Over the last 6 weeks, we've all had to endure the constant drumbeats from the ever more desperate maniacal right wing that this is Obama's recession, that the jobs numbers are indicating that businesses are closing up shop because they fear Obama's policies, and that the stock market is telling us that Obama's ideas are all losers. CNBC has turned from a business channel (?) to a right wing talking point echo chamber. Even esteemed analysts like the level headed Jim Cramer have told us that the "street" is giving a big thumbs down to the Obama presidency. Well, I think its time for a little perspective....
First of all, I'd like to point out that if there is anything we should have learned from this economic disaster it's that Wall Street is a joke. The Wall Street that thought it was a great idea to give massively bloated capitalizations to companies who leverage themselves to the hilt just to get in on the housing boom they insisted would NEVER end is the same Wall Street that is now apparently telling us that Obama's policies will fail. The Jim Cramer that had the insight to tell us on July 31, 2008 "Bye bye bear market, say hello to the bull" is the same Jim Cramer who today insists HE knows what should be done and that Obama doesn't get it. What does he use for evidence? The stock market. Of course, history tells us that in the short term, the stock market is a TERRIBLE indicater of what the future holds. Often times the market will act irrationally, especially at either extremes of optimism or pessimism. The stock market was making new high after new high right up to the crash of '29. Certainly, the stock market in the days and weeks leading up to the crash was telling us a much different story than what reality turned out to be in the ensuing years. So this whole idea of letting Wall Street's daily gyrations dictate public policy is ludicrous. Suggesting it in our current climate borders on insanity. Which brings us to the only republican president besides Lincoln that republican's will ever talk about. That's right, good ol' Ronald Reagan.
Looking at the start of Reagan's presidency, one has to wonder if the Jim Cramer was screaming bloody murder at the then HORRIBLE market reaction to Reagan's early years. The numbers aren't pretty. Reagan inherited about a 7.5% unemployment rate when he took office in Jan. '81. By Jan. '83, a full TWO YEARS into "Reaganomics" the unemployment rate had ballooned to 10.8%! How's that for a market that is rejecting a president's agenda? The stock market was giving the exact same pessimistic opinion of the Reagan presidency. By August of 1982 the S&P 500 had dropped 22% from the start of the Reagan presidency. That was a full 19 month reaction to Reagan as opposed to the 6 week reaction to Obama the nuts on CNBC want us to listen to. I'd really love to hear Hannity or Limbaugh expain this away.
There is another side to this story that would make repugs heads explode if their propaganda machine ever let them in on it. The 7.5% unemployment rate that Reagan inherited actually went DOWN TO 7.2% by July of that year. It wasn't until Reagan's huge tax cuts were enacted in his Economic Recovery Tax Act that unemployment started going up- and it went up almost EVERY month for the next year and a half following those cuts. It wasn't until Reagan started RAISING taxes in late '82 and just about every year after that that unemployment started going DOWN and the stock market started going UP. If you want to upset a repug around the water cooler, just bring up those inconvenient facts.
Unemployment Rate
Start of Reagan - 7.5%
2 Years Later - 10.8%
S&P 500
Start of Reagan - 131
19 months later - 102