See my comments in red.
Love,
Dad
Dad,Since you asked, I sent the graph to hear how you would interpret it. To my eye, the graph seemed oddly symmetric around the Obama inauguration, with the rate of job losses increasing though the end of the Bush presidency then abruptly retreating under the Obama administration. While this could be a coincidence, it seemed worthy of some analysis. I thought you might be able to shed some light on how to interpret the data, but I didn't find anything particulary convincing in your response. From what I gathered, your points were:That is simply incorrect. Obama's inauguration was January 20th 2009. The financial crisis peaked in early March.
- The recession had already run its course and the economy was turning around when he came in.
- He should have just left things alone.
I'm not sure many people agree that the correct response to the global financial crisis would have been to do nothing. We were on the brink of financial collapse and there is broad consensus that doing nothing would have forced the global economy into a deep depression. Like it or not, swift (Obama administration) goverment response saved our economy.
I'm afraid that you are wrong on all counts here, Son. To demonstrate, I went to two unbiased Stanford economics researchers who wrote a paper on this subject on January 12, 2009, eight days before Obama took office. You can read the article yourself, but what they said was that the worst was over by January, 2009 when they wrote the article, and that the economy would begin to recover by mid 2009---even if the government did absolutely nothing. As they point out, the US and the world was on the brink of financial collapse in September, 2008 when Lehman failed. The crisis of confidence was greatest then, credit dried up and businesses lost confidence. Then the Bush administration and congress passed TARP, which if anything, is what saved the country from financial collapse.
http://www.voxeu.org/index.
You say that the crisis peaked in March, 2009. By that time, the crisis was well over. It's true that the stock market fell to its low point in March but that's not the same thing. I would argue that the market collapsed because investors were alarmed by Obama's radical liberal agenda, all of the debt that would be incurred by the health care program, cap and trade etc., the subsequent inflation that would be caused and the ultimate credit tightening that would be needed. This is what people mean when they talk about a double dip---that the country will fall back into recession in 2011 when the effect of all of these misguided programs would come home to roost. The market began to recover when it became clear that little, if any, of Obama's agenda will ever be enacted.That's more true than ever now.
You did however make a comparison between Obama and Regan. Lib brought to my attention that Regan also faced 10% unemployment in his early presidency. The similarities do not end with the fact that Obama and Regan inherited the two worst economies since the Depression. According to this article, the presidents had similar approaches to dealing with the problem.
Take Regan's quote: "Now, so there will be no misunderstanding, it is not my intention to do away with government. It is, rather, to make it work — work with us, not over us; to stand by our side, not ride on our back. Government can and must provide opportunity, not smother it."
And compare it to Obama's: "but whether it works — whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. Those of us who manage the public's dollars will be held to account."
It's no suprise that many key Regan advisors are now Obama supporters such as Colin Powell and former Reagan Chief of Staff Ken Duberstein. Perhaps you would consider a change with this new evidence?
You will never see the day when I change to become an Obama supporter--that's a prediction you can take to the bank.
I did not compare Obama to Reagan. What I did do is say that Reagan was a "uniter" not a "divider." Comparing Obama to Reagan does Reagan a huge disservice. Reagan was an experienced person who had run the largest state in the United States, embodied conservative principles and was able to unite the country. Obama has not done anything but run for President, is to the far left and has divided the country as never before. (Why else am I spending all this time responding to your e-mail?)Reagan believed that the American people were in the best position to make the decisions that affect their lives. Obama wants him and the government bureaucrats to tell Americans what to eat, wear and drive.
Reagan faced a far worse economy than Obama---it's not even close. If you refer to the statistics, http://www.miseryindex.us/
Reagan's job was much tougher because he had to deal with double digit inflation which was crippling businesses, as well as double digit interest rates. Paul Volcker as Fed Chairman tightened the money supply (which is the reason why unemployment went up in 1982 and 1983), while Reagan cut taxes and reduced government.
The four pillars of Reagan's economic policy were to: http://en.wikipedia.org/wiki/
- Reduce government spending,
- Reduce income and capital gains marginal tax rates,
- Reduce government regulation of the economy,
- Control the money supply to reduce inflation.
Anyone that says that Obama's approach is similar to that of Reagan doesn't know what he or she is talking about. Obama should be compared to FDR, who we now know prolonged the depression by his misguided policies. As you can see, the Obama deficits are now over 10% of GDP, the highest since World II. http://www.
The rest of your email focused on predictions for the future. Making predictions is easy. You don't need to back up your beliefs with evidence, and you certainly don't have to worry about someone challenging your hopes and dreams with data.
I've given you plenty of data.
But, if we are making predictions, I will predict that the similarities between Regan and Obama will strengthen in the future:
- Both Obama and Regan will be credited for fixing the worst economies since the Depression
Like FDR, Obama will be known for making a bad situation worse.
- Both Obama and Regan will serve for 2 terms
I suppose anything can happen, but I believe that he will follow Jimmy Carter's example and get booted after four years.
- Both Obama and Regan will be credited for building a powerful political coalition that will last for decades
He's going to have to work hard. The independents, who were responsible for him getting elected, have already jumped ship. Check the results of the gubernatorial races in New Jersey and Virginia and the Senate race in Massachusetts---all states that Obama carried.. Make no mistake about it, these were votes against Obama and his agenda. The worst thing that happened to Obama was that the Dem's had majorities in both houses. Therefore, he thought that he didn't have to talk to anyone. By being so arrogant, he's divided this country as never before.
- Both Obama and Regan will run large deficits through their presidency as a result of political, economic, and military externalities.
Reagan's deficits were half those of Obama based as a percentage of GDP, and they went down during his presidency.
- Both Obama and Regan will be credited with critical victories over the era's two most serious threats to the American way of life: Communism and Terrorism. While both challenges threatened America from the outside, the real danger was loosing what America stood for from within (with Dick Cheney filling in for McCarthy there).
The world thinks that the president of our great country is a joke. In the end, that's what bothers me the most. The United States is a great country that deserves much better. Unfortunately, our system works in a way that every once in a while a huge mistake is made---Carter in 1976 and Obama in 2008. I'll be here waiting for the next Reagan to make things right.
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