curve,” – “the finding that, among advanced economies, greater income inequality is associated with diminished intergenerational mobility”
mmmmmm diminished intergenerational mobility interesting. Sounds like we are on dangerous ground here and my bs detector is going off.
http://www.theguardian.com/money/2014/oct/17/federal-reserve-chair-janet-yellen-inequality-gap-rich-poor
Anyone like to tell me how to embed a graphic in a comment here?
Dammit, I forgot.
Well done, Esposito!
Good job!
Importantly, David Stockman was held up in support of Esposito, but his writings find him decrying Esposito’s position.
It’s like a car accident; how can you not look?
It’s David Stockman himself refuting Esposito.
I wrote nothing myself.
His response is about me, not Stockman’s refutation.
Annie:
Save those cookies.
Sorry I missed it earlier. Here’s the type of integrity I get from some commenters:
On the football post of yesterday:
“Don’t worry, mespo, I’ll not write on any of your posts anymore.”
~ Pogo Hears A Who
I count three on this thread alone; more on the FB thread after this “principled” pronouncement. That’s why I don’t read most comments anymore.
Kudos to a loyal reader from long ago for pointing this out to me albeit by back channel.
mespo – so someone else is doing your fact checking? They should have fact-checked the article.
I see this interesting cheering section going on between mespo, Annie and Elaine. It used to include Dredd, but he is currently banned. Chuck was part of the cheer squad while JT was gone but he is gone again, I suppose he is too busy at Gene’s. You guys do realize you are in a losing position here, right?
http://wolfstreet.com/wp-content/uploads/2014/10/US-Gross-National-Debt-1972-2014.png