Carter vs. Obama: Unemployment

Unemployment Rate, Source: U.S. Bureau of Labor Statistics

I have posted a number of articles recently comparing President Obama’s employment record to George W. Bush’s, and President George W. Bush’s record to President Clinton’s.

Out of curiosity, I decided to compare President Obama’s employment record with that of another Democratic president — namely, Jimmy Carter.

Many on the right have much maligned President Carter’s economic record. However, in the area of employment, his record positively shines in comparison to President Obama’s thus far.

President Carter’s tenure began with unemployment at 7.5%, only 30 basis points lower than it was when President Obama first assumed office in January 2009. However, the average unemployment rate for President Carter’s first two and a half years in office was 6.4%. The unemployment rate under President Obama has averaged 9.4%.

Labor Force Participation Rate, Source: U.S. Bureau of Labor Statistics

The labor force participation rate also started at a much lower base when President Carter first took office compared with the rate under President Obama. However, during Carter’s first two and half years in office, the labor force participation rate steadily increased. For President Obama, the rate has moved in the opposite direction, as people have become discouraged and stopped looking for employment.

Again, employment statistics are the result of a myriad of complex factors. I will leave it to my readers to determine why there was such a pronounced difference in employment statistics during the first two and a half years of each respective administration.

That said, the American people did not re-elect President Carter, and his employment record was better at this point in his presidency than it currently is for President Obama.

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About Sean Patrick Hazlett

Conservative clean energy crusader, national security hawk, financial analyst, engineer, and former military officer.
This entry was posted in Business, Finance and Economics, Media, Policy, Politics and tagged , , . Bookmark the permalink.

28 Responses to Carter vs. Obama: Unemployment

  1. Scott Erb says:

    I know I sound like a broken record, but this isn’t something in the power of a President to control. But it’s interesting to compare Carter, who from 1977 to mid-1979 was in a pre-recession economy to Obama who took over at the depths of a recession. To be sure, unemployment rose to historically high levels of 7.5% by the end of 1979 and stayed there through much of Reagan’s first administration (giving Reagan approval ratings as low as 38% by 1983). That number would sound good in today’s economy. My own view is that we’re probably looking at a high level of structural unemployment until we rebalance the economy from 30 years of debt financed over consumption (both private and governmental).

  2. jackdemprich says:

    I think that it is all tied to one thing, the middle class. During the late seventies energy costs soared and the middle class had to redirect their output of goods and services to maintaining their ability to heat and cool their homes and to fuel their automobiles. this in turn cost many jobs and kept the small business owners from expanding and hiring. Going from $2.00 a gallon to almost $5.00 a gallon has taken a huge chunk of peoples buying power. If the economy is going to grow the energy sector needs to cut the costs, Until this happens we will not see a change in the current economy and the unemployment problem.

  3. I think Obama will likely be defeated unless he faces a very weak or very extreme candidate.

    Sadly, he may prevail because that is exactly what may well happen.

  4. Alan Scott says:

    Sean ,

    Comparing Carter’s record directly to Obama’s is interesting, except for one thing . Carter’s real failure was inflation . Unemployment was not that bad. The misery index was primarily inflation . Most of that inflation was energy and energy induced . Carter’s remedy was eerily similar to Obama’s . Conservation and regulation . Supply has no meaning to either of them .

    • Alan,

      I agree that this picture is way too simplistic. Carter had stagflation. Obama has an anemic recovery. Both are very different. I am just shocked that unemployment was as low as it was under Carter. I was expecting it to have been a lot worse.

      • thomas says:

        That’s because of all the bs everyone hears about Carter. Look at Reagan’s unemployment. not every impressive considering he’s the right wing messiah

  5. Alan Scott says:

    Sean,

    I worked in a smoke stack industry during Carter . Those were our best years . We were booming . It was all inflation. As long as our wages went up as fast as prices, we were ok. But it did not last .By 79-80, it began to fall apart. In 1980 they shut down half of our plant . The business community lost confidence and Carter, like Obama could only respond with more of what already had failed .

  6. Alan Scott says:

    Sean ,

    I will now compare Carter and Obama and say something nice about Carter . Yes both may have been good Presidents in different times , but both were the wrong men for their times . I will say that I don’t recall Carter talking out of both sides of his mouth the way Obama does . If you were to collect every word President Obama has said since he came to Washington , you could catch him on both sides of every major issue .

