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Jewish World Review June 30, 2011 / 28 Sivan, 5771 Economy: Reagan Gets No Credit, Obama Gets No Blame By Larry Elder http://www.JewishWorldReview.com | Ronald Reagan did nothing. Barack Obama saved the nation from total collapse. How else to explain the absence of jobless pitchfork-wielding Americans storming the White House? How else to explain the contrast between the explosive Reagan Recovery and the dud on our hands right now? Fortunately, the left is up to the task. "The secret of the long climb after 1982 was the economic plunge that preceded it. By the end of 1982 the U.S. economy was deeply depressed, with the worst unemployment rate since the Great Depression. So there was plenty of room to grow before the economy returned to anything like full employment," said left-wing economist, Nobel laureate and New York Times columnist Paul Krugman in 2004. Oh. An economy that is "deeply depressed," Krugman insists, or at least he did seven years ago, naturally comes back strong. To what principal factor did Krugman point to in calling the 1982 economy "deeply depressed"? Unemployment. It peaked in the early '80s at 10.8 percent, even higher than during "The Great Recession" (aka the economy "inherited" by President Barack Obama). In 2010, the unemployment rate hit 10.2 percent, which means the early '80s still holds the record for the "worst unemployment rate since the Great Depression." What most people care about are jobs. By that standard, Reagan faced an even tougher economy. Throw in a higher rate of inflation — 1980's 13.5 percent average vs. 2011's 2.6 percent — and much higher prime interest rates — 20 percent vs. 3.25 percent — and the early '80s looked even grimmer than The Great Recession. Krugman gives no credit to the Reagan policies of lower taxes, deregulation and a slowdown in the rate of government spending. He believes Reagan's policies harmed the economy. Krugman approvingly quotes Bill Clinton, who, as a presidential candidate, said: "The Reagan-Bush years have exalted private gain over public obligation, special interests over the common good, wealth and fame over work and family. The 1980s ushered in a Gilded Age of greed and selfishness, of irresponsibility and excess, and of neglect." Enter President Barack "Hope and Change" Obama, with a Democratic majority in the House and a supermajority filibuster-proof Senate. Out went policies like reductions in income taxes, corporate taxes, capital gains and dividends. In came transfers of money from one pocket to another to "spread the wealth." Under ObamaCare, the Democrats placed the entire health care system under the command and control of the federal government. Through a nearly $1 trillion "stimulus" package, Democrats spent money on "shovel-ready" projects with a promise to "save or create" 3.5 million jobs. To rein in "greed" and to fight "climate change," the Obama administration imposed billions of dollars' worth of new regulations on businesses. Through "quantitative easing," the Federal Reserve effectively printed money to keep interest rates low, a widely disputed policy designed to encourage banks to lend and businesses to borrow. So where is it? When do we see the massive bounce-back from this "deeply depressed" economy, at minimum the kind of bounce-back that occurred in the '80s in spite of the allegedly harmful policies of Reagan? Krugman's analysis of the Reagan recovery — a deep recession equals sharp recovery — tells us that the economy should be storming ahead, especially given Obama's enlightened leadership. But in the seven quarters following the end of this recession, gross domestic product growth has averaged 2.8 percent. In the seven quarters following the Reagan recession, GDP growth averaged 7.1 percent. Forecasters are now lowering expectations for economic growth. Ominously, "core inflation," which excludes "volatile" categories of food and fuel, is up. Unemployment, after dipping below 9 percent, is now back to 9.1 percent. So how does the left explain this? "This was a financial (emphasis added) crisis," explains Robert Shapiro, a Clinton administration economist, "and these take longer to recover from." Does this explain why last spring the Obama administration confidently predicted a "Recovery Summer"? Does this explain why the Obama economic team predicted that the 2009 passage of "stimulus" would prevent unemployment, then at 7 percent, from reaching 8 percent? Krugman, of course, in refusing to credit Reagan policies for the Reagan Recovery, made no distinction between a "financial" and a regular old crisis. It's flat-out tough to explain how anti-Reagan policies are supposed to produce Reagan-like growth. Here's the real explanation. The top priority of the left isn't "jobs, jobs, jobs." Andy Stern, the former head of the Service Employees International Union and hero to the left, makes this clear: "Western Europe, as much as we used to make fun of it, has made different trade-offs which may have ended with a little more unemployment but a lot more equality." The goal of the leftist is social justice — using government to close the gap between the have and the have-nots, to secure the "right" to health care. Obama's policies are therefore an acceptable trade-off even though they kill jobs — as long as it's somebody else's job that gets killed. Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. JWR contributor Larry Elder is the author of, most recently, "Stupid Black Men: How to Play the Race Card--and Lose." (Proceeds from sales help fund JWR) Let him know what you think of his column by clicking here. Larry Elder Archives © 2006, Creators Syndicate

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