JFK and Obama: The Recession Presidents
In the United States, every once in a great while comes a president that inspires the nation, even if that inspiration is but temporary. Both John F. Kennedy and Barack Obama began their terms in office on a wave of hope. For JFK, who was president for only 1,000 days, it began with his 1961 inauguration speech and its call to action, a phrase that resounded across the country. He gave Americans an invitation: “And so, my fellow Americans: ask not what your country can do for you — ask what you can do for your country.”
The nation he addressed was 9 months into a recession that ended what was at the time the longest period of economic expansion in U.S. history. When Obama began his campaign, it was with the promise of hope and change — a pledge that appealed to many Americans as the recession deepened the closer election day came.
The trip both men took to the White House had moments of similarity. When Kennedy ran for president, no Catholic had led a national ticket since New York Governor Al Smith lost to Republican Herbert Hoover in 1928. While the religious discrimination he faced as Catholic by no means compares to the racism experienced by Obama, both nominees converted their disadvantage into political capital. Through their political skill and strong oratory, they were able to convince voters that casting a ballot for Obama or casting a ballot for Kennedy was a vote for tolerance, for hope, and for change — in general, a better future.
Like Obama, when taking the oath to become the 35th president of the United States in January 1961, Kennedy had to win over a skeptical business community and fix an economy dogged by increasing unemployment, falling corporate profits, and depressed stock prices. It may be nearly impossible to compare the two men on the basis of how successful their methods were, employed to put the country on the road to recovery. After all, the United States economy is far different now than it was in the early 1960s. At that time, it accounted for around a third of global gross domestic product, a share that has dropped to less than a quarter. Yet, the legislation they pushed to mitigate the impact of the recession and put the economy in recovery as well as the words they chose to temper the fears of the American people influenced how Kennedy was remembered and will greatly impact how Obama will be remembered. Furthermore, they both entered office on such a wave of hope and with a promise for change that comparisons are bound to arise.
Among historians, the general consensus is that is that Kennedy’s economic fix had a significant — though complicated — long-term effect on the economy. Nearly all agree that his policies were partly responsible for the golden era of the mid-1960s, a time when the U.S. experienced vigorous economic growth. By 1966 — almost three years after Kennedy’s death — stock prices were soaring, the economy was expanding at a rate of 6.6 percent, and the unemployment rate stood at just 3.8 percent. His agenda included an increase to minimum wage, an expansion of unemployment benefits, improvements to Social Security benefits to encourage workers to retire earlier, and greater spending on highway construction and urban renewal. In essence, he was pushing Congress to jump start the economy by increasing government spending, as NPR senior business editor Marilyn Geewax explained on a NPR-affiliated public radio station earlier this week.
One tool Kennedy employed to encourage an economic recovery seemingly contradicts that liberal agenda. He cut taxes — despite concerns from conservatives who feared his policies would greatly increase the deficit. In response to his critics, the president famously said “a rising tide lifts all boats.” The idea being that lower taxes would generate broad-based growth. Speaking at the Economic Club of New York in 1962, the president explained why those changes were needed and committed to “an across-the-board, top-to-bottom cut in personal and corporate income taxes.” At the time, the American tax system was still operating largely in its World War II-era mode, with tax rates set to levy much-needed revenue to fund the war effort. That system “exerts too heavy a drag on growth in peace time; that it siphons out of the private economy too large a share of personal and business purchasing power; that it reduces the financial incentives for personal effort, investment, and risk-taking,” he said.
Congress passed the Kennedy tax cuts in early 1964, and the next fiscal year, the federal budget shrunk. With the improving economic picture, investors put money in the stock market and the Dow Jones industrial average nearly doubled between 1962 and 1966. Due to that period of economic growth, conservative politicians often point to that time as evidence that cutting taxes will boost the economy. However, liberals contend that the reality of early-1960s America, with its top marginal tax rate of 91 percent, made tax cuts the right solution.
