Memories – Unemployment During the Reagan Years

[one...two...tree 2,762]

Among postwar administrations, who had the best record on economic growth? The answer is Kennedy-Johnson (49 percent over eight years), followed by Clinton (34 percent), followed by Reagan (32 percent). Among postwar two-term presidencies, Reagan beats out only Eisenhower (21 percent) and Nixon-Ford (24 percent). Call him the best of the Republicans, if you want.

The unemployment rate stood at 6.6 percent when Kennedy took office and at 3.4 percent when Johnson left it. The average over their eight years was 4.8 percent. When Clinton came in, unemployment was at 7.4 percent; it averaged 5.2 percent during his two terms and fell to 3.9 percent by the end. And for Reagan? Unemployment stood at 7.5 percent at his inauguration, and it averaged that same 7.5 percent during his entire eight years. The jobless rate was 5.4 percent when Reagan left office.

Inflation did come down -- from just over 10 percent in the oil crisis year of 1980 to just over 3 percent in 1983. But at whose expense? Here the correct contrast is with FDR, who controlled inflation while doubling output over four years in World War II. In the process, Roosevelt leveled the pay distribution and created the modern American middle class.

Reagan's disinflation came from unemployment over 10 percent, from his attack on unions, and from high interest rates, which drove up the dollar and cheapened imports. Those measures bankrupted much of the manufacturing belt. They damaged the middle class. And they created a vast trade imbalance and a rising external debt whose consequences haunt us still. Precisely what Roosevelt built, in other words, Reagan did much to destroy.

Mythmaking especially surrounds Reagan's economic ideas, where memory blurs reality into romance. In truth Reagan's economic team was a shotgun marriage between ideologues, monetarists and supply-siders who couldn't stand one another. There was even a good-humored (though conservative) Keynesian mixed in -- Murray Weidenbaum, the first chairman of Reagan's Council of Economic Advisors.

....

Reagan inherited about a 7.5% unemployment rate when he took office in Jan. '81. By Jan. '83, a full TWO YEARS into "Reaganomics" the unemployment rate had ballooned to 10.8%! How's that for a market that is rejecting a president's agenda? The stock market was giving the exact same pessimistic opinion of the Reagan presidency. By August of 1982 the S&P 500 had dropped 22% from the start of the Reagan presidency. That was a full 19 month reaction to Reagan as opposed to the 6 week reaction to Obama the nuts on CNBC want us to listen to. I'd really love to hear Hannity or Limbaugh expain this away.

There is another side to this story that would make repugs heads explode if their propaganda machine ever let them in on it. The 7.5% unemployment rate that Reagan inherited actually went DOWN TO 7.2% by July of that year. It wasn't until Reagan's huge tax cuts were enacted in his Economic Recovery Tax Act that unemployment started going up- and it went up almost EVERY month for the next year and a half following those cuts. It wasn't until Reagan started RAISING taxes in late '82 and just about every year after that that unemployment started going DOWN and the stock market started going UP. If you want to upset a repug around the water cooler, just bring up those inconvenient facts.

Unemployment Rate

Start of Reagan - 7.5%

2 Years Later - 10.8%

S&P 500

Start of Reagan - 131

19 months later - 102

http://angrybear.blogspot.com/2006/03/memo...-reagan_24.html

http://www.dailykos.com/story/2009/3/7/02851/87671

http://dir.salon.com/story/opinion/feature...mics/index.html

Edited March 9, 2009 by Mister Fancypants

[almaty 19]

he sent me a carton of smokes for my 8th year birthday.

bless him..*coughs*

Edited March 9, 2009 by almaty

[Saddle Bronc 124]

A joke (rather dated) about Reagan:

In 1981, at a world scientific conference, the chief scientist of each country trumpetted his country's achievement:

• The Russian stated, "we had a man named Ivanov who was dying of cirrhosis. We transplanted into him a swine's liver; he's now recovered nicely and is looking for a job"
• The Japanese stated, "we successfully transplanted a macaque's womb into a woman who had undergone a premature hysterectomy; she's had one child, and is now looking for a job which provides daycare"
• ...
• The American's response, "well we can't quite boast as much as the Japanese or Russians, or even of some of the others. However, we do have one worthy of boast; last year we transplanted an a##h##e from Sacramento to DC and everyone in the US is now looking for a job!"

[_Simpson_ 250]

The other 6 years of his presidency are not getting the TLC they deserve.

Unemployment Rate

Start of Reagan - 7.5%

End of Reagan - 5.4%

He made some big changes to how things were done and the market responded appropriately, gained its bearings and got on the right track. Change dosent happen overnight and any economist will tell you that. How long it takes they will argue about but taking into consideration where the economy was when Reagan got into office a two year turn around seems reasonable to me.

Look were the economy is now, its going to take some time for it to turn around and some quick fix solutions will not work. People want change now but its going to take some time, maybe even 2 years

[Bobby+Umit 161]

I worked for the US Navy during the Reagan years, so I was happy.

We did end the Cold War

[_Simpson_ 250]

I worked for the US Navy during the Reagan years, so I was happy.

We did end the Cold War

I was in the 6th grade when he won his second election for the presidental bid, , I was more concerned about my own little world than I was of the rest of the world. Most of what I have learned about him took place after he left office, I would be curious to hear more of your thoughts about him and his presidency, especially considering you were serving in the armed forces at the time.

[one...two...tree 2,762]

Let's not get lost on fond memories of the Reagan Era. The point being made is that the stock market took a dive and unemployment was higher under his presidency than some Republicans want to remember...as they point fingers at our newly elected President who hasn't even been in office for 60 days.

