3 Ronald Reagan Charts That Will Blow The Minds Of Republicans (And Democrats)

As we examine how the economy will affect Obama’s chances of getting re-elected, we’ve been going back through the first terms of other Presidents to see how things went.

Over the weekend, we looked at what the economy did under George H.W. Bush, and we found that things were mostly pretty good, with the exception of unemployment, which trended higher even after the recession ended. Most likely, that’s what killed him in the 1992 election.

But if you want your mind blown, check out Reagan’s first term.

First, check out this chart of effective corporate tax rates from 1981-1985.

There’s no pure way to chart this on FRED, but you can hack it out by taking Federal Government Corporate Tax Receipts and dividing that into Federal Government Corporate Tax Receipts + Corporate Profits after tax. (Thanks to @jesse_livermore for pointing this one out).

As you can see, the first Reagan term saw a surge in the effective corporate tax rate.


[credit provider=”FRED” url=”http://research.stlouisfed.org//fred2/graph/?g=8DP”]

This spike is pretty remarkable if you extend the chart back, and see that effective corporate tax rates had been falling quite severely in the decade prior to Reagan’s Presidency.


[credit provider=”FRED” url=”http://research.stlouisfed.org//fred2/graph/?g=8DV”]

So yes, the first Reagan term was characterised by a reversing of the downward trend in what companies were paying in taxes.

The next chart you might be more familiar with. It shows the history of Federal Government Deficits.

You can see that starting in in 1981, they really boomed like nothing comparable in history.


[credit provider=”FRED” url=”http://research.stlouisfed.org/fred2/graph/?g=8DY”]

Finally, and this chart is the reason that liberals should love Ronald Reagan.

It shows worker salaries divided by total corporate profits…  a decent proxy for who’s winning the battle at any given time: labour or capital. (HT to @conorsen for this one).

When the line is going up, it means that labour salaries are gaining relative to corporate profits.

labour did GREAT after Reagan came into office. And Capital suffered.


[credit provider=”FRED” url=”http://research.stlouisfed.org/fred2/graph/?g=8E0″]

This chart is impressive, but what’s REALLY impressive is if you zoom out.

The Reagan labour boom really broke a historical streak, and lasted basically through both of his terms.


[credit provider=”FRED” url=”http://research.stlouisfed.org/fred2/graph/?g=8E2″]

So the bottom line is this:

  • Corporate taxes went up under Reagan.
  • The deficit boomed under Reagan.
  • labour did better than capital under Reagan.

Conservative hero?