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The Obama Economy: Still Not Recovered

By contrast, per capita GDP under Reagan took a mere three quarters to get back to its pre-downturn peak, and was almost 12 percent higher 13 quarters after that recession's end:


The chart shows why Reagan was able to ask Americans in 1984 if they were better off than they were at the beginning of his term. He already knew the answer; per capita GDP and real income were already far ahead of their pre-recession peaks by that summer. Under Obama, both statistics still trail.

Those who argue that the most recent recession was much steeper than the Reagan-era downturn totally miss the point in two ways. Most obviously, though the per capita GDP drop of 6 percent during the most recent recession is greater than the 4 percent drop during 1981-1982, the chart above shows that the explosive Reagan recovery would only have required a couple more quarters to make up that difference. A less obvious but more important point is that the Reagan downturn wasn't as steep because the Kemp-Roth supply-side tax cuts which first took meaningful effect in 1982 cushioned the recession's impact in arguably tougher circumstances, which included 13 percent inflation and interest rates topping 20 percent.

Despite Obama's historic underperformance, Buffett continues to support Obama. That shouldn't be a surprise, given how much one of his companies has benefitted from the Keystone pipeline's continued delay. Covering his tracks, Buffett announced his support for the pipeline in May. By that time, his opinion didn't matter, but I guess his public perception did.

Thanks to four years of out-of-control spending and industry-stifling top-down control, the worst economic stewardship by a presidential administration since Franklin Delano Roosevelt lengthened the Great Depression by implementing eight years of out-of-control spending and industry-stifling top-down control continues. The misery won't stop if Barack Obama wins reelection. The Wall Street Journal reviewed the president's "Plan for Jobs and Middle-Class Security" and pronounced it Obama's "Second First Term."

We won't even be that lucky if Obama wins a second term. We really don't want to see what he and his minions would do once he and they are unencumbered by the need to face reelection.

(Thumbnail image on PJM homepage by Shutterstock.com.)