Posts Tagged ‘supply side’
As we edge into Obama’s third year of his administration it’s important to draw some parallels to another trans formative President and compare some policies and outcomes. Both Reagan and Obama inherited an economy in trouble. Reagan inherited a Democratic administration mess signified with high unemployment, high interest rates and high inflation. Obama inherited a complete melt down of the financial and housing markets which sparked a massive shedding of jobs by the private sector.
How both men approached the solution shows their ideologies and their willingness to risk it all to prove their points. Both administrations came in with a roar and lost major political ground in the mid term elections just two years into their presidencies. That’s were the similarities stop.
Reagan moved quickly to reduce federal spending on run away programs, federal spending on non-defense sectors. Obama primed the government spending pump by spending on government. The ballooning of the bureaucracy is growing to epic proportions. An alarming stat from the WSJ:
Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.
It gets worse. More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers.
Reagan runs up the deficit spending credit card to build up the military which eventually ended the Cold War. Obama talks about restoring our decaying infrastructure and resurrecting the Conservation Corp of the Great Depression era and ended up squandering $787 billion on bridges to no where, high speed rail systems that are getting shot down by governors in states that aren’t buying into the pork. Under Obama we saw ‘Cash For Clunkers’, ‘Cash for Cualkers’. The Coburn-McCain report slammed the wasteful stimulus package for juicy nuggets like:
The Wake Forest University Baptist Medical Center was awarded $71,623 to study what the report calls, “Monkeys Getting High for Science.”
Bonnie Davis, a spokeswoman for The Wake Forest University Baptist Medical Center, said the “small grant has helped protect very important research that will have significant impact on public health in regards to cocaine addiction and the issue of relapse.”
Go a little further down the list and you’ll find even bigger spending. The California Academy of Sciences is receiving nearly $1 million in stimulus funds to send researchers to the Southwest Indian Ocean Islands and East Africa to capture, photograph and analyze thousands of exotic ants.Chip Somodevilla/Getty Images
There’s also funding for yoga and hot flashes. Researchers at Wake Forest University have received nearly $300,000 to study whether integral yoga “can be an effective method to reduce the frequency and/or severity of hot flashes” in breast cancer survivors.
Reagan reduced regulations which told the business community that the American market was going to welcome their entreprenurial spirit and encourage them to get back to work. Obama on the other hand flirted with Cap and Trade and used the long arm of the EPA to mandate coal fired energy production and attempt to move the country towards solar and other inefficient alternative energy sources.
As if our brief history lessons and comparisons aren’t example enough of how incredibly off the Obama administration’s policies are, let’s take a look at the United States health care industry. Health care makes up 20% of the US economy and it’s just received a major governmental partner in virtually every aspect of it’s delivery, billing, R&D and administration. Health care reform is the holy grail of Progressive politics. Clinton tried and ultimately failed to get a health care overhaul bid through the legislative process. Obama learned two valuable lessons from Bill, don’t let Hilary anywhere near the process and move quick while your political capital is at it’s peak.
Even with super majorities in Congress what came out of the Potomac meat grinder was a health care bill that was loaded with new bureaucracies, new government oversights and new hurdles to jump through. The ‘bending of the cost curve’ discussion was thrown out the window and replaced with ‘we are from the government and here to help’. Why would we be skeptic of a Federal take over of 20% of our economy? Look no further than the US Postal Service for your answer.
Liberal media wrong about economy.
By Edwin Feulner – The Southeat Missourian
…..For better or for worse, more than two an one half years into the Reagan administration, the nations economic policies – while still a hodgepodge, confusing, and in some cases counterproductive are generally modeled along the lines Ronald Reagan proposed as a presidential candidate. Taxes have been reduced; government spending increases have been slowed; the regulatory burden has been eased somewhat. The mix would be far different in an ideal world; but Washington is far from that.
In other words, whether Sam Donaldson of ABC-TV or Horbart Rowen of the Washington Post like it or not, the economic program is more similar than dissimilar to what we called Reaganomics three years ago.
If its working, it’s Reaganomics we can credit; if it’s failing, Reaganomics gets the blame.
Is the program working:……
- Sales of domestic autos were at a 7.2 million rat in July, up by more than 40% over the 5.1 million rate of June 1982.
- More than 74% of manufacturing, mining and utilities capacity was in use in June, up seven percent from November, when the recession was at its worse.
- The University of Michigan index of consumer confidence soared to 93% in May-June, it’s highest level in 10 years. People are optimistic about their current and future economic situation and about the prospects for the economy as a whole.
- Consumer spending, adjusted for inflation, surged 10% annual rate during the second quarter – the largest quarterly increase in two decades.
- The civilian unemployment rate fell to 9.5% in July and August from a high of 10.8% last December – falling a full one-half percent in July alone. New claims for unemployment insurance, moreover, were down to 388,000 during the first four weeks of July. Lowest since July 1979.
- New housing starts were at a 1.7 million unit annual rate in June, up 92% from a year earlier.
Much to the dismay of the gloom and doomers, inflation remains firmly in control. Interest rates are well below earlier peaks, as well.
The bottom line is that economic recovery is gaining momentum. Real GNP grew at an annual rate of 8.7% in the second quarter – far higher than forecast, and three times greater than 2.6% rate in the first quarter.
The limousine liberals in the news media have willed failure on the Reagan economic program from the beginning. The only thing that has failed, however, is their creditability.
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