A REMINDER ABOUT ‘REAGANOMICS’…. The conservative Washington Times ran a column yesterday insisting that Reagan’s economic policies succeeded where Obama’s have not. Cato’s Dan Mitchell, ostensibly an expert in tax policy, found the comparison compelling.
“Both Ronald Reagan and Barack Obama entered office during periods of economic misery,” Mitchell said. “But they adopted dramatically different solutions. Reagan reduced the burden of government and Obama increased the burden of government… As you can see, Reaganomics is much better than Obamanomics.” Mitchell added that this is a “slam-dunk comparison.”
This seems pretty silly, for more than a few reasons. Ezra Klein noted, for example, that it’s misguided to compare the downturn of the early 1980s and the global financial crisis in recent years. “If you want to compare Reagan to someone, you should look at Clinton, who also entered office amidst a traditional recession. But Reagan doesn’t look too good in that match-up,” Ezra added.
Paul Krugman noted that the GOP argument itself is a reminder why he “can’t maintain the pretense that we’re having any kind of intelligent, or remotely honest, discussion” with conservatives.
I agree with all of this, but wanted to add something. Krugman posted this chart several months ago, and it continues to seem relevant to the discussion. Reagan’s first big tax cut was signed in August 1981. Over the next year or so, unemployment went from just over 7% to just under 11%. In September 1982, Reagan raised taxes, and unemployment fell soon after.
We’re all aware, of course, of the correlation/causation dynamic, but as Krugman noted in January, “[U]nemployment, which had been stable until Reagan cut taxes, soared during the 15 months that followed the tax cut; it didn’t start falling until Reagan backtracked and raised taxes.”
John Boehner wasn’t in Congress at the time, but as Reagan’s post-tax-cut unemployment rate soared to nearly 11%, I wonder whether the Orange One would have been on television every day asking, “Where. Are. The. Jobs?”
The right is convinced that Obama’s recovery efforts didn’t work, and as proof, they point to the unemployment numbers a year and a half after the policy became law. But if that’s the appropriate measure, wouldn’t Republicans also have to believe that Reagan’s 1981 tax-cut package also failed, since unemployment went even higher the year after it passed?