    I have an example . We all know that Obama bashes the rich and the corporations and anybody that succeeds financially . We all know he believes in big government solutions as Carter did . But at least Carter did not pretend he was Reagan . I got the following Obama quote from National Review . It is from 2010 .

    ” I’ve never believed that government has all the answers to our problems . I’ve never believed that government’s role is to create jobs or prosperity . I believe it’s the drive and ingenuity of our small businesses, the skill and dedication of our workers, that has made us the wealthiest nation on earth . I believe it’s the private sector that must be the main engine of our recovery . ”

    Does anyone believe that President Obama believes what he said in that speech ?

    • I agree with you about Obama. He never quite lies, but he phrases things in such a way that it means all things to all people. However, when you look at the details, it turns out that he is sufficiently vague that he does not quite lie.

      The bottom line is that he is a lawyer, so I am not surprised that he is able to speak out of both sides of his mouth.

      I, frankly, do not trust him either.

      • Scott Erb says:

        He is a politician. I guarantee you that you can say that about most politicians, and pretty much everyone in either party who runs for President!

        All that said, the left wing of the Democratic party are the most upset with Obama for the opposite reason of what Alan says. They think he’s given in to the GOP, he’s negotiating meager tax increases yet talking about massive cuts of programs Democrats want, and he’s not gotten us out of Iraq and Afghanistan. My own take is that Obama is what he appears to be — a pragmatist who isn’t afraid to alter course or change his mind if the situation warrants. That’s why I reject the criticism of both the left and right of Obama, and actually hope that he and Boehner (who also is earning my respect) can come up with a real compromise that angers the extremes of each party, but takes us a step in the right direction.

        • I agree that most politicians lie. I also agree that the deal Obama put on the table seems highly favorable to Republicans. That said, with Obama, the devil is always in the details. He fooled me at least twice with his rhetoric. As such, I am highly suspicious of anything he says.

  7. Alan Scott says:

    Sean ,

    If you want to read something amusing, search and read Krauthammer’s column entitled ” Does he lie ” . It analyses Obama’s speech on health care . President Obama deliberately uses fancy phrases to confuse and mislead. Remember when his blind followers said they were so happy we finally had a President who could speak well, after suffering the buffoonery of Bush . Well , agree or disagree with him, Bush was usually clear .

    Ever notice how often President Obama says ” Let me be clear ” ? That’s because he never is .

  8. Scott Erb says:

    Well, he could say “let me make this perfectly clear…” (Yes, I’m old enough to remember that — that was Nixon’s catch phrase for those of you who aren’t!)

    Reagan had the ability to run very high deficits and dramatically increase debt even as oil prices dropped. That really stimulated the US economy going into 1984. Obama tried a stimulus, but the problems are such, and the debt is so high, that it may not work. And moving forward, he can’t increase debt to the extent Reagan did. So I suspect Obama will not have as bright an outlook as Reagan next year. I do think the GOP has to be careful how they handle this debt issue — they could be handing Obama a major political victory if they come off as being led by extremists, or end up divided by this whole thing — Senate Republicans are getting really upset with House Republicans…too bad DC has air conditioning, this would really be fun to watch if heat was adding to their irritation 🙂 Having worked in DC (for a Republican Senator in the mid-eighties), I recall that there was a real House-Senate “rivalry.”

    • “too bad DC has air conditioning, this would really be fun to watch if heat was adding to their irritation”
      Yes! There’s a story of a plant manager who dragged his heels on installing an expensive new air conditioner for the plant floor. The staff were all pissed to see him working in his AC’d office over and above them while they sweated. The employees went over his head and the manager’s boss put his desk out on the plant floor. Two days later, the new AC unit was being installed.

      Wouldn’t it be nice if the DC boys got to spend some time as the “little people” suffering the heat as the rest of us do?

