In 1981, Ronald Reagan had to deal with a fairly sharp, intense recession, with some fairly intense “negative growth”:
1981 Q04: -4.5895
1982 Q01: -6.5220
1982 Q02: 2.1923
1982 Q03: -1.4300
For those of you who weren’t around back then? It was a nasty little downturn, especially coming on the heels of the sluggish, stagflation-addled seventies.
1982 Q04: 0.3890
1983 Q01: 5.3465
1983 Q02: 9.4443
1983 Q03: 8.0625
1983 Q04: 8.5095
1984 Q01: 8.1868
1984 Q02: 7.2118
Long before he started stretching the Constitution out of shape, Obama broke one other, less formal rule – really more of a truism: as a very broad rule, sharp recessions, left on their own, tend to have sharp recoveries. Reagan’s recession was a sharp, intense one, accompanied by the worst unemployment since the Great Depression (only tied in late 2009 by Obama’s recession).
And Reagan got out of the way, and let the market heal the economy (except of course the defense sector – but then, that’s never part of the “free market”) heal itself.
And it came roaring back much bigger and better than ever.
Obama, of course, took office in the midst of another sharp, intense downturn.
And six years later, he’s doing the end-zone happy dance as he claims a 5% growth in GDP.
Now, let’s presume for a moment that that 5% “growth rate” is organic (although it most assuredly is not).
It’s six years into a sharp recession. Left to its own devices – without “Quantitative Easing”, without “Too Big To Fail” and skyrocketing energy prices, without Obamacare – we should have been seeing much better growth than this…
…in 2010 or 2011.
But during the Obama Recession, like the Great Depression, the economy was left to pretty much the opposite of “its own devices”.
There were plenty of bad things during the Carter years…the hostages, inflation, disco,etc. But three things that were not problems are GDP growth, the budget deficit, and unemployment.
If you want to blame Carter for the first couple of years under Reagan, then you should also give Carter credit for appointing Paul Volcker to the Fed because it was Volcker who tamed inflation.
And you might as well give Carter credit for the Force Mod build-up in DoD. It was under Carter that DoD did the R&D and production phase for most of the new weapon systems, such as: the Abrams Tank, Bradley, Blackhawk, Apache, Patriot, MLRS, Pershing II, Nimitz class carriers, Trident, F-16, B1, MARV’d warheads, etc. All of those were systems that Reagan inherited just as they were coming into full deployment…that is, right after all of the heavy lifting was done under Ford and Carter.