March 5, 2010
Poor ObamaBy Randall Hoven
What a mess he inherited. The Great Recession, Iraq, Afghanistan. No other U.S. president has ever faced such a mess. And Obama has to deal with this mess with fewer than 60% of the seats in both houses of Congress being held by his own party.
Even knowing how terrible this inherited situation would be, Barack Obama bravely announced his candidacy for the presidency almost twenty-one months before the election. And despite knowing what faced him, he raised almost three quarters of a billion dollars to pursue the office, including $43 million from lawyers and $15 million from securities and investment firms.
How bad was the mess? At the end of 2008, the real Gross Domestic Product was a whopping 2% below the peak it reached just six months before. And unemployment stood at 7.4%. Simply unsustainable.
In Iraq, U.S. fatalities numbered 314 in 2008, a 65% drop from 2007. There were 155 U.S. fatalities in Afghanistan in 2008, a 32% increase over 2007. Obama was saddled with wars in two countries, with one of them getting worse.
While this was the worst situation ever faced by a U.S. president, we can try to compare it to some previous situations.
Obama inherited an economy 2% below it previous peak. While FDR face an economy that had declined over 25% from its previous peak, the NBER declared that recession over in March 1933, almost the very day FDR was sworn in. And while Nazism, Imperial Japan, and Soviet Communism had killed tens of millions and were on the rise in Europe and Asia, the U.S. was at peace in March 1933. So FDR had it easier.
Harry Truman, by contrast, inherited a growing economy. It is true that it was a wartime economy, in a war that would kill over 400,000 Americans. But most of that happened prior to his taking over on April 12, 1945. In fact, Hitler committed suicide later that same month, and Germany would surrender unconditionally within Truman's first month as president. Japan would surrender three months later. Truman had it easier than Obama, too.
Truman's successor, Eisenhower, inherited the Korean War, a war that would kill 36,574. And Ike, like all his successors through George H. W. Bush, would face a nuclear-armed Soviet Union. But the economy was growing when Ike took over. Ike had it easier than Obama.
Nixon also inherited a growing economy. While he did inherit the Vietnam War -- a war that would kill 58,220 Americans -- the majority of those were killed before he became president. Walter Cronkite said in 1968 that the war was pretty much decided before Nixon ever took over: "It seems now more certain than ever that the bloody experience of Vietnam is to end in a stalemate." So that war was virtually over when Nixon inherited it. In addition to a nuclear-armed Soviet Union, Nixon also faced a nuclear-armed Red China led by Mao, the greatest mass murderer in human history. But we were not at war with China. So Nixon had it easier than Obama.
Ronald Reagan inherited a weak economy. But at the end of 1980, real GDP was only 0.4% below its previous peak, nothing like the monstrous 2% that Obama inherited. And unemployment in December 1980 was 7.2%, nothing like the unsustainable 7.4% Obama inherited. While Reagan inherited the Iranian Hostage Crisis, that involved only 53 Americans, nothing like the nearly 200,000 U.S. servicemen deployed to Iraq and Afghanistan in 2008 that Obama inherited. Even with the Soviet Union in Afghanistan at the time and the Cold War still on, Reagan clearly had it easier than Obama.
George W. Bush inherited both peace and prosperity. At the end of 2000, unemployment was 3.9%, and real GDP was at a peak. No more Soviet Union. No more Mao. No more Cold War. His first recession started two months after he was sworn into office. And the 9/11 attacks occurred almost eight months after. So Bush definitely had it easier than Obama, but he quickly blew the peace and prosperity he inherited from Clinton.
Obama clearly inherited a recession. And recessions are rare things. Only 33 have occurred in the U.S. since 1855. Since 1945 there have been only eleven. That means that recessions happen only about every five years. Imagine the extreme odds against a recession occurring during Obama's presidency.
And not only did Obama inherit a recession, but he inherited a steep one: Real GDP declined 3.8% from peak to trough. Real GDP shrank more in only a few OECD countries: the U.K., Germany, Italy, Japan, and the entire European area as an average. So not only did Obama have it worse than all his U.S. predecessors, but he had it worse than all but those few OECD countries.
In fact, President Obama should be credited with ending the recession he inherited. Real GDP started growing by the third quarter of 2009, only six months into his presidency. The only Republican presidents able to claim ending recessions since World War II are Eisenhower, Nixon, Ford, Reagan, George H. W. Bush, and George W. Bush.
Poor Obama. His situation could lead a weaker man to smoke and drink.
(In case you didn't already know, the above was sarcasm.)