Bob Brinker's Herbert Hoover and FDR Blunder

Bob Brinker said: "Nobody envies this president-elect coming in and taking on the worst economy since Herbert Hoover left the economy to FDR 76 years ago. Hopefully, the right decisions will be made and things will get going in the right direction."

Caller Ray indignantly took exception to Brinker saying this is the worst economy since Herbert Hoover. He said the economy was in worse shape during the Jimmy Carter administration. He said that it has been proven that the free market can bring us out of a recession. He suggested doing away with capital gains taxes and lowering all taxes, and letting businesses keep their money because they reinvest in their business and that brings about job creation. (Read more of what Ray said in the previous Moneytalk Summary.)

Our resident analyst, Jeffchristie reported these facts:

Blogger jeffchristie said...

I am not as old as Bob Brinker so I don't remember what the economy was like when Herbert Hoover left office. I am old enough to have lived through the Carter years. The economy was bad. Maybe Ray should have given Bob some economic data to support his case.

First would be unemployment. In 1980 the year started with unemployment at 6.3% in Jan and went to 7.5% in May.. It stayed above 7% for the remainder of the year.

In 2008 unemployment was 4.9% in Jan and didn't go over 6% till Aug. It stayed below 7% until Dec.

The average unemployment rate for 1980 was 7.2% while the number for 2008 was 5.8%.

Inflation was a MAJOR problem in 1980. The annual rate was around 14%.

In 2008 we only have 11 months of data but if you average it out we are in the 4% range.

I think Ray has a valid argument. Too bad he didn't have these numbers to show that Bob is full of soup on this one.

January 12, 2009 9:37 AM


Honeybee here: Sivbum and Jeffchristie added some new data to this topic:

sivbum said...

The unemployment rate was well over 8% in the early 80s, during Reagan Years (not Carter):

• 1980 7.18
• 1981 7.62 Reagan
• 1982 9.71
• 1983 9.60
• 1984 7.51
• 1985 7.19
• 1986 7.00
• 1987 6.18
• 1988 5.49
• 1989 5.26

http://www.miseryindex.us/urbyyear.asp

jeffchristie said...

Thanks for quoting that data from the misery index. It is the combined total of unemployment and the inflation rate. You can see below that it peaked at 20% the last year that Carter was in office. It was more than cut in half to 9.57% the year Reagan left office.

While we don't have a figure for 2008 yet, the average rate of unemployment for the year was 5.8% and I think it is safe to assume that the inflation rate will come in at the 4 to 6% area.

Using the misery index, a current reading of around 10% is half of what it was under Carter.

Brinker is making one of his famous bizarre statements when he compares today's economy to Herbert Hoover. When Hoover left office the unemployment rate alone was around 24%. The misery index for 2008 is about half of what it was in 1980. Bob is clearly full of soup and this data proves it.

• 1948 11.49 Truman
• 1949 5.10
• 1950 6.30
• 1951 11.16
• 1952 5.32
• 1953 3.74 Eisenhower
• 1954 5.91
• 1955 4.09
• 1956 5.64
• 1957 7.64
• 1958 9.57
• 1959 6.46
• 1960 7.00
• 1961 7.76 Kennedy
• 1962 6.77
• 1963 6.88 Johnson
• 1964 6.44
• 1965 6.10
• 1966 6.80
• 1967 6.62
• 1968 7.83
• 1969 8.95 Nixon
• 1970 10.82
• 1971 10.25
• 1972 8.87
• 1973 11.02
• 1974 16.67 Ford
• 1975 17.68
• 1976 13.45
• 1977 13.55 Carter
• 1978 13.69
• 1979 17.07
• 1980 20.76
• 1981 17.97 Reagan
• 1982 15.87
• 1983 12.82
• 1984 11.81
• 1985 10.74
• 1986 8.91
• 1987 9.84
• 1988 9.57
• 1989 10.09 Bush, G.H.W.
• 1990 11.01
• 1991 11.10
• 1992 10.52
• 1993 9.87 Clinton
• 1994 8.71
• 1995 8.40
• 1996 8.34
• 1997 7.28
• 1998 6.05
• 1999 6.41
• 2000 7.35
• 2001 7.59 Bush, G.W.
• 2002 7.37
• 2003 8.26
• 2004 8.21
• 2005 8.48
• 2006 7.87
• 2007 7.46

January 14, 2009 5:35 AM

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