Right now, the betting is against Obama being another Reagan

There's been a lot of comparisons of President Obama to President Reagan,  President Kennedy and President Roosevelt; among non-divine historical figures. Based on this forecast from the noted right-wing rag, the New York Times, it appears unlikely that on one score Obama will reprise Reagan; he is unlikely to preside over a jobs boom in his re-election year.  

As the recession grinds on, more and more of the nation's means of production -- its workers, its factories, its retail outlets, its freight lines, its bank lending, even its new inventions -- are being mothballed.

This idled capacity, like baseball players after a winter off, takes time to bring back into robust use. So even if the recession miraculously ended tomorrow, economists estimate that at least three years would pass before full employment returned and output rose enough for the economy to operate at full throttle.

So when do things "return to normal"?

 The Obama administration, like the Roosevelt administration 75 years ago, is trying to break this logjam through government spending, using it in effect as a substitute for consumers who are jobless or short of credit. The spending is also a substitute for companies that hesitate to extend themselves or see no profit in doing so.

But the president's solution, the recently enacted stimulus package, spreads $787 billion over two years. So even if every dollar of spending restored a dollar of output, President Obama would be nearing the end of his first term before output approached the level achieved just before the start of the recession in December 2007.

I might add one concern I have is it seems likely to me much productive capacity will be permanently shut down. Some of this may be in "Neutron Jack" fashion; for example, when Obama idles the F-22 production line even if the plant in Georgia is left intact, the skilled labor is going to be in the wind and incapable of being replaced in short order.

A permanent --or at least "sticky"---reduction in the private sector's ability to supply goods coupled with monetary expansion unseen in American history. Stagflation, anyone?

I also find agreement from another voice of the right, 538.com's Nate Silver.  Here's a few excerpts from his post, Why We're Probably in For a Long Recession 

Silver reviews in his February 10 post economic declines and recoveries since 1945, and breaks out the "post-Greenspan" ones as having more "inertial momentum" than the more volatile economies previously. The Greenspan era has been noted for fewer recessions, but slower recoveries, according to Silver.

  Now suppose instead that we perform the same process based solely on data from the Greenspan Era -- from August 1987 onward. This gives us a rather different result:

I would argue that since February notwithstanding the "relief rally " off Dow 6500 and a few signs of housing liquidity that we are moving closer to the "red line"; which Silver anticipates would yield a peak unemployment rate of 9.6% in May 2010.

Silver also seems skeptical with the long tail of this model " it is not necessarily out to lunch in thinking that the equilibrium unemployment rate will be in the high 5's rather than numbers like 4.0 that we are used to." 

What is the effect of a 9.6% unemployment rate on the 2010 midterm elections?   Well we do have some useful background from the 1980's  The Republicans lost 26 house seats that year perhaps because unemployment reached 10.8% in November 1982.

So much for Joe Lieberman's "make nice" on behalf of Chris Dodd.

He predicted voters will realize Dodd is too valuable to lose, as the economy begins improving while Dodd keeps working on legislation to fix the financial system.

No "Joementum" in the job market that I'm seein

Back to Nate Silver. He asked this question "When will voters blame Obama?" Answer:

Obama crosses the 50 percent threshold at almost exactly 18 months from now, which would mean September 2010. At that point, a majority of voters say they will hold Obama accountable for the performance of economy

When unemployment is likely to exceed 9%. Not timely just eight weeks out from an election.

OK, so maybe the Democrats get bloodied in 2010. Won't the economy come roaring back like it did for Reagan?

Well, this was the pattern from 1982 to 1984      The unemployment rate fell quickly from its Autumm 1982 spike, ending 1983 at 8.3% and reaching 7.2% on election day.

Payroll increased by 3.5 million in 1983 and by another 3.5 million prior to election day 1984;  Source: http://www.bls.gov/ces/ 

Today we remember Reagan burying Mondale in the largest landslide in history, but his re-election was a near run thing; his approval was below 50% for most of 1983 and finally started into positive terrotory as the election neared.Polls in early summer 1984 showed both Mondale and Hart within single digits of Reagan.  ; had the economic recovery been slower or weaker American history might have been radically different.

So what will be the upshot if by election day 2012 national output is no higher than upon the start of the recession?. Well, barring an unprecedented drop in productivity total employment will be less than when he assumed office.  And, barring an unprecedented drop in the over 18 US population, the labor force will be larger. So it's probably reasonable to expect that the November 2012 unemployment rate will exceed the January 2009 rate of 7.6%   Sure Reagan got re-elected with unemployment in the 7's....but will Obama be able to point to massive job growth immediately prior to his election? 

And remember too, when Obama took office inflation and interest rates weren't a concern.  What would a return to $4/gallon gasoline do to his political fortunes?

At this stage, my money is Obama's gonna have to be a Roosevelt; since I seriously doubt he'll end up resembling Ronald Reagan.