Forbes asks Economically, Could Obama Be America’s Best President?
Interview with Bob Deitrick, co-Author “Bulls, Bears and the Ballot Box” (BBBB):
Q- Bob, how much credit should Americans give President Obama for today’s improved equity values?
BBBB – Our research reviewed American economic performance since President Roosevelt installed the first Federal Reserve Board Chairman – Republican Marriner Eccles. We observed that even though there are multiple impacts on the economy, it was clear that policy decisions within each administration, from FDR forward, made a clear difference on performance. And relatively quickly.
Presidents universally take credit when the economy does well (such as Reagan,) and choose to blame other factors when the economy does poorly (such as Carter.) But there was a clear pattern, and link, between policy and financial market performance.
Although we hear almost no one in the Obama administration taking credit for record index highs, they should. Because the President deserves attention for how well this economy has done during his leadership.
The auto rescue plan has worked. American car manufacturers are still dominant and employing millions directly and in supplier companies. Wall Street reform has been painful but it has re-instated faith amongst investors. The markets are far more predictable than they were four years ago, as VIX numbers demonstrate greater faith and less risk.
Even for small investors, such as those limited to their 401(k) or IRA investments, the average annual compound return on stocks under President Obama has been more than 24% since the lows of March, 2009. This is a better result than either Clinton, Reagan or FDR – who were the prior winners in our book.
So how did Republican hero Ronald Reagan rank?
Few people think of Reagan as a stimulus addict. Yet, his administration’s military build-up added $1trillion of stimulus to the national debt ($2.3trillion adjusted for inflation) – the opposite of what is happening during the Obama years. Many like to think that it was tax cutting which grew the economy, but undoubtedly we now know that this dramatic defense and infrastructure (highways, etc.) stimulus had more to do with igniting economic growth. Reagan’s spending looked far more like FDR than conservative Herbert Hoover!
Ronald Reagan tripled the national debt during his tenure, creating what today’s Congressional austerity advocates might have called “a legacy of unpayable debt for our grandchildren.” But, as we saw, later growth (during Clinton) resolved that debt and created a budget surplus by 2000.