Like a broken record, Obama claims to need four more years to fix the economy because he inherited from George W. Bush the worst economy since the Great Depression. He tells us when he took office he found it was worse than he thought, but that rings hollow. After all, if he thought it was the worst since the Great Depression, how much worse could it have been? Regardless, we need to revisit the claim that this is the worst economy since the Great Depression. Is it really? I think Ronald Reagan would argue differently were he with us today.
According to historical data of the Federal Reserve Bank, when Obama took office, the Fed’s prime interest rate was only 3.25%. By contrast, just one month before Reagan took office from President Jimmy Carter, the prime rate hit an all-time high of 21.5%, dropping to “only” 20.5% the day he took office. The inflation rate Obama inherited was zero, whereas Reagan inherited an inflation rate of 13.5%. The economy under Jimmy Carter was so bad that a new term, “Misery Index”, was created (an economic measure derived by adding the inflation rate to the unemployment rate). The price of gold, a bellwether reflecting economic stability, hit an all-time high in the last year of Carter’s presidency, reaching $2328/ounce in 2011-inflation adjusted dollars. We could go on and on, but the point is that Ronald Reagan would have gladly traded the economy he inherited for the one Obama inherited. Granted, the economy Obama inherited was bad, but not the worst, and he asked us for it.
Over the next four years following his election, instead of blaming Carter for a long-term, moribund economy, he just got to work fixing it. He accepted the short term pain that came with wringing the inflation out of the money supply, and he accepted the deficits that were incurred as the cost of rebuilding the military that Carter had dismantled. He suffered through the harsh criticism of “Reaganomics”, criticism showered on him by Democrats, the media, and even some members of his own party. As a result, the money supply stabilized, interest rates plummeted, unemployment rates plummeted, and the longest period of economic prosperity and expansion in history was launched. And he did all of this while having to deal with a Democrat-controlled House of Representatives, which controls the budget process.
By contrast, Obama began his first term with a supermajority in both the House and Senate, and he was literally able to pass anything he wanted without compromising to get a single Republican vote. Indeed, Obama pushed through a nearly $1 TRILLION stimulus bill, and later ObamaCare, without a single Republican vote. Yet even today he still blames his failures on an economy he “inherited” from Bush and Republican obstructionism. Of course, he can’t explain how Republican obstructionism hindered him when he had full control of all the levers of government power, but we are not supposed to question that. It makes one wonder why he even wants a second term. After all, if he is still complaining about the economy he inherited from Bush four years later, think of how much he’ll complain about the economy he inherits this time!
As I’ve watched the debates, commercials, and news coverage of this campaign season, the one thing that really strikes me is how little Obama campaigns on the argument that the achievements of his first term warrant a second term. He rarely touts the “successes” of the stimulus bill or ObamaCare, and only provides nebulous references to “restoring America’s standing” around the world.
When Reagan ran for a second term, he did so riding a wave of successes both domestic and foreign. The enthusiastic, positive campaign was encapsulated in the now-famous “Morning in America” commercial:
“It’s morning again in America. Today more men and women will go to work than ever before in our country’s history. With interest rates at about half the record highs of 1980, nearly 2,000 families today will buy new homes, more than at any time in the past four years. This afternoon 6,500 young men and women will be married, and with inflation at less than half of what it was just four years ago, they can look forward with confidence to the future. It’s morning again in America, and under the leadership of President Reagan, our country is prouder and stronger and better. Why would we ever want to return to where we were less than four short years ago?”
And herein lies the problem for Obama…things have only gotten worse over the last four years. He campaigned (rightly) attacking the Bush deficit spending, calling them immoral and unpatriotic. He then turned around and posted four straight years of deficits triple or quadruple what the highest Bush deficits were. He inherited a 7.8% unemployment rate, passed the “stimulus” bill, and promptly saw unemployment spike to over 10%, average 9.2% over his presidency, stay above 8% for 43 straight months, and only last month drop back to the same level as the day he took office. Unfortunately, even that achievement requires an asterisk, since that 7.8% represents a number which did not include the unemployment numbers for California, the nation’s most populous state, and ignores the fact that a half million Americans simply gave up hope of finding employment in the last two months alone, and are therefore not counted in the unemployment rate. We also face gas prices double what they were the day he took office, and skyrocketing electricity prices (to be fair, he told us in 2008 that he would try to bankrupt the coal industry, and that his policies would “necessarily” cause electricity prices to “skyrocket”).
In Reagan’s second term we saw the dividends of his military build-up, as the Soviet Union began its final death throes. Obama, on the other hand, is seeing his foreign policy unravel, with the Middle East literally in flames, Iran close to acquiring a nuclear bomb, terrorist organizations elected to lead many Muslim countries, a dead ambassador and burning U.S. embassies. The Fast and Furious scandal, where the Obama administration sold assault weapons to Mexican drug cartels, which were used to kill American law enforcement and hundreds of Mexicans, has been swept under the rug but not forgotten. America faces a massive debt crisis, our national debt having increased by 50% in just three years under Obama, and we are facing another credit downgrade. We have enslaved our children and grandchildren with the debt burden we’ve placed on them.
And this, my friends, is why Obama and Biden can’t run on their record. It is why they have not outlined an agenda for the next four years other than giving us more spending, more debt, more class and race warfare, and more “flexibility” to allow our enemies to dictate American policy. It is why they have used scare tactics, lies, and the fear that women all across America will have to buy their own birth control. Oh, the horror!
By contrast, Mitt Romney and Paul Ryan offer a plan to back us away from the fiscal cliff, to address our entitlement-driven debt crisis, to restore American leadership around the world, and to get our economy roaring again. I don’t agree with all of his policies, but one thing I do know is that, if Romney is elected, we will once again have a problem solver, not a problem creator, in the White House. We will have a man of great personal integrity and charity, and one who does not want to “fundamentally transform” America, but to restore it.