President Barack Obama will give a speech before a joint session of Congress this week, in which he will lay out a job creation plan. There have been only seven speeches about economic and business issues before a joint session of Congress since the end of the Great Depression. 24/7 Wall St. has reviewed these speeches and found that they had virtually no effect on the economy, despite the detailed proposals.
Of the seven addresses, two were about labor trouble, and both by Harry Truman: One was about the railroad strike in 1946, while the other was about the steel strike in 1952. Neither speech was effective. The strikes were settled by labor and management irrespective of the speeches. As a matter of fact, the railroad strike ended the day of the President’s speech.
The balance of the speeches addressed different crises such as soaring energy costs, inflation, and recession. Each of these speeches offered specific road maps for economic improvement. While each President gave a broad description of the trouble, most offered a specific set of solutions. Rarely were any of the plans adopted, either because of political opposition or because the problems resolved themselves. In many cases, the economy got worse after the presidential address. It is impossible to trace any recovery to the presidential proposals in almost every case. Those that were enacted into law were so substantially changed by Congress that they barely resembled the Presidents’ suggestions.
24/7 Wall St. reviewed all of the presidential addresses to joint sessions of Congress from the Great Depression through the present to identify all those that dealt primarily with the economy. This is 24/7 Wall St.’s analysis of The Seven Presidential Addresses to Congress on the Economy.
Truman’s Railroad Strike Message
Date: May 25, 1946
President: Harry S. Truman
Inflation: 8.3 percent
GDP 1 yr. growth: -10.9 percent (the second worst since the Great Depression)
Unemployment: 3.9 percent
On May 25, 1946, Truman said: “I come before the American people tonight at a time of great crisis. The crisis of Pearl Harbor was the result of action by a foreign enemy. The crisis tonight is caused by a group of men within our own country who place their private interests above the welfare of the nation.” The “group of men” happened to be the hundreds of thousands of coal workers that were on strike and the railroad workers that were on the verge of doing the same. Believing the unions were going too far by threatening to strike, Truman demanded the workers settle or he would implement measures such as drafting strikers into the armed forces. Mid-speech, Truman received word that the potential railroad strike had been settled. Days later, the coal strike ended as well. The President would face several more labor disputes during his two terms in office.
Truman’s Marshall Plan Speech
Date: November 17, 1947
President: Harry S. Truman
Inflation: 14.4 percent
GDP 1 yr. growth: -3.4 percent
Unemployment: 3.9 percent
On November 17, 1947, President Truman gave a speech to the 80th Congress, asking to give aid to France, Italy and Austria and to address the country’s rising inflation rate. “Today, inflation stands as an ominous threat to the prosperity we have achieved. We can no longer treat inflation–with spiraling prices and living costs–as some vague condition we may encounter in the future. We already have an alarming degree of inflation. And even more alarming, it is getting worse,” Truman said. The President went on to address the rising costs of specific items, noting that the average price for all cost of living items had increased 23 percent from the middle of 1946. His efforts were largely resisted by the 80th United States Congress, a group referred to by Truman as the “Do Nothing Congress.”
Truman on the Steel Industry Dispute
Date: June 10, 1952
President: Harry S. Truman
Inflation: 1.9 percent
GDP 1 yr. growth: +3.8 percent
Unemployment: 3.0 percent
In 1952, the United Steelworkers of America, working at U.S. Steel and nine other companies, began to strike, demanding wage increases. Prior to his speech, Truman had nationalized the steel industry — a decision that was quickly overturned by the courts. In his speech, Truman asked that the Congress authorize government operation of the steel mills. This request was not granted and the steelworkers were on strike for 53 days, at which time they reached an agreement with management.
Nixon on Economic Policy
Date: September 9, 1971
President: Richard Nixon
Inflation: 4.4 percent
GDP 1 yr. growth: +3.4 percent
Unemployment: 5.9 percent
In 1971, the United States was in the process of pulling its forces from Vietnam. It was also entering its worst economic period in years, one from which it would struggle to pull itself for more than half a decade. Unemployment was at a ten-year high at the time, and GDP had failed to grow for the first time since 1958. President Nixon addressed Congress, begging for bipartisan support. “As the dangers of war recede, the challenges of peace increase. It is customary for a President to ask the Congress for bipartisan support in meeting the challenges of war. Today I come before you to ask bipartisan support in meeting the challenges of peace.” In his speech, Nixon pleaded with Congress to cut taxes on vehicles, subsidize job growth, and cut income taxes. The income tax cuts were not meaningful, and the jobs were not created. Unemployment remained high and would not drop below 1971 levels until the Clinton administration.
Ford’s Economic Discussion
Date: October 8th, 1974
President: Gerald Ford
Inflation: 11.0 percent
GDP 1 yr. growth: -0.6 percent
Unemployment: 5.6 percent
In 1974, after a brief period of prosperity, the economy took a serious turn for the worse. For the first time since 1958 the country’s GDP contracted. More worrisome than this was that inflation had jumped to 11 percent from the previous year. In his 1974 speech to Congress, Ford stated his desire simply and clearly: “We must whip inflation right now.” He wanted to deregulate the economy to increase proficiency and to enact a temporary tax surcharge of 5 percent. His requests were not granted. The next year, unemployment jumped to 8.5 percent, the highest since the Great Depression. Worse still, inflation continued to rise an additional 9 percent. Economic conditions continued to deteriorate until a year later when Congress enacted a tax cut proposal and a tax rebate. It is this rebate, not Ford’s effort, that is credited with ending the recession.
Carter’s Energy Discussion
Date: April 20th, 1977
President: Jimmy Carter
Inflation: 6.5 percent
GDP 1 yr. growth: +4.6 percent
Unemployment: 7.1 percent
In 1977, the U.S. was between energy crises. The first was the result of the Arab oil embargo in 1973, and the second came in 1979 during the Iranian revolution. Oil prices, which were less than $3 a barrel before 1970, reached $10 a barrel by the mid-1070s. They would more than double by the beginning of the 1980s. With soaring fuel costs on the nation’s mind, Carter had addressed the nation with a 10-point proposal to reduce the U.S.’s energy usage in the long term. Carter’s suggestions ranged from developing alternative energy sources, including wind power, to avoiding subsidies that artificially reduce energy costs. Most of these proposals failed to get off the ground, and the vast majority of them have not been enacted to this day.
Reagan’s Speech on Economic Recovery and Inflation
Date: April 28th, 1981
President: Ronald Reagan
Inflation: 10.3 percent
GDP 1 yr. growth: +2.5 percent
Unemployment: 7.6 percent
The nation faced particularly high inflation in the early 1980s. To address this problem, as well as the moribund state of the economy, President Reagan delivered a speech to Congress. In that speech he pushed for cutting government spending and tax rates, saying, “Our government is too big, and it spends too much.” As a result, the Economic Recovery Tax Act of 1981 was passed, albeit to little effect. The economy soon fell further into recession. Inflation remained high and unemployment increased, peaking at an annual rate of 9.7 percent in 1982. It is possible that the recovery, which started two years later, was the result of Federal Reserve policy and defense spending.
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