Why Barack Obama Shouldn’t Withdraw

The economy is in terrible shape, but unemployment is still lower than it was during a comparable point in Ronald Reagan’s first term, a year before “morning in America.”

Barack Obama Tim Geithner

 

The Tribune’s Steve Chapman is getting a lot of attention for his column “Why Obama Should Withdraw.” Basically, he says he shouldn’t run in 2012, for the obvious economic reasons. Chapman begins:

When Ronald Reagan ran for re-election in 1984, his slogan was “Morning in America.” For Barack Obama, it’s more like midnight in a coal mine.

It’s funny that Chapman should mention Reagan and “Morning in America.” Because two things are true about mornings: they come after a long period of darkness, and most people hate mornings. At least for people like me, the only benefit to the morning is the day that follows. Which is a truism that lines up perfectly with Reagan’s re-election campaign and “Morning in America.”

1983 was not a good morning.

Here’s a graph of the unemployment rate during the first three years of Ronald Reagan’s first term:

Ronald Reagan unemployment rate

And while the Bureau of Labor Statistics’ broad U-6 measure of unemployment didn’t exist, UBS economists have calculated that it was likely worse in the 1980s recession:

By that measure, the unemployment rate hit 13% in June. That’s more than double what it was in December 2007 when the recession began, but not as high as the 14.3% it hit in 1982. While there’s no way to be sure, that suggests that the revamped U-6 the Labor Department currently uses probably also would have been higher at its peak in the early 1980s than it is now.

Meanwhile, here’s the unemployment rate during Obama’s presidency up through now:

Obama unemployment rate

It’s a lower peak, but a slower recovery.

Conveniently enough, the unemployment rate tracks with the popularity of each president in their first term. Here’s Reagan, via the American Presidency Project:

Ronald Reagan first term popularity

Reagan’s popularity was exceedingly low in early 1983, but like the unemployment rate, it recovered quickly. And Obama:

Barack Obama approval ratings

He hasn’t hit Reagan’s depths, but the trend is obviously worse at this point in his presidency, having gotten a few readings in the high 30s in mid-late 2011. Obviously, he’s behind Reagan’s pace and going the wrong way.

And as a side note, people were also just pretty unhappy with everything in 1983, but their attitude improved along with the unemployment rate and Reagan’s approval rating. Here are the results of Gallup polls from “The Confidence Gap During the Reagan Years, 1981-1987” (PDF) by Seymour Martin Lipset and William Schenider:

1980s recession feelings toward nation

Again: high dissatisfaction, but trending down. Reagan managed to pass the magic pivot point in early 1984, and went on to beat Walter Mondale like a rented mule.

In August 1983, a year and two months out from the 1984 election, unemployment was at 9.5 percent. It was 9.1 percent in August 2011.

None of which is to suggest that the Obama administration, or the American people, should be confident in a rapid recovery like that of Reagan’s first term. The Fed doesn’t have many arrows left in its quiver. Both companies and households are hoarding cash as if for winter (“When households are shedding debt, making debt cheaper does basically nothing“). Global growth is flat. Confidence in Obama is not particularly high, either because, to put it nicely

Indeed, Obama himself nails it, telling Suskind that he was too inclined to search for “the perfect technical answer” to the myriad of complex issues coming at him. What he’d end up with instead is, as Suskind astutely summarizes it, “clever” answers that were “respectfully acknowledging opponents’ positions, even those with thin evidence behind them, that then get stitched together into some pragmatic conclusion — but hollow.”

… or less so:

If he believes that the upper 5 percent has way too much income and wealth – which, frankly, I agree with – then he should have dug in his heels and said, “I am not going to sign a bill to extend the tax cuts for the top tax bracket.” What did he do? He folded like a lawn chair within two days. So I don’t think there’s any comparison at all.

That’s former Reagan budget director David Stockman comparing Obama to his old boss; Stockman’s own trip through the DC fiscal thresher was documented in William Greider’s article “The Education of David Stockman,” which goes a long way towards explaining why the Reagan administration was never able to get the budget cuts it wanted to offset its deficit spending, and why that basically never happens.

Obama also faces a recalcitrant Congress, making it unlikely that the “new” (?) Obama will get traction on his more-ambitious-than-expected jobs bill.

But even with all the evidence that Obama won’t have enough economic momentum going into 2012, the idea that a sitting president would write off re-election—when unemployment is lower than it was during the same point in Reagan’s tenure—seems less like like a thought experiment than a thought bubble.

 

Photograph: The White House

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