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The Streams Cross: Obama’s Numbers Slip Below Reagan’s — For Good?

June 27th, 2011 · No Comments · Economics

I’ve blogged several times about the Gallup Presidential Center site, where viewers can compare the approval levels of any/all post_WW2 presidents for the same point in their presidency.

The parallels between Reagan and Obama are striking (both had to contend with really bad economies, and the resulting bad poll numbers) — yet their philosophies toward economic/growth and the role of government diverge so greatly, It’s compelling to see how the results of their policies are ultimately are graded by the electorate.

It appeared back in April that Obama’s ratings were about to dive below Reagan’s but the killing of Bin Laden provided Obama with a deserved reprieve. That reprieve has now ended:

reagan_v_obama.png

Despite this minor 4 point delta (47/43), I claim it’s likely Obama is now destined to be a permanent laggard. Given the current economic forecast, (and the Gipper’s decided and extended upward trend) my prediction is that if Obama doesn’t catch up by the end of August, he simply won’t be able to achieve Reagan-parity again. Ever.

Despite the profound demographic changes that have occurred which shift the Obama’s approval curve in it’s entirety upward, it’s not enough to compensate for the inherent economic drag created by policies that focus on collectivism vs. growth. This chart from the minneapolis fed tells the resulting tale:

recoveries.png

Arguments are made that our financial asset price bubble recession was inherently “worse” than the one in ’82 (so why the original prediction of 6.5 percent unemployment in Q2 2011? hmmmm.) This line of thought is usually stressed by those who conveniently forgot, or weren’t alive to see realtors picketing outside banks in the 1980′s. I sure didn’t see those unemployed picketers in this round.

There are valid points made that unlike Reagan, Obama did not have the same fiscal bullets available to him (largely thanks to the big government/deficit inducing policies of Bush) and I’d be remiss not to endorse that sentiment. Guns, AND butter, AND tax cuts during booms don’t leave you much to work with when the recession hits — barely a trillion dollars in “stimulus.”

Regardless the focus on non-shovel-ready entitlement spending and wholesale governmental monopoly generation (student loans, healthcare, labor unions, etc) are the path to efficiency losses, entrepreneurial demoralization and resulting economic malaise.

I’ll quote again from econ text Public Finance and Public Policy. By MIT’s Jonathan Gruber:

“Correspondingly, a large literature finds that when state-owned companies are privatized, efficiency improves dramatically, and a smaller company is required to produce the same level of output. Mueller (2003) lists 71 studies that compared the performance of state-owned companies: in only 5 of these studies did state-owned companies outperform their counterparts in terms of efficiency.”

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