  9. Alan Scott says:

    Scott ,

    I am sure I pointed this out to you before, but if I did not, here it is . Reagan made a deal with Congress. Democrats in Congress to be precise . He gave them $ 1 in tax increases and they agreed to $ 3 in spending cuts. Reagan said it was his biggest mistake as President. After he left office he was still waiting for the promised cuts. You keep saying how Reagan, Reagan ,.Reagan ran up deficits . If Democrats were not dishonest, those deficits wouldn’t have been that bad . That is the problem now with Obama. The cuts he promises are illusions. Once he gets his tax increases he will do what all Democrats do, lie . Those cuts will be the same accounting tricks he used to say that Obama-Care was cost effective . Obama will not put specific cuts on paper.

    And as far as increasing the debt as far as Reagan did, in dollar terms he has gone far above it . And he cannot do as Reagan did and blame the other party for spending . Obama had total control of both Houses for two years. Unlike Reagan, Obama owns his deficits .

    Also comparing Reagan to Obama, Reagan did not try an FDR public works program like Obama did . That really didn’t even work for Roosevelt . Reagan pushed deregulation and tax cuts, and it worked . Reagan did not bash American companies or play class warfare.

    Reagan also did everything he could to encourage oil production. Obama has done the opposite and lied about it .

    • Scott Erb says:

      Alan, Reagan could have veto’d budgets. The fact is the Reagan administration said that budget deficits did not matter. They enjoyed the fact that the stimulus the deficits were giving the economy helped increase his popularity. In reality, the 80s “good economy” was built on debt — we went from debt of 30% of GDP to 60% of GDP in less than ten years, while oil prices were going down. So Reagan’s policies “worked” on in so much as if you run up high debt you can create the illusion of a healthy economy.

      But that isn’t completely fair. Just as you’re being misguided in trying to blame just the Democrats, it’s wrong to blame just Reagan. They both were in it together. I was working in DC in the Senate (for a Republican) from 1983 to 1985. I do not recall the “deal” you talk about. I do know that Reagan had functioning majorities in the House (thanks to southern Democrats) and Senate for much of his first term. I know that the Reagan White House didn’t really care about deficits (one reason Stockman quit). Don’t get me wrong, I rather liked Reagan. He was pragmatic, worked well with both parties, and had the good sense to stop the defense build up when he determined he could trust Gorbachev, thereby allowing Gorbachev time to push change to the point it could not be turned back. Reagan was right (while some of his critics on his right were wrong to complain that ‘Weinberger and Shultz aren’t letting Reagan be Reagan.’) But I think he took a wrong term on the economy by accepting large deficits and a growing current account deficit — and I fault the Democrats for that too. Our mistakes in the 80s were bipartisan, and now we’re facing thirty years of growing economic imbalances.

      And, of course, you know Reagan’s views on raising the debt ceiling. Only someone irresponsible who didn’t care about the country’s good word would risk default.

  10. Alan Scott says:

    Scott,

    ” Alan, Reagan could have veto’d budgets. ”

    Now I have to bow out because I don’t know the exact conditions . Perhaps Reagan had other reasons for not vetoing those budgets . When you do that you delay all things in DC and perhaps it was not feasible to hold out for a better budget, but I don’t know .

    ” In reality, the 80s “good economy” was built on debt — we went from debt of 30% of GDP to 60% of GDP in less than ten years, while oil prices were going down. So Reagan’s policies “worked” on in so much as if you run up high debt you can create the illusion of a healthy economy. ”

    I agree on the 1980s debt, but when you compare that to now, what is the difference ? The difference is that a growing economy can handle and service greater debt . I agree, it shouldn’t have to but , it can . Reagan got growth for his debt . President Obama has now run up huge debt and gotten very little for it . The growth he has achieved will not service the debt he has run up .

    ” I was working in DC in the Senate (for a Republican) from 1983 to 1985. ”
    I am impressed. That makes you a professional among us amateurs .

  11. Scott Erb says:

    The other difference is that if you’re in good shape in terms of debt, as we were in 1980, you can run up deficits and it doesn’t seem so bad. But you reach a point and it does more harm than good to continue piling up debt. That’s the difference. The 80s were the start of this cycle, now we’re completing it.
    Here’s an interesting piece from the Telegraph, the conservative UK paper. A Republican friend of mine (who is in the state legislature) sent it to me.
    http://www.telegraph.co.uk/news/politics/8655106/Im-starting-to-think-that-the-Left-might-actually-be-right.html

    The way I see it: the left has been right to distrust big money and believe markets need to be regulated, the right has been correct to distrust big government and believe bureaucracies should be limited. Both sides are part right — if only they could come together on what they have right!

