Economists (not RW ones): Reagan was far more concerned about unemployment than Obama

[brentspeak]

Yves Smith of Naked Capitalism, quoting various economists and adding comments of his own:

Wednesday, June 2, 2010

http://www.nakedcapitalism.com/2010/06/why-is-washington-fiddling-with-unemployment-high.html#comments

Brad DeLong points out that Ronald Reagan was far more concerned about unemployment than Team Obama (or Washington generally) is, and also took far more aggressive measures to combat it. From http://theweek.com/bullpen/column/203544/does-washington-care-about-unemployment">The Week (hat tip reader Marshall)...

snip

And that’s before you consider that the definition of unemployed workers has been tweaked over the decades to exclude discouraged job-seekers, so that 10% ish headline unemployment today is worse than 10% ish headline unemployment in the early 1980s.

snip

But the real problem may be that all these approaches are past their sell-by dates, helpful around the margin but insufficient to provide lasting relief to our current malaise. We may be at the end of a paradigm. The US and its trade partners have engaged in a 30 year experiment of deregulation, financial liberalization, more open trade, and deep integration of markets. But most other countries had clear objectives: they wanted to protect their labor markets, which usually entailed running a trade surplus (or at least not a deficit). Many of them also had clear industrial policies. By contrast, the US pretended it was adhering to a “free markets” dogma so that whatever resulted from this experiment was virtuous. But in fact, we have had stagnant real worker wages, with a rising standard of living coming from rising household borrowings and to a much lesser degree, falling technology prices. We have also had industrial policy by default. Certain favored groups, such as Big Pharma and the sugar lobby, get special breaks.

And who has been the biggest beneficiary of our stealth industrial policy? The financial services industry. How many Treasury Secretaries have lobbied for more open financial markets with major trade partners? Has any other industry seen as extensive a reduction in regulations? And we’ve had first the Greenspan, now the Bernanke put, with the financial services well aware that the Fed will run to the rescue of the markets (ie the banksters) should any serious trouble arise, but the resulting low rates work to the detriment of savers, and push all investors to take undue risks to compensate for artificially low yields.

[Name removed]

1. Deleted message

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[countingbluecars]

2. Unrecommended n/t

[Warren Stupidity]

3. That's because the right in the early 80's still feared the left.

Now the right considers us an annoyance at worst.

[BeyondGeography]

4. That's why he kicked off his Administration by busting PATCO

:silly:

[liberal N proud]

5. I remember being unemployed for 2+ of the Reagan years

No one was concerned when I ran out of of unemployment benefits. There were no extensions of unemployment benefits as there have been this recession.

I call bull shit~

[brentspeak]

6. It's not that Reagan's policies didn't suck (they did)

But that Obama's policies are apparently not much better. Coddling Wall Street bankers at the expense of everybody else will do that.

[liberal N proud]

7. Still unrec

[brentspeak]

8. As Obama is still coddling Wall Street n/t

[dionysus]

9. you continue to hit new lows... amazing.

:rofl:

[Tarheel_Dem]

10. Unrec. (nt)

[On the Road]

11. I Understand Brad deLong's Analysis

referred to in the article, but it is a stretch to attribute that to Reagan's concern for unemployment. The recovery in the early 80s was fueled by (1) massive fiscal stimulus which were an unintended consequence of Reagan's tax cuts and (2) a surge in the money supply orchestrated by a Carter appointee, Paul Volcker.

The factor which deLong doesn't mention, but which makes the current recovery much more difficult, is federal debt levels. Reagan started out working with a debt of about a trillion dollars as opposed to the $13 T the country faces today. Reagan had a lot of room to play with, while Obama is faced with twin evils of high unemployment and spiraling debt.