How Does President Obama's Economic Recovery Compare To Those Of Other Presidents?

[Revmitchell]

The real question is how does President Obama’s recovery compare to the other recoveries of other Presidents from other recessions. Since the Great Depression, there have been 11 other recessions in America before this last one. In all those recessions, the economy recovered all jobs lost during the recession an average of 25 months after the recession began. So the job effects of prior post Depression recessions lasted an average of about 2 years. But here we are today, 5½ years, or 67 months, after the recession started, and we still have not recovered all of the jobs lost during the recession.

In sharp contrast, President Reagan’s recovery from the sharp 1981-1982 recession, which resulted from the monetary policy that broke the back of the roaring 1970s inflation, recovered all of the jobs lost during that recession within 36 months. At this point in the Reagan recovery, jobs had grown nearly 10% higher than when the recession started, representing an increase of more than 10 million more jobs.

Similarly, in the 11 post depression recessions before President Obama, the economy recovered the lost GDP during the recession within an average of 4.5 quarters after the recession started. But it took Obama’s recovery 16 quarters, or 4 years, to reach that point. Today, 5½ years, or 22 quarters, after the recession started, the economy (real GDP) has grown only about 3% above where it was when the recession started. By sharp contrast, at this point in the Reagan recovery, the economy had boomed by about 20%, or one fifth.

In addition, middle class incomes have continued to fall during Obama’s recovery,

These are the reasons why President Obama’s recovery has been commonly characterized as the worst recovery from any recession since the Great Depression.

The problem with President Obama’s proposal is that it is just more of the same that he has already tried, with the dismal results described above. President Obama’s nearly $1 trillion 2009 so-called “stimulus” bill was supposed to finance “shovel-ready” infrastructure projects too. But it didn’t work, for a good reason. Taxing or borrowing a trillion dollars out of the private sector to spend a trillion dollars in the public sector is not going to increase jobs or economic growth overall on net. At best, it will just shift jobs from where the market directs to where the government directs. More likely, it will be a net drag on the economy, because the market spends money more productively and efficiently than the government.

But jobs and middle class prosperity are not created by government spending, which just takes more productive jobs and spending out of the private economy. In a capitalist economy, economic growth, jobs, middle class prosperity, and opportunity for the poor are created by capital investment driven by decentralized markets, which aggregate the choices and revealed preferences made by hundreds of millions of consumers and workers, to increase production of the goods and services desired by those consumers, most efficiently as driven by decentralized market competition. The effective knowledge aggregated by decentralized markets is far greater than any centralized collection of so-called experts can even conceive.

The whole speech is just an untutored, outdated paean to such central economic planning as the means to prosperity for the middle class, and opportunity for the poor. But the lesson of the whole 20th century is that decentralized free markets with productive incentives and real competition is what creates robust economic growth and prosperity.

Obama’s failure to learn that lesson is the real reason why America has suffered the worst economic recovery since the Great Depression under his economic mis-leadership. As a result of the same “thinking” displayed in Obama’s speech, every economic policy pursued by Obama has been anti-growth.

In every instance, these anti-growth economic policies have been the exact opposite of President Reagan’s pro-growth policies, which produced the greatest economic boom in world history. The dramatic contrast between the results of those policies and the results of Obama’s policies have already resolved the debate Obama is having talking to himself. As the Bible advises us, “By their fruits, ye shall know them.”

http://www.forbes.com/sites/peterfe...overy-compare-to-those-of-other-presidents/2/