“Now, I won’t pretend the path I’m offering is quick or easy. I never have….[T]he truth is it will take more than a few years for us to solve challenges that have built up over decades. It will require common effort and shared responsibility, and the kind of bold, persistent experimentation that Franklin Roosevelt pursued during the only crisis worse than this one.”
No, this was President Obama last week. In 2008, he gave no clue that his recession-fighting methods would take time—so much time that he’d be talking about the need for more time come the next election four years down the road.
In 2008, when he accepted the nomination, lest we forget, Obama’s gems were of this variety:
“[M]any of [my] plans will cost money, which is why I’ve laid out how I’ll pay for every dime….I will also go through the federal budget, line by line, eliminating programs that no longer work and making the ones we do need work better and cost less.”
OK, so that was all cashiered in favor of $1.4 trillion deficits and one of the lamest economic growth programs of all time. And by the way, Obama’s attempt to associate the achievements of his first term with those of FDR’s is specious. Ex-federal government GDP growth in the four years after FDR accepted his party’s nomination in the summer of 1932 was about 30%.
Here’s Obama’s mark: negative 0.3% cumulative. This really should be the statistic brought down on this man’s head during the present campaign. Since Obama accepted, with soaring rhetoric, his party’s nod for president in the summer of 2008, economic growth excluding that of the president’s own federal government has been less than zero.
This is so pathetic that Obama has only one rival in the modern history of the presidency on this score: Herbert Hoover, who was also negative. Between Hoover and Obama, the worst a president had ever done in the four years between first and second nomination was to preside over 6.6% total ex-federal growth, a distinction belonging to George W. Bush as he stalled out the Bill Clinton-Newt Gingrich boom.
Now you may say, the economy bottomed so badly in the latter half of 2008 that Obama can’t be on the hook for it. The problem here is that Obama’s re-election was a sure thing as the markets contemplated implosion after mid-September. Furthermore, once 2009 came, Obama only carried on the W. moves of the previous fall, including TARP (which along with the wildly appreciating dollar of that time Treasury secretary Timothy Geithner continues to brag about) and the automakers’ bailout.
But the point is this: people running for president say they have solutions to problems. The problem Obama faced as he accepted the nomination four years ago has only gotten worse. Still, let us indulge this chief executive. He says he needs more time, owing to the special circumstances of the Great Recession.
His advisors cite the fashionable view that the 2009 book by Carmen Reinhart and Kenneth Rogoff, This Time is Different, indicates through vast research that recessions born of “financial crises” take a longer time to recovery than recessions of the ordinary type.
The problem with this view is apparent to anyone who consults this volume. Reinhart and Rogoff speak almost exclusively of financial crises of the sovereign debt variety. No doubt, there has been such an aspect to this crisis as a global phenomenon—see Greece—but in the United States, the financing of the deficit has never been easier, on account of unprecedentedly low interest rates and a flight to U.S. treasuries.
The president’s advisors cite the New Deal, saying it needed a lot of time to heal the wounds of the Great Contraction of 1929-1932 supervised by Hoover.
But as laid out above, FDR’s economy roared out of the gate, at one of the greatest rates of expansion ever. The reason we say that the New Deal failed is that the economy stumbled badly in FDR’s second term, as the president redoubled his efforts in the direction of tax increases, sops to unions, and regulations.
Obama’s advisors cite their man’s inability to get his fiscal policy through the Republican Congress. But as every student of the presidency knows, you nail down your reforms during your first two years, in that the midyear elections inevitably go to the opposite party.
And indeed, Obama did this. He got his stimulus and Obamacare prior to the seating of the new Congress in early 2011. The results are in: Obamanomics has stifled growth like no policy this side of the 1930s.
By way of comparison, Ronald Reagan pushed through his tax, budget, and regulatory policies in his first year in office (1981), and duly saw his Republicans get trounced in the midterm elections of 1982. Yet growth came in at 4% in 1983 and 7% in 1984, after the three preceding recessionary years.
You can say that Reagan had to compromise with the opposition after his first initial successes in policy—but then again so did Obama, in the form of the extension of the Bush-era tax cuts in late 2010.
Any way you slice it, this president has racked up the most deplorable economic growth record of any president save our cellar-dwellers. The reward of reelection would seem to be in defiance of the facts.
Books on the topic discussed in this essay may be found in The Imaginative Conservative Bookstore. Originally published at Forbes.com the essay is reprinted here with gracious permission of Brian Domitrovic.