But today, the highest tax rate is 39.6 percent, meaning that if the top tax bracket was cut it would not have the same impact. “You can only go to the well so many times before you lose effectiveness,” historian David Shreve told NPR. Plus, according to Shreve, conservatives also fail to take into account the fact that Kennedy’s biggest tax cuts were given to average wage earners so the would spend more. Strengthening the demand side of the economy “gave us the widest prosperity and longest unbroken run of growth in history” until the 1990s, he added.
Time picked Kennedy as its Man of the Year for 1962, noting that “in his first year as President, John Fitzgerald Kennedy showed qualities that have made him a promising leader. Those same qualities, if developed further, may make him a great President.” On the morning of his assassination, Americans felt positive about the president and the country, as Pew Research Center’s Andrew Kohut told the Christian Science Monitor. “The mood of America then had few parallels with the modern era,” he said. While a recent Gallup poll showed that nearly three-quarters of Americans believe Kennedy will go down in history as an outstanding or above-average president, historical scholars tend to place him more near average.
Journalist Adam Clymer wrote in the New York Times that Kennedy suffered his fair share of legislative setbacks and he described the president as a man “whose oratory outstripped his accomplishments.” Yet, nevertheless, Richard Reeves — author of President Kennedy: Profile of Power — wrote for the L.A. Times that, ”Kennedy probably doesn’t belong on a list of the top five presidents. But I would put him near the top of the next list. Although he served less than three years, he was the most important man in the world at a critical time, the man in charge at a hinge-point in national and world politics, diplomacy and war — at home and abroad.”
As for Obama, whose second presidential term is under way — a more clear picture of how he will be view historically has begun to emerge. Like Kennedy, he too was handed a prestigious award early in his presidency; he earned the Nobel Peace Prize in 2009 for his “for his extraordinary efforts to strengthen international diplomacy and cooperation between peoples.” However, his presidency has been overshadowed by the still struggling United States economy, and of course, the contentious healthcare reform. Based on analysis of election statistics, the New York Times’ Nate Silver determined that Obama would rank as the 17th best president of all time, a grade that places him in the “average” category. For reference, those presidents who ranked in the top 15 were considered “good.” He made this determination by first considering his reelection.
According to Silver, “Mr. Obama ran for and won a second term, something only about half of the men to serve as president have done,” and “winning a second term is something of a prerequisite for presidential greatness, at least as historians have evaluated the question.” However, because his margin of victory was not overwhelming, his ranking was lowered. Most of the best-regarded presidents have won more overwhelmingly more than the 62 percent of the popular vote that Obama won. “Overall, there is a positive relationship between a president’s performance in the Electoral College when seeking a second term and how the historians have ranked him,” Silver concluded.
The president’s approval rating tells a different story. A new poll released on Thursday by CNN showed Obama’s job approval rating has hit another all time low, with 56 percent of Americans disapproving of his performance. The flawed launch of the Affordable Care Act’s online insurance marketplaces has hurt the president’s rating, which has fallen 3 points since mid-October, but CNN Polling Director Keating Holland explained, “the real damage came in June, when reports about NSA spying and IRS treatment of conservative groups caused an eight-point drop in his approval rating.” A slightly different take on why Americans are displeased with Obama’s approval rating came in August from Gallup. In August, a survey found that the economy was easily the most important driver of his rating. Just 35 percent of Americans approved of how he has handled the economy.
“It’s no surprise that the economy is the key issue in determining how Americans rate the job Obama is doing as president. He was elected during the worst economy since the Great Depression and has recently attempted to refocus his attention on it,” wrote Gallup’s Jeffrey M. Jones. “It is not clear how much presidents’ policies can influence the course of the U.S. economy, and Obama may be limited in what he can do in general, given stiff opposition to his economic agenda from Republicans in Congress. Regardless of whether it is through his own efforts or the efforts of American businesses and consumers, the surest way for Obama’s approval ratings to improve is for the economy to get stronger.”
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