Heritage on the "Reagan Recovery"

Heritage on the "Reagan Recovery"

Heritage on the "Reagan Recovery"

Weigel
Reporting on Politics and Policy.
Dec. 8 2010 2:10 PM

Heritage on the "Reagan Recovery"

This is some impressive statistical gamesmanship from Heritage's Conn Carroll.

According to The National Bureau of Economic Research , the Great Recession began in December 2007, lasted 18 months, and ended in June 2009. The last recession that lasted this long began in July 1981, lasted 16 months, and ended in November 1982... At this stage of the Reagan recovery, unemployment had fallen more than three full points, from 10.8% to 7.7%. By contrast, under the Obama recovery unemployment has actually risen almost a half a percent from 9.4% to 9.8%.

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There's no good way to gauge when a president starts to "own" the economy. This is one of the bad ways, because it separates the start dates of each president's policies from the starts of the official recessions. (The NBER measure of this is based completely on whether the economy has stopped shrinking -- in our politics, whether an economic crisis is "over" depends as much or more on job growth than GDP growth.)

So when did Obama and Reagan get chances to start implementing policies? Obama signed the stimulus into law in February 2009, proposing a budget later that month, and the government took over the auto industry in March 2009. Reagan lifted price controls in January 1981, and signed his first tax cut into law in August 1981. Let's say it took six more months for Reagan's agenda to really get implemented. Well: unemployment was 7.4 percent in August 1981 (0.1 lower than the month he took office), and it was at 10.1 percent 22 months later. Unemployment was at 8.2 percent in February 2009, and it's at 9.8 percent 22 months later. That's not a perfect comparison, but is it better than comparison between recovery from a recession that started on Reagan's watch and a recession that began long before Obama took office?

I suppose there's no good way to avoid pointing out that unemployment was higher and had risen more two years into the Reagan presidency than it has two years into Obama's.

David Weigel is a reporter for the Washington Post.