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Monday

5

November 2012

If Obama Beat Hoover, So What?

Written by , Posted in Big Government, Economics & the Economy

You know your record as President is abysmal when supporters are reduced to touting how much better you’ve done than Herbert Hoover. But that’s where Obama is at, apparently, as historian Robert McElvaine took to the New York Times a few days ago to make exactly that case. Seeking to combat unfavorable comparisons to the pace of recovery under Obama with that of other Presidents, such as Reagan or Clinton, McElvaine dismissed them all us irrelevant and asserted that the only comparison that matters is between Obama and Hoover. And on that measure, we are told that Obama passes with flying colors!

He makes two points that I dispute: 1) That the only meaningful comparison for the recession that preceded Obama’s tenure is the crash that lead to the Great Depression, and 2) That the comparison proves Obama has done a good job on the economy. Neither is true.

McElvaine asserts that, “the most appropriate presidential term to use as a benchmark is Herbert Hoover’s. He was the last president to face an economic crisis on a scale similar to the one that confronted Obama when he took office.” But while he makes a case for comparing the two, he doesn’t explain what makes the other comparisons less valid. In particular, there is a lot that can be learned by comparing the current recovery, such that it is, to that seen under Reagan, because a case can equally be made that the early 80′s recession was as bad or worse than 2008-2009.

Both the 2008 and early 80′s recession were financially caused. Unemployment was also similar when each president took office,  at 7.5% under Reagan versus 7.8% under Obama, though joblessness peaked higher in 1982 than 2009, and Reagan had the added challenge of dealing with double digit inflation. Yet despite this Reagan did a much better job turning things around, and the economy grew an average of 5.6 percent for the first three years following the bottom of the recession he inherited, versus only 2.2 percent growth under Obama in the same time frame.

The similarity between these recessions makes the comparison valid.

But even if we accept the Hoover comparison as decisive, it doesn’t prove what McElvaine suggests. No where in his argument does he point to specific policy choices and explain how they produced the results he highlights. Sure, he mentions the stimulus bill, but doesn’t provide any actual evidence that it helped. It didn’t, as explained in this video. In other words, his argument fails to account for the very plausible explanation that Obama was merely less bad than Hoover. That Obama’s policies might not have done quite as much damage as Hoover, another big spending government interventionist, does not suggest he should be praised, merely that we could have done worse, if ever so slightly. But surely we can still do better.