The Reagan Question

If I was to sum up Ronald Reagan's 1980 presidential campaign, I think one question would do it: "Are you better off than you were four years ago?"  I doubt Reagan was the first to ask it, he certainly wasn't the last, but I give to him the credit for making it the core question of presidential campaigns.

Pres. Obama has been in office more than two years, and I think it safe to say that the second two will reflect closely the first two.  What then, have the first two brought us?  I found this table on the Web recently.  While I cannot personally vouch for its accuracy, it tracks with every such summary I have seen over the past few months:

Economic Indicator	Jan 2009*	May 2011*	Change	**
Unemployment rate, non-farm, overall (U3)	7.6%	9.4%	+23.7%	1
# of unemployed (U3)	11,616,000	14,485,000	+24.7%	1
# of federal employees	2,779,000	2,840,000	+2.2%	1
Avg. retail price/gallon of gas: US	$1.83	$3.44	+84%	2
Crude oil: European Brent (barrel)	$43.48	$99.02	+127.7%	3
Gold: London (per troy oz.)	$853.25	$ 1,369.50	+60.5%	3
Sugar: Cane, raw, world, lb. FOB	$13.37	$35.39	+164.7%	3
Real median household income	$50,112	$49,777	-0.7%	4
# of food stamp recipients	31,983,716	43,200,878	+35.1%	5
# of unemployment benefit recipients	7,526,598	9,193,838	+22.2%	6
# of long-term unemployed	2,600,000	6,400,000	+146.2%	3
People in poverty in US	39,800,000	43,600,000	+9.5%	4
US $ / Japanese ¥ exchange rate ($1 =)	89.76¥	82.03¥	-8.6%	3
US Money supply, M2, in billions	8,310.9	8,852.3	+6.5%	13
National debt, in trillions	$10.627	$14.052	+32.2%	14

*Column headers are approximate; they reflect most current figures available on those dates. **Sources:  (1) US Bur. of Labor Statistics; (2) US Energy Information Admin.; (3) Wall Street Journal; (4) US Census Bur.; (5) US Dep't of Agriculture; (6) US Dep't of Labor; (7) US FHFA; (8) Standard & Poor/Case-Shiller, (9) RealtyTrac; (10) Heritage Foundational & Wall Street Journal; (11) The Conference Board; (12) US FDIC; (13) Federal Reserve Bank ; (14) US Dep't of the Treasury.

So, what does this mean in real terms?

Unemployment: For a larger discussion of this issue, read "Unemployment – the Real Story," which I posted here some weeks ago.  The bottom line is: 1 out of every 6 American workers isn't working or isn't working up to his/her ability.  PolitiFact.com estimates 8.75 million people lost their jobs from Jan. '08 to Feb. '10.  Fortunately, there is good news: In Arizona's 15th congressional district, 30 jobs were saved with $761,420 in federal stimulus spending. (No, wait -- Arizona has only 8 districts.  Oh, no! Someone in government lied, cheated and stole money!)  In February 2011, the Congressional Budget Office announced the $821 billion stimulus saved or create "between 1.4 million and 3.5 million" jobs.  Let's split the difference, call it 2.45 million jobs.  That means each job saved or created cost the US taxpayers over $335,000!  (Wish somebody would pay me a third of a million, I could've saved my job and created another – yes, Mr. President, gimme' 300 grand and I'll give you two-for-one!)

Prices: Have been going up.  No news here, but the administration keeps saying they can't do anything about it, especially gas prices.  Hey, remember the 2008 summer of $4/gallon gas?  (I do, I was driving 40 miles to & from work every day!)  Pres. Bush authorized domestic oil production increases and the price dropped to about $1.60/gallon by December 2008 – that was a 60% drop in about 6 months!  Since then, gas prices have gone steadily up, as domestic production has gone steadily down.

Income:  Now here's a bit of trivia for you:  The Census Bureau says there the average US household has lost $335 in income over two years.  The Census Bureau also says are over 105 million households in the USA.  What do you get when you put those together?  You get Americans losing over $35 billion in real income!  I heard recently that major industries in the US employ about 45 million people.  Food stamp recipients have almost matched that number – over 43 million.  Number of long-term unemployed has more than doubled.  What does it mean?  It means your income has gone down, if you're lucky enough to still have an income.

Prices & Income:  Back in '08, people like T Boone Pickens were telling us we were sending $700 billion to foreign countries to buy oil.  Now we find that American incomes have lost $35 billion.  What would happen if $735 billion got put back into the US economy?  The great recession would be over in a heartbeat!

Finally, the Money Supply:  The M2, if I understand it correctly, is the cash in circulation, in checking & savings accounts and other accessible places.  In short, it's the money we can use right now to buy the things we need and want.  Less is being produced, less is being bought, less is being earned, but the number of bills floating around is increasing.  No wonder the buying power of your dollars is dropping like a stone!

The Bottom Line—

Ronald Reagan asked one simple question, "Are you better off than you were four years ago?"  The answer was "no" and the people knew it, so Reagan won in a 49-state landslide!

Barack Obama campaigned on one simple statement (not even a complete sentence), "Hope and change." Well, after all the trouble the Obama administration has caused over the last two years (and I didn't even get into the $5 trillion in new debt!), I hope I have some change left!

Thanks for listening, tune in next week for another rant.