President Barack Obama and fellow Democrats meeting in Charlotte for their national convention danced around the answer to the question, “Are you better off than you were four years ago?”
If they were dancing Friday, it was probably to a dirge.
Economists had been expecting 125,000 new jobs in the August jobs report. Friday’s report showed only 96,000 jobs created in August and an unemployment rate that dropped to 8.1 percent. But the real unemployment rate is in the double digits, because people are not included in the jobs stats if they’ve become so frustrated at failing to find a job they’ve stopped looking.
“The most important answer to the ‘better off’ question is this: Americans on the whole are better off than they would have been without the stimulus. But (yes, there’s always a but) many are worse off than they were four years ago, and that means more work needs to be done,” writes the editorial board of Bloomberg News in an editorial headlined, “Are You Better Off? There’s No Easy Answer.”
This, Dear Reader, is in an editorial defending the president’s record. It’s the meme adopted by Obama and his apologists.
Many of us can remember the 1970s economy and its recessions, Arab oil embargoes, and “stagflation”—a combination of economic stagnation and rapid price inflation. By the time of the 1980 presidential campaign between incumbent Jimmy Carter and challenger Ronald Reagan, the nation had double-digit interest and inflation rates and unemployment rates between 7.5 and 8 percent. This compares to the 7.8 percent rate in 2009, when Obama took office, and inflation rates of about 2 percent and interest rates that have been at or near record lows throughout his presidency.
Reagan won that election and took office early in 1981. The federal budget in 1981 was cut nearly 5 percent, the first of several cuts in tax rates occurred, and deregulation begun late in the Carter presidency continued. By November 1982 a strong recovery was underway.
Inflation, unemployment, and interest rates all fell to the single digits during Reagan’s reign. Real per-capita disposable income grew 18 percent from 1982 to 1989.
Contrast those results with the Obama regime’s record of more spending and regulation, calls for higher taxes on high-income earners, and new taxes in the Obamacare law:
* Median family income down approximately $4,000 and per-capita disposable income down from $33,229 during the 2008 campaign year to $32,677 in 2011. There was no growth in per-capita income during the first half of 2012, leaving it just $511 higher than the $32,166 when the so-called recovery began in 2009, according to the Bureau of Economic Analysis.
* Nearly 12 million more people on food stamps.
* 43 months with official unemployment above 8 percent, the longest streak with such high unemployment since the Great Depression.
* More than 800,000 people added to the ranks of long-term unemployed since the start of the “recovery” in 2009.
This is not to suggest Reagan (and the Congresses he worked with) did everything right, or that government can start and stop an economy like a machine. The national economy is made up of hundreds of millions of persons making billions of decisions and interacting with billions of others around the world. People don’t necessarily act the way governments want or expect.
But experience shows lower taxes and less regulation make for happier people and better economic performance. For you anti-Reagan scoffers, remember the Kennedy tax cuts that helped boost the economy in the 1960s.
Sharp tax increases loom beginning January 1 if Congress allows the tax cuts of the early 2000s to expire. Financial and health care industry laws passed during the Obama presidency cover thousands of pages each, with thousands more pages of regulations to be written. The national debt has virtually tripled in the last 10 years. And whether we go with the Romney-Ryan budget projections or the Obama-Biden projections, trillions more dollars of debt will be added.
People have good reason to feel pessimistic—and very good reason to doubt more spending, regulation, and “monetary stimulus” will make things better.
Steve Stanek ([email protected]) is a research fellow at The Heartland Institute in Chicago.