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Tuesday, June 18, 2019

ANALYSIS/OPINION:

Democrats still have no idea why Donald Trump won the 2016 election. It wasn’t that the American people had suddenly turned racist, which is the braindead theme of the Democratic media.

Even though President Obama, the Democrats and their press thought Mr. Obama saved America from another Depression, blue-collar, working-class voters didn’t see it that way. They saw the 10 years from 2007 to Election Day 2016, as the Depression — for them.


Milton Friedman was the first to notice that the American record is “the worse the recession, the stronger the recovery.” After a recession’s downturn, the economy needs to grow faster than normal to catch up where the economy would have been without the recession.

Annual real growth for the American economy has been 4 percent on average, which means that the economy must grow more than 4 percent for several years after a recession until it catches up to where it would have been without the recession. That is what happened under President Reagan. His recovery grew at a real rate of 6 percent — or more — in 1984, when the recovery from the woeful 1970s blossomed, growing for 25 years, from late 1982 to late 2007.

The recession of 2007 to 2009 was such a dramatic collapse that all Mr. Obama had to do was stay out of the way to enjoy an economic boom that might have put him on Mount Rushmore. But instead Mr. Obama did everything the opposite of Mr. Reagan, getting the opposite results.

Instead of cutting tax rates, Mr. Obama raised the rates of virtually every federal tax, except corporate tax rates, which had already become the highest in the industrialized world. Instead of deregulating, Mr. Obama became the regulation president, with Obamacare, Dodd-Frank and draconian regulation of energy under his global warming delusion.

Instead of cutting spending, as Mr. Reagan did for domestic spending, Mr. Obama dredged up proven failed Keynesian economics, which Mr. Reagan left for dead in 1981. That is why Mr. Obama brought back soaring “stimulus” spending, all-time-record federal deficits and more federal debt than all prior presidents combined, from George Washington to George Bush.

So Mr. Obama got the opposite results from Mr. Reagan. Instead of a booming economic recovery that continued for 25 years, America suffered under Mr. Obama the worst economic recovery from a recession since the Great Depression, in terms of economic growth, unemployment, wage and income growth, poverty, even inequality. Mr. Obama thought he was helping Hillary when he said at the Democratic convention in 2016 that the only way to get a third term of Obama was to vote for Hillary, who had pledged to continue Mr. Obama’s anti-growth economic policies.

But blue-collar, working-class voters effectively responded on Election Day with “Hell No We Won’t Go” in the words of Vietnam War protesters from the 1960s. From Pennsylvania, to West Virginia, to Ohio, Indiana, Michigan, Wisconsin, Iowa and Missouri, we saw the equivalent of the Great Realignment of working people from the Democrat Party to the Republican Party. That began with Nixon, accelerated under Reagan and will be completed by Donald Trump in a landslide re-election in 2020, if we reach out to working people, especially small, family and community business employees, training them in what is in their best interest, and getting them involved.

Before Mr. Obama, in the 11 previous recessions since the Great Depression, the economy recovered all the jobs lost during the recession in 27 months, just over two years, after the prior cyclical peak (when the recession began). But in President Obama’s recovery, the job losses from the 2008-09 recession were not recovered for more than six years (76 months). That included the longest period of unemployment at 9 percent or above since the Depression, 30 months, April 2009 to September 2011, almost all of Mr. Obama’s first term.

Mr. Reagan suffered the recession of 1981-82, previously the worst recession since the Depression, which broke the back of the double-digit inflation of the 1970s. All the job losses from that recession were recovered in 35 months. After 76 months, Mr. Reagan’s recovery had created 12.8 million jobs. After 76 months, Mr. Obama’s recovery had created zero net jobs, merely recovering the jobs lost during the recession over those 6 years.

In the 11 previous post-Depression recessions before Mr. Obama, the economy recovered the GDP lost during the recession within an average of 4.6 quarters, just over a year. But the Obama recovery took 14 quarters, 3 years, to recover the lost GDP. Mr. Reagan’s recovery took half that time, seven quarters, to recover the lost GDP from the 1981-82 recession. Mr. Obama’s recovery took so long to recover the lost GDP because over Mr. Obama’s two terms, real economic growth was less than 2 percent.

Mr. Obama tried to say his recovery was so bad because the recession was so bad. He should study Milton Friedman.

• Lewis K. Uhler is founder and chairman of the National Tax Limitation Committee and Foundation. Peter J. Ferrara is a senior policy adviser for the Foundation and teaches economics at Kings College in New York.


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