CHART: Who Was A Bigger Keynesian, Obama Or Reagan?

Last week we brought you this chart, demonstrating that the unemployment rate under President Obama is coming down fairly quickly — though not as quickly as it did under President Reagan in the months before he won a landslide re-election in 1984.

Here’s a major reason why.




Data from the Bureau of Economic Analysis illustrates a key difference between Reagan’s first term and Obama’s: the pliancy of the Congresses they had to work with. Despite the fact that it was controlled by Democrats, Reagan’s Congress was ultimately accommodative, and the result was significant fiscal expansion, which likely helped bring down the unemployment rate.

Despite presiding over a Democratic Congress, Obama enjoyed no such co-operation. Serial GOP filibusters limited the extent to which he could use deficit spending and temporary tax cuts to hasten economic recovery. Republicans bucked historically bipartisan policies to thwart the president. And when they took over the House in 2011, Republicans pursued an austerity agenda, and, separately, spooked credit markets by taking the government to the brink of default. All of these factors, combined with contraction at the state and local levels, offset the stimulative policies Obama secured at the beginning of his term. And that prefigured a significantly slower labour market recovery than Reagan enjoyed.

That’s not purely a function of GOP obstructionism. Obama and Reagan pursued different policies, and Reagan’s were politically more difficult for Congress to thwart. But today’s GOP, unlike yesterday’s Democratic Party, pursued a purposeful and unprecedented strategy of blanket obstruction designed to damage the president. And these are the results.

This post originally appeared at Talking Points Memo.