Reagan vs. Obama: Battle of the GDP
A Welterweight Fight! At Best.
The other day I entered into a Facebook argument (I spend an inordinate amount of time arguing on Facebook) about the comparison between President Obama and Ronald Reagan with regard to their economic achievements. The argument began from a posting of an article by Adam Hartung in Forbes Magazine, “Obama Outperforms Reagan on Jobs, Growth and Investing.” Okay, it was an iffy article, but I can’t resist an opportunity to provoke my right wing friends (of which I have many for some reason).
Right on cue, one of my right wing friends posted a response in the form of an article by Lance Roberts that appeared on the Advisor Perspective website called “Obama Outperformed Reagan? Hardly.” This article contained the typical homage to the miracle of the Reagan economy. Trite comparisons of the recession in the early eighties with the Great Recession faced by Obama. Lame rationales for why any progress under Obama doesn’t count. Graphs arranged in such a way as to emphasize dramatic shifts despite their irrelevance. Complete silence about the fact that Reagan ran monster deficits, grew the government and raised taxes during his time in office. Plus, the author offers the requisite claim that Reagan ushered in an era (20 years according to Roberts) of unprecedented prosperity, despite growing inequality, stagnating wages and an economic shift from manufacturing to a finance driven service sector. Pretty typical stuff, really.
On the other hand, let’s give my right wing friend credit where it is due. Hartung offers some interesting data to support his inference that Obama is “economically, the best modern President.” However, he really does not offer an analysis of GDP. Roberts does, but he hedges by comparing Reagan’s full term to only six years of Obama’s performance. So I figured I would rectify that. Below is the real GDP for Presidents Reagan and Obama in their first six and a half years. Now in this case, I’m looking at the slope of the line, not the raw numbers.
What I see appears to give Obama the edge when it comes to economic growth, but only slightly. So I figured I would bring these two lines together and focus them specifically on growth of GDP with both Presidents starting at zero. The results are as follows.
Again, advantage Obama. Now that does not mean that this advantage will last. There’s still a year a couple of years left.
But this leads me to the larger point. Being in a position to referee this welterweight fight (nothing against real welterweights…you guys are awesome!). When it comes to the economy neither Obama nor Reagan are anything to wave a big, foam finger in the air for. Since at least the Carter Administration, modern presidents, regardless of party, have turned their backs on the New Deal policies that really did usher in an era of prosperity. Economic policies since the seventies have concentrated on just subtle variations of the same theme: deregulation, privatization and free trade. The only real difference between the parties has been in protection of some vestige of the social safety net, with Republicans wishing to pull the rug out from under the poor and privatize the benefits of the old while Democrats continue to, more or less, support at least the existence of a basic, government funded safety net.
Reagan provided the legitimizing paradigm for this shift. “Government is not the solution. Government is the problem.” The Great Communicator so effectively denounced the very government that he grew that it is now inconceivable to argue that government even has a function that cannot be better served by the private sector. The existence of something called “the commons” and “the public interest” are no longer a part of the political vernacular. The message of the Progressive Era and the New Deal has been replaced by admonitions of “big government” and “tax and spend liberals.”
That is the true nature of the so called economic miracle that was the Reagan Era. Indeed, most people have not benefited from the economic growth that has happened since the eighties. Yes, we have some fancier toys, but as far as our standard of living, our wages, our security, most Americans are worse off in the new finance based economy that has supplanted the industrial revolution for which Reagan was the chief spokesman. Yes, it could be argued that this is, in and of itself, transformative. Indeed it is. But “great?” No. Not even close.
So has President Obama diverged from the economic trend of the last thirty years? Well, there’s still a couple of years left, but it’s unlikely. True, there were some early victories. Obama’s stimulus saved the nation from complete economic collapse. Thanks for that! The auto industry was saved despite right wing frothing about “Government Motors.” Dodd-Frank, and the Consumer Financial Protection Agency revealed some early signs that maybe the United States was due for a return to the progressive paradigm. We even got an ever so slight tax increase on the wealthy.
Since those slight detours, however, President Obama has largely returned to the Reagan path. Unlike Reagan, Obama has actually shrunk the size of government. Though Dodd-Frank offers some protection and oversight, the very financial system and arcane derivatives mechanisms that brought about the great recession remain in play. The Obama Administration continues to fight for free trade agreements such as the Trans Pacific Partnership (TPP), the negotiations of which are in secret. Yes, there’s been an uptick of manufacturing, but most of the returning jobs are being done by robots, not human beings. Obama has even overseen the renaissance of the U.S. oil industry despite some increased investments in green energy. If President Obama isn’t exactly on the Reagan Road, he is certainly running parallel to it.
Yes, the Republicans! The Republicans! The confounded Republicans! Keep blocking everything Obama tries to do. Okay. But let’s be honest. Obama hasn’t put an awful lot of effort in getting through the Republican roadblocks. Might things have been different if it weren’t for 2010? Maybe, but I see no indicator that a Democratic 112th Congress would have vouched for us the transformative policies that are necessary for reversing the damage done from thirty years of what we’ve come to know as Reaganomics. We would have gotten more stimulus, which would have been a significant improvement in the lives of millions of people. That’s nothing to scoff at. We’ll be paying for the mistakes of 2010 for at least another decade, if not more. But there is nothing to indicate that President Obama would have presided over an exciting new direction for the American economy. Sorry.
I’ve been thinking a great deal about the Obama legacy since reading Paul Krugman’s article in Rolling Stone defending the President. I’ve found that I’ve spent much of the Obama presidency defending the President from idiotic attacks from the right when what I really wanted to do was challenge the President to make real changes, to institute meaningful reforms that would make for a more just and equitable society. Perhaps, in being so distracted, I’ve been part of the problem. I can’t answer to this quite yet.
At this point, barring some significant changes, good or bad, in the next couple of years, I’m secure in my belief that Barack Obama has been a good president as presidents go. At the very least, I prefer President Obama over the possibility of a President McCain or a President Romney. What he has not been is a great president. And we are in dire need of a great President.