The 1970 and 1982 recessions were pre- liberalization recessions so there was a quick rebound. By 1994, the recession had already been over for 3 years, and it took another 2 years for voters to feel it. That is 5 years total. So the equivalent of 1996 in this scenario, assuming the recession ended in 2009, would be 2014. Too late.
The economy we have today, unlike the one in 1982, has gone through "restructuring" and "liberalization". It is a child of the Reagan revolution, the NAFTA revolution, the WTO revolution. The jobs ain't coming back, or ain't coming back fast enough.
I think Obama is f--ked, and I will say it now. He was f--ked from Day One. (Short of the Fed printing $5 trillion and him somehow convincing the nation of the need for a $2.5 trillion stimulus, but that opportunity has long since passed).
Megan McArdle
nails it:
"It's sad, but the economy makes presidents seem like geniuses or clowns more than it should. I think FDR basically did a good job with the banking system, but the fact remains that after 3 years of recession, the economy had probably bottomed out; if Herbert Hoover had taken office in 1930 instead of 1928, he might well have gone down in history as a great president. Carter, too, got painted as an economic clown, even though he started the deregulation and liberalization that Reagan finished. Unfortunately, he also presided over an ugly, ugly recession induced by Paul Volcker's war on inflation.
Conversely, Bill Clinton may have done many good things, but he didn't make any meaningful contribution to the tech bubble, which drove the economy, and especially tax revenues, to soaring heights.
On election night in 2008, I saw a bunch of people twittering some variant of "It's 1932!" This also seems to have been what Democrats in Congress thought--they seem to have believed that they had near-FDR levels of political capital to work with. But as I said at the time, the relevant comparison was not 1932, but 1929. Financial crises take a while to work through, and this one may well see Obama leaving office after one term, many of his policies tainted by association with a recession he didn't cause and couldn't ever have done much about.
(It also may not. I think the economy is going to be stagnant for a few years as we work out our balance sheet issues and reallocate labor from the housing market. But economic prognostication is a dismally poor science.)
Whichever way it works out, one side or another will overattribute the 2012 economy to Obama and the Democrats. The fact is, the president can't do much more than tinker around the edges of a $14 trillion economy--for which we can humbly thank God every day. If presidents really did have the kind of power over the economy that their friends or enemies try to claim, the world would be a much more terrifying place."
----
It's beautiful how a few short paragraphs describe everything you need to know about politics of the Obama Presidency. Forget everything ever written about health care, Mosque, oil spill, tea party, etc. etc. etc., Megan McArdle has just explained everything relevant.
In 2013, an extreme right wing Republican will be elected President by a huge margin, probably Sarah Palin, with a sizeable Republican majority in Congress, due solely to the economy. By 2016 the economy will have recovered enough to guarantee said Republican President's re-election. By the end of this term hard core conservatives activists will have a majority of the Supreme Court and start overturning the Warren era decisions. Racism will make a come back as blacks will be seen as incompetent and inferior due to Obama's failure. The young people who followed Obama will carry their disappoint with them for the rest of their lives and never be as idealistic or liberal again. All of Obama's policies, indeed all of liberalism, will be tainted by his perceived failure, regardless of what their merits might have been.
Basically, what happens in this country every day is getting played out on a grand scale. Spoiled, privileged Yalies like George Bush things up and get bailed out by their parents. The black janitor gets called in to clean up the mess, and when he's done he goes back to his working class apartment while George and his friends go and something else up. Obama is the janitor. During the Bush years, the private sector made trillions of bad loans, the federal budget structure became radically vulnerable to a downturn, and we got into two horrific wars funded by the Chinese who also took our jobs. But things seemed to be going well because the housing bubble kept going. Just as things were falling apart, Bush left office and told the janitor to come in and fix things up. After four years, he'll be thrown out.
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