re: US: Obama One Year after Elections (John Heelan, UK)

Nigel Jones wrote on 4 November:

A year in and the (Obama) administration has failed to lift the economy from the doldrums, with ten percent of the workforce jobless, a dollar plunging nearly as fast as the BO’s poll ratings and a country mired in unsustainable debt. (Just like Britain, in fact.)

John Heelan responds:

There is much truth in my countryman’s acerbic comments on Obama. However, perhaps he is being a little unfair in timescales.

As his hero, Margaret Thatcher–a far more draconian leader than Obama–found out, the economic depredations of the previous government were so deep that it takes substantially more than a single year to turn things around.

When Thatcher came to power in 1979 (I voted for her!), inflation was at 27%, over-powerful trades unions had caused wage inflation and time lost on strikes, unemployment was approaching a post war record of 700,000 and government debt was so large that IMF loans were required.

A devotee of Milton Friedman’s monetarist policies, Thatcher instituted extreme deflationary policies. Taxes were raised, government spending cut and interest rates increased as the government sought to reduce inflation.

A year later, the deflationary fiscal and monetary policies had reduced inflation, but at a cost. Aggregate Demand had fallen, economic growth had dropped leading to full recession by mid-1980, and unemployment was well on its way to the 3 million, a level that lasted for several years.

Would Nigel have said then that Thatcher had failed in her first year?

Is not Obama in a similar mess with the US economy wrecked by 8 years of Bush administrations? Is not one year too soon to turn the US “supertanker”?

If so, Nigel is being unfair to Obama. If not, I look forward to his similar comments after Cameron wins the next election and fails one year later to have remedied UK’s economic mess left by New Labour.