Some Numbers

Well, the demagogue from Michigan held me personally responsible for causing 10.1 percent of our work force to be unemployed. But 7.4 percent of them were unemployed when we got here. By my figures, we're only responsible for 2.7 percent.

-- Ronald Reagan, October 14, 1982

It's October. A first-term president warily stares down the approaching midterm elections, cognizant of the fact that his party is heading for losses. The unemployment rate is persistently high and the economy is in poor shape. The year, of course, is 1982.

Some folks feel the need to suggest that Obama's economic performance, particularly when it comes to the unemployment rate, doesn't compare favorably to Reagan's. Yet at this point in his presidency, Reagan was facing a 10.4% unemployment rate. And it was rising, on its way to hitting 10.8% in November and December of 1982. The month he took office it had been 7.5%.

By comparison, when Obama took office the unemployment rate was already higher, 7.7%. But last month and the month before that it hovered at 9.6%. If we use Reagan's logic from the opening quote, that means Obama "owns" a 1.9% increase in the unemployment rate. Not too bad, considering.

But this misses the real story. Just looking at the instantaneous unemployment rate when Reagan or Obama walked into office--7.5 and 7.7 percent respectively--doesn't give us an idea of the magnitude of the problem. What we really need to consider here is the derivative: how fast was unemployment changing?

And while this fact seems to have been rather quickly forgotten, the economy really was in free fall 21 months ago; we were hemorrhaging jobs at an alarming rate. Take it from this February 2009 CNN article:

The latest job loss is the worst since December 1974, and brings job losses to 1.8 million in just the last three months, or half of the 3.6 million jobs that have been lost since the beginning of 2008.

The loss since November is the biggest 3-month drop since immediately after the end of World War II, when the defense industry was shutting down for conversion to civilian production.

Got that? We hadn't lost so many jobs that quickly for a sustained period of time since we demobilized the war machine after V-E and V-J day. Let that sink in for a second.

You can see the monthly unemployment rates going all the way back to Truman here. Since it often helps to make a point visually, I stuck some numbers into an Excel chart: the unemployment rates under Obama and Reagan in their first two years in office. However, to give that perspective on how that rate was changing when they showed up, I've also included the numbers for the 12 months before they came into office (i.e. 1980 for Reagan and 2008 for Obama). Go ahead, click it.



You can see that for Reagan the unemployment rate was mostly hovering around that mid-7% range when he took office, whereas for Obama the unemployment rate was riding a rocket to the moon. But not too long after Obama's Hundred Days ended the unemployment rate began to level out and eventually came down a bit. Today it hovers in the mid-9% range. This understates the pain, as that number doesn't tell us how many people have gotten discouraged and given up looking for work or who are stuck working part-time when they really want to be working full-time. But it certainly beats an unemployment rate of 14% or 18%.

I don't mean to suggest the current situation is acceptable; it isn't. Obviously that unemployment rate needs to come down. But it helps to stop once in a while and remember that things were downright terrifying at the start of 2009 and at the time the possibility of Great Depression II didn't seem all that remote. And despite the vast differences between the economic situation today and that of the early 1980s, remember that the unemployment rate right now is a full 0.8 points lower than it was in October 1982 and, as far as I can tell, it's not on its way up. So based only on the first two years of their first terms, I'd have to say Obama outperformed Reagan, getting a (comparatively) better outcome despite facing a decidedly worse situation.