Of course, the media avoid discussing these three important facts. Of course, you should know them. They help us understand where future economic policy should go. The three key U.S. economic history facts are:
1. Franklin Roosevelt reduced unemployment from day one. Unemployment peaked the year Roosevelt took over, then dropped every subsequent year except 1938 (when it rose sharply). The people loved FDR for a reason.
By contrast, the current administration has been unable to lower unemployment. It’s up from 7.4% in Bush’s last month to 9.5% today. Unemployment is down from 10.1% last October, but that’s because fewer people are looking for work. Were the labor force the same size as last year, unemployment would be 10.4%.
2. Ronald Reagan never wavered from his “cut taxes, cut spending” strategy, and triumphed for doing so. Unemployment, at 7.1% when Reagan took office, rose to 9.7% in 1982, leading to Republican House seat losses that fall. Reagan’s job approval rating fell to 37% at one point in 1982, as his inflation-fighting policies temporarily drove up unemployment. Two years later, however, unemployment was down to 7.5%, and Reagan won re-election in a landslide. Unemployment dropped to 5.5% by the end of his presidency (1988). The GDP, after rising only $32 billion in real 2005 dollars between 1980 and 1982, was up by $738 billion in 1984, a 12.6% increase in real terms. GDP rose 30.4% in real terms over Reagan’s eight years.
Reagan’s policies took time to work. But if the current administration sticks to its big government, big spending, high taxes, more handcuffs on business policies, the economy’s unlikely to recover, certainly not as it did under Reagan.
3. Democrats took over Congress in January 2007, not January 2009. Democrats did spend a forgettable two years trying to get the country ready for a Democratic president by frustrating Bush at every step. So maybe they think people will forget that when the Great Recession began in December 2007, Democrats controlled Congress. When Democrats took over in January 2007, unemployment was only 4.4%. It’s now 9.5%, an increase of 215%. The GDP in real dollars was $13.1 trillion when Democrats gained control of Congress. It’s now $13.2 trillion—no growth in four years.
Just because the media bury the Reid-Pelosi four-year economic record doesn’t mean we have to.