Is Obama the Economic Anti-Reagan? Reagan Faster Overall & Wage Growth; Obama Swifter Profit Growth

In 2015, Obama's former campaign manager Jim Messina said, "President Obama in many ways has helped start the same kind of political revolution that Reagan did 30 years ago."

Both presidents inherited recessions but the two leaders are markedly different in terms of fiscal policy responses. Conservative commentator Charles Krauthammer insists that Obama seeks to be the anti-Reagan.

During the first 7.5 years of their terms, as a percent of gross domestic product (GDP), Obama increased federal taxes by 3.5%, while Reagan reduced federal taxes by 2.1%. And, in terms of federal spending as a percent of GDP, Obama expanded federal outlays by 0.03%, but Reagan reduced federal spending by 10.0%. As a result of superior economic growth during the Reagan era, the federal debt as a percent of GDP expanded at a slower 17.0% pace under Reagan than the more rapid 27.8% gain under Obama.

Not only have Obama's taxing and spending policies been in sharp contrast to Reagan's, his economic outcomes have likewise been very different. After 7.5 years, Obama's economic gains exceeded Reagan's in the following areas:

1. The U.S. unemployment rate declined by 2.9 percentage points compared to 1.9 percentage points for Reagan.
Business profits, as a share of GDP, expanded by 3.7 percentage points during Obama's tenure compared to a weaker 1.9 percentage points under Reagan.

2. The U.S. stock market advanced by 133% in contrast to a weaker 100% during the Reagan era.
Metrics in which Reagan's economic performance in his first 7.5 years bested Obama were:
U.S. GDP expanded by 27.3% versus 15.3% for Obama.

3. U.S. non-farm jobs grew by 16.1% in contrast to Obama's more tepid 9.7%.
Wages as a share of GDP advanced by 2.1% during the first 7.5 years of the Reagan term, but declined by 1.8% during Obama's first 7.5 years.

Metrics in which Reagan's economic performance in his first 7.5 years bested Obama were:
1. U.S. GDP expanded by 27.3% versus 15.3% for Obama.

2. U.S. non-farm jobs grew by 16.1% in contrast to Obama's more tepid 9.7%.

3. Wages as a share of GDP advanced by 2.1% during the first 7.5 years of the Reagan term, but declined by 1.8% during Obama's first 7.5 years.

Thus, historical U.S. economic performance data support the hypothesis Obama's policies as well as economic outcomes have indeed been anti-Reagan.
Ernie Goss