Obama v. Reagan

Mr. Obama still chants a familiar mantra: “It’s all Bush’s fault.”
Many of his supporters still accept that excuse. Recently I overheard a
Black minister make clear that he believed that the disastrous economy
is the result of the “mess” Mr. Obama inherited. There is some truth in
that. However, he is not the only president to inherit a “mess”.
Unfortunately, he is not learning the lessons that history has taught.

Franklin D. Roosevelt, 32nd President of the United States. Photo: Elias Goldensky (1868-1943). Copyright never renewed.

The Great Depression that began with the stock market crash in 1929
quickly affected every nation in Europe. In February of 2009, in an article titled “How Government Prolonged the Depression”, The Wall Street Journal
reported that some economists believed that the economy would have been
back to normal by 1935 if the government had not interfered. They also
concluded that unions exacerbated the problem by negotiating unrealistic
labor contracts that decreased competition in product and labor
markets. If we don’t learn from history, it seems we are indeed doomed
to repeat it. Many town and cities in the United States today are in
financial jeopardy brought about by absurd retirement policies, high
wages, and fringe benefits negotiated by all too powerful unions.

The Wall Street Journal article went on to report that:

The main lesson we have learned from the New Deal is that
wholesale government intervention can — and does — deliver the most
unintended of consequences. This was true in the 1930s, when
artificially high wages and prices kept us depressed for more than a
decade, it was true in the 1970s when price controls were used to combat
inflation but just produced shortages. It is true today, when poorly
designed regulation produced a banking system that took on too much
risk.

Today Mr. Obama celebrates and emulates the reign of FDR, professing
that the New Deal led us out of the Great Depression. Unfortunately,
just the opposite may be true. The unemployment rates for the years in
question tell a more unbiased story. In 1932 the unemployment rate was
23.6%. The rate vacillated from 23.6% to 14.6 during the Great
Depression. On December 8, 1941, the Japanese attacked Pearl Harbor and
we were drawn into World War 2. In 1942 the rate dropped to 4.7%. In
1944, the rate was 1.2%, and at the end of the War in 1946, the rate was
3.9%. One can say with some degree of certainty that the Great
Depression ended when the Japanese attacked Pearl Harbor.

Ronald W. Reagan, 40th President of the United States. Official portrait, 1981.

During the Jimmy Carter years (1977-1981), the country experience
another financial crisis brought on by mismanagement of government. By
June of 1980, the unemployment rate was 7.1%, which was supposedly held
in check by prime interest rates that topped 20%, which in turn caused
the S&L; crisis. When Reagan took office in 1981, it can be
successfully argued that he also inherited a “mess”. But Reagan learned
his lessons from history and stimulated the economy through Reaganomics,
which is also termed “trick down economics.” Reagan was not able to
turn the economy around on a dime and the decline continued until 1982,
when the unemployment rate hit 10%. By 1984, it had improved to 7.2%,
and the improving economy catapulted Reagan to a landslide victory. By
the time Reagan left office in 1989, the rate had continued to improve
to 5.3%.

If we compare the “mess” Reagan inherited vs. the “mess” Obama
inherited, there are many similarities. The difference is the way these
administrations handled their “messes.” One (Reagan) learned his lessons
from history and knew that government interference would only
exasperate a bad situation. He also united the country and patriotism
grew to an all time high.

Mr. Obama has followed the example of FDR instead of Ronald Reagan.
The ensuing comparisons follow suit – with one stark difference: FDR did
not cry racism every time someone disagreed with his socialistic
policies. And Reagan never whined that “it was all Carter’s fault” –
although much of it was.

Barack H. Obama. Photo: Pete Souza, January 13, 2009

To conclude, Mr. Obama is not the only president to inherit a bad
economy. Others have as well. Two others (both Democrats) escalated the
problem; another learned his lessons from history and created a solution
– uniting the country in the process. None, however, surrendered our
national sovereignty in the process, nor did they raid our treasury and
give absurd amounts of our hard-earned tax dollars to foreign entities.
The pages of history have yet to be written for the Obama
administration, but it is my guess that history will not reverse itself
and this administration will become the model for abject failure – that
is if we survive.

What say you? Who was the better President? Obama? Or Reagan?