  12. Alan Scott says:

    Scott,
    I still disagree. We are very much like Greece . In the 1980s we borrowed to give tax cuts for the rich and business . The fact that inflation and employment improved suggests those were good deficits . We also borrowed to rebuild a post Vietnam military . The fall of the Soviet Union suggests that was a good use for borrowing also .

    Lately we are borrowing to finance a bloated Federal Government and an unsustainable welfare state . Just like Greece did . That is a bad deficit .

  13. Scott Erb says:

    Well, the fall of the Soviet Union wasn’t due to the US military build up — but that’s a whole other issue. Basically communism imploded from within, the economic collapse was seen coming by the KGB in the 1970s. Moreover, the break came from East Europeans taking matters into their own hands. Reagan did halt the defense build up in real terms after 1985 because he trusted Gorbachev — I give him a lot of credit for that. That convinced the Soviet military that Gorbachev could handle Reagan, and thus he was in power enough to assure that the hardline communists couldn’t take over. If Reagan had not had such keen instincts in dealing with Gorbachev, things could have gone much differently. I did a blog post on that once: http://scotterb.wordpress.com/2009/03/12/reagan-and-gorbachev/

    So raising the debt from 30% of GDP to 60% of GDP was good because it stimulated the economy? That’s a very Keynesian belief, but even Keynes would argue that once you have a booming economy you should stop running deficits and in fact have surpluses in order to maintain a sustainable economy. I disagree that the eighties debt was good, especially since it started are growing current account deficit. In fact, I’d argue our problems now come from thirty years of living beyond our means, relying on foreign money to finance consumption, which outpaced production. That means I don’t blame Bush for the collapse, nor do I expect Obama or anyone to fix it up quickly. TARP did save the credit markets, and I think was one of the more enlightened policies of President Bush (and its been pretty much paid back). The stimulus is less clear. It didn’t turn the economy around, but it may have halted what had been a pretty hard fall. I do think the debt to GDP ratio is too high, especially given our reliance on foreign funds to finance it.

  14. Alan Scott says:

    Scott ,

    Since we are making no progress on the 80s and TARP and deficits, lets stick to the Soviet Union . It like all Communist societies, they are only good at war . A prolonged peace is fatal to them . It is true they imploded from within, but that was only possible because of peace . Peace was possible because we matched them in military strength . If we were weak, we would have been attacked and they would have survived . North Korea and Cuba are basket cases because they haven’t gone to war and conquered anyone .

    If Reagan had not been strong, the Soviets either directly or through their clients would have continued to challenge us . Communism is a war time economy. It is the only way you get people to put up with continual sacrifice . You just can’t motivate people to accept mediocrity and work hard for it in peace time Marxism .

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  16. I would say , like you said presidents dont create jobs he leads us into the future. The difference is he’s smart to know low skilled jobs are pretty much gone, so the sector he’ s focusing on is education along with other programs . The bottom line is small business in the incubation stages can free up cash.These people that say they have no cash are lieing. Carter and Obama are just seeing the projected reality of this so called free nation with no regulation its a perfect dream….and there is no perfect dream. Pollution kills its a fact ! Do you remember the streams and just look at china its good to have regs. Its incentive that should lift industry and obama has explained everything period. You guys are for the here and now and if either party doent focus on the future of this country were in trouble. I agree mandateing business forcing health care needs more attention. To me its how big the business is say more than ten employees ….To be honest small business will figure its way ive been in that sector cash flows abundently. People are there to help in bad times. The true problem is the market is fixed and they have been monopilizing the corprate world to there liking …everyone lost there ass other than the big shakers and movers. Lets face it cheaper products have killed small business manufacturing …Inflation is directly related to energy and thats where we need to curb are apitite…..or find alternitive souces and quik ….because if you didnt notice fossil fuels and coal are a major contributer to the corn issue. It just seems you are concerned with the minutes ahead not the days …And ill tell you this these tycoons that could change the direction and determine what president will get elected just on how difficult they inflate the world economy. They like war because people spend and move money and they get a first hand look at were its going so they get in and out.. having capital on a surething is a sure thing they hate gambleing there money away……so if you think there wrong carter couldnt stand the federal reserve and obama is smart enough to know he has to use it…..

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