[dalegg 143]

There is another side to this story that would make repugs heads explode if their propaganda machine ever let them in on it. The 7.5% unemployment rate that Reagan inherited actually went DOWN TO 7.2% by July of that year. It wasn't until Reagan's huge tax cuts were enacted in his Economic Recovery Tax Act that unemployment started going up- and it went up almost EVERY month for the next year and a half following those cuts. It wasn't until Reagan started RAISING taxes in late '82 and just about every year after that that unemployment started going DOWN and the stock market started going UP. If you want to upset a repug around the water cooler, just bring up those inconvenient facts.

Once again- Hooray for higher taxes!!

[_Simpson_ 250]

Let's not get lost on fond memories of the Reagan Era. The point being made is that the stock market took a dive and unemployment was higher under his presidency than some Republicans want to remember...as they point fingers at our newly elected President who hasn't even been in office for 60 days.

I'm not getting lost in fond memories but rather trying to give a bigger picture of what took place.

Edited March 9, 2009 by looking_up

[_Simpson_ 250]

I dont agree with the people already pointing fingers, its too soon. I can understand why they dont like his policys but to call him a failure already is ridiculous.

Edited March 9, 2009 by looking_up

[one...two...tree 2,762]

I dont agree with the people already pointing fingers, its too soon. I can understand why they dont like his policys but to call him a failure already is ridiculous.

[one...two...tree 2,762]

Reagan arrived in Washington with a full head of steam, vowing, as he put it in the major economic speech of his 1980 campaign, "to move boldly, decisively, and quickly to control the runaway growth of federal spending." To conservatives, and many others, he seemed destined to fulfill campaign pledges to abolish entire government agencies, rein in the excesses of the welfare state, and end Americans' overreliance on government. Sensing the historical moment, Reagan echoed John F. Kennedy in famously declaring, "If not us, who? If not now, when?"

At the outset of his first term, Reagan's revolution appeared to have unstoppable momentum. His administration passed an historic tax cut based on dramatic cuts in marginal tax rates and began a massive defense buildup. To help compensate for the tax cut, his first budget called for slashing $41.4 billion from 83 federal programs, only the first round in a planned series of cuts. And Reagan himself made known his desire to eliminate the departments of Energy and Education, and to scale back what his first budget director David Stockman called the "closet socialism" of Social Security and Medicaid. But after his initial victories on tax cuts and defense, the revolution effectively stalled. Deficits started to balloon, the recession soon deepened, his party lost ground in the 1982 midterms, and thereafter Reagan never seriously tried to enact the radical domestic agenda he'd campaigned on. Rather than abolish the departments of Energy and Education, as he had promised to do if elected president, Reagan added a new cabinet-level department--one of the largest federal agencies--the Department of Veterans Affairs.

.....

This hasn't stopped recent contemporary conservative biographers from claiming otherwise. "He said he would cut the budget, and he did," declares Peggy Noonan in When Character Was King. In fact, the budget grew significantly under Reagan. All he managed to do was moderately slow its rate of growth. What's more, the number of workers on the federal payroll rose by 61,000 under Reagan. (By comparison, under Clinton, the number fell by 373,000.)

Reagan also vastly expanded one of the largest federal domestic programs, Social Security. Before becoming president, he had often openly mused, much to the alarm of his politically sensitive staff, about restructuring Social Security to allow individuals to opt out of the system--an antecedent of today's privatization plans. At the start of his administration, with Social Security teetering on the brink of insolvency, Reagan attempted to push through immediate draconian cuts to the program. But the Senate unanimously rebuked his plan, and the GOP lost 26 House seats in the 1982 midterm elections, largely as a result of this overreach.

The following year, Reagan made one of the greatest ideological about-faces in the history of the presidency, agreeing to a $165 billion bailout of Social Security. In almost every way, the bailout flew in the face of conservative ideology. It dramatically increased payroll taxes on employees and employers, brought a whole new class of recipients--new federal workers--into the system, and, for the first time, taxed Social Security benefits, and did so in the most liberal way: only those of upper-income recipients. (As an added affront to conservatives, the tax wasn't indexed to inflation, meaning that more and more people have gradually had to pay it over time.)

By expanding rather than scaling back entitlements, Reagan--and Newt Gingrich after him--demonstrated that conservatives could not and would not launch a frontal assault on Social Security, effectively conceding that these cherished New Deal programs were central features of the American polity.

http://www.washingtonmonthly.com/features/...0301.green.html

[_Simpson_ 250]

There is another side to this story that would make repugs heads explode if their propaganda machine ever let them in on it. The 7.5% unemployment rate that Reagan inherited actually went DOWN TO 7.2% by July of that year. It wasn't until Reagan's huge tax cuts were enacted in his Economic Recovery Tax Act that unemployment started going up- and it went up almost EVERY month for the next year and a half following those cuts. It wasn't until Reagan started RAISING taxes in late '82 and just about every year after that that unemployment started going DOWN and the stock market started going UP. If you want to upset a repug around the water cooler, just bring up those inconvenient facts.

Once again- Hooray for higher taxes!!

It wasnt for the rich so you might want to cut your celebration dance short. This is a lefty blog that this article came from and is misleading in some ways, like about those tax cuts you mentioned.

[sj5 4]

I dont agree with the people already pointing fingers, its too soon. I can understand why they dont like his policys but to call him a failure already is ridiculous.

I thought they said, "I hope Obama will fail." This is future.

Edited March 9, 2009 by sj5

[_Simpson_ 250]

I dont agree with the people already pointing fingers, its too soon. I can understand why they dont like his policys but to call him a failure already is ridiculous.

I thought they said, "I hope Obama will fail." This is future.