- Jun 8, 2010
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We've all heard the argument that Reagan saved the economy when he entered office. It's one of the main reasons he's so idolized by the right these days. Meanwhile we're stuck in a recession right now, and Obama is taking a lot of heat over it, so I thought I'd see how they actually compare when it comes to unemployment.
In order to do this I will look at 3 things:
#1. What the trend was before they entered office
#2. What the situation was when they entered office
#3. How things went after they entered office
First up Reagan:
Unemployment trend in the 6 months before he entered office: Down 0.3% from Jul 1980 to Jan 1981
Unemployment rate when he entered office: 7.5% in Jan 1981
Unemployment trend in the first 18 months after he entered office: Up 2.3% from Jan 1981 to Jul 1982
Now Obama:
Unemployment trend in the 6 months before he entered office: Up 1.9% from Jul 2008 to Jan 2009
Unemployment rate when he entered office: 7.7% in Jan 2009
Unemployment trend in the first 18 months after he entered office: Up 1.8% from Jan 2009 to Jul 2010
Data from:http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS14000000
So the numbers are in, Obama inherited a higher unemployment and a much worse trend, yet he's actually done a better job over the first 18 months than Reagan did.
Lets have a look at it graphically:
As you can see the unemployment rate was actually falling a bit when Reagan took office, then about 6 months into his 1st term it started rising sharply. Obama on the other hand entered office when the unemployment rate was already exploding, but he's managed to get it stabilized over his first 18 months. So at this point the only possible conclusion if you want to compare the two is that Obama has done a better job. Of course it remains to be seen how things go beyond the 18 month mark.
The benchmarks set by Reagan are these:
Peak: 10.8% in Nov 1982 (22 months in office)
Below 8%: Feb 1984 (37 months in office)
Below 6%: Sep 1987 (80 months in office)
If Obama manages to beat those will he be getting credit for saving the economy like Reagan did ?
In order to do this I will look at 3 things:
#1. What the trend was before they entered office
#2. What the situation was when they entered office
#3. How things went after they entered office
First up Reagan:
Unemployment trend in the 6 months before he entered office: Down 0.3% from Jul 1980 to Jan 1981
Unemployment rate when he entered office: 7.5% in Jan 1981
Unemployment trend in the first 18 months after he entered office: Up 2.3% from Jan 1981 to Jul 1982
Now Obama:
Unemployment trend in the 6 months before he entered office: Up 1.9% from Jul 2008 to Jan 2009
Unemployment rate when he entered office: 7.7% in Jan 2009
Unemployment trend in the first 18 months after he entered office: Up 1.8% from Jan 2009 to Jul 2010
Data from:http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS14000000
So the numbers are in, Obama inherited a higher unemployment and a much worse trend, yet he's actually done a better job over the first 18 months than Reagan did.
Lets have a look at it graphically:

As you can see the unemployment rate was actually falling a bit when Reagan took office, then about 6 months into his 1st term it started rising sharply. Obama on the other hand entered office when the unemployment rate was already exploding, but he's managed to get it stabilized over his first 18 months. So at this point the only possible conclusion if you want to compare the two is that Obama has done a better job. Of course it remains to be seen how things go beyond the 18 month mark.
The benchmarks set by Reagan are these:
Peak: 10.8% in Nov 1982 (22 months in office)
Below 8%: Feb 1984 (37 months in office)
Below 6%: Sep 1987 (80 months in office)
If Obama manages to beat those will he be getting credit for saving the economy like Reagan did ?