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 it 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 Delano Roosevelt
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.
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 “trickel 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 Hussein Obama
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.
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