Democratic Presidents Are Better for the Economy

[Direckshun]

Because I don't think we've been arguing enough recently.

Results are based on a study examining economic performance of every President since Truman

http://www.bloomberg.com/news/2012-0...e-economy.html

Democratic Presidents Are Better for the Economy
By Richard J. Carroll
Jun 25, 2012 5:30 PM CT

The prevailing political wisdom says that a U.S. president should win re-election if gasoline prices are stable, the stock market is climbing and monthly jobless numbers are declining.

There is some logic to this: Such indicators affect our pocketbooks and our psyches, whether or not the president has much control over them. Yet short-term economic fluctuations are not what make the nation strong or a president great.

A president is a success economically if he can help steer the country onto a longer-term path of broadly shared economic growth, and if his policies lay a foundation for sustainable prosperity for the future. Although it isn’t easy for voters to determine if a president is contributing to long-term economic success, they can do better than base their decisions on gas prices.

After three years in office, President Barack Obama has enough of a record to judge against the economic performances of other recent presidents. The rankings can help you cast a more informed vote in November -- one that doesn’t view Obama in isolation or depend on which candidate’s super-PAC spent the most on advertising.

In “The President as Economist: Scoring Economic Performance From Harry Truman to Barack Obama,” I compare the 12 presidents since World War II using 17 economic indicators, including growth in gross domestic product, rate of unemployment, inflation, population below the poverty line, increase in the Dow Jones Industrial Average, savings and investment rates, exports and trade balances, federal budget growth, and debt and federal taxes as a share of GDP.

Smaller Government

The analysis accepts Republican economic philosophy that says the U.S. would be better off with a lower rate of federal budget growth and a smaller federal budget relative to GDP. So presidents were penalized if the federal budget grew faster than the economy during their terms. Likewise, higher tax revenue as a share of GDP also counts against a president’s record. It is a framework that rewards smaller government.

The book examines each indicator for each administration, and boils down the many aspects of a president’s economic performance to a single score. The scores are derived using basic statistical methods, including averaging each president’s indicators, then determining standard deviations from the mean. These methods produce a common unit of comparison for indicators that are expressed in different units, such as growth rates and shares of GDP. The results may surprise you (table).

As you can see, Presidents Harry S Truman, John F. Kennedy and Lyndon B. Johnson rank first through third. Presidents George H.W. Bush, Jimmy Carter and George W. Bush make up the bottom three. President Ronald Reagan is No. 8, just one slot above President Obama.

It’s important to note that the analysis uses a one-year lag on the indicators to reflect that a president’s first year in office is usually dominated by the federal budgets and policies adopted under the previous administration. No reasonable economist would blame the 10.5 percent inflation rate and other weak economic conditions of 1981 on Reagan. Clearly, Carter was mainly responsible, presidentially speaking. Similarly, the slow economic growth of 2001 had nothing to do with George W. Bush’s policies, and Obama cannot credibly be blamed for the economic fallout of 2009.

Informed Vote

Truman’s first-place finish owes mainly to the vast improvement in fiscal indicators. He was the only president, for example, who averaged a budget surplus (2.4 percent of the federal budget). He reduced the national debt as a share of GDP by 46.1 percentage points (from 117.5 percent in 1945 to 71.4 percent in 1953), and tax revenue as a share of GDP at 16.6 percent was second lowest (only Obama’s 15.3 percent is lower). Truman’s indicators in the general economy include the second- lowest average unemployment rate, 4.0 percent; the second- highest annual productivity growth rate, 3.2 percent; and the best average trade balance, a surplus of 1.6 percent of GDP.

In the middle of the rankings, we find Presidents Bill Clinton and Richard Nixon at six and seven. It might surprise some that Nixon is right behind Clinton because the 1970s produced such checkered economic results and Clinton is highly regarded for his management of the economy.

Nixon, however, had the highest average savings rate; the second-lowest percentage of the population below the poverty line; and the second-highest increase in exports. Nixon also had some big negatives, including the second-highest average inflation rate of 6.6 percent and the highest increase in unemployment of 4.9 percentage points.

Clinton’s term produced the second-largest reduction of population below the poverty line. He came in fourth for GDP growth of 3.6 percent; and he scored third for annual stock- market growth. Clinton’s negatives include the worst deterioration in the balance of trade at 2.6 percentage points of GDP -- a surprise considering that he won congressional approval for the North American Free Trade Agreement.

In the end, Clinton comes out ahead of Nixon, but not by much. Had Nixon not resigned and instead finished his second term, his record would have benefited from the 1976-1977 recovery years, putting him ahead of Clinton.

At the bottom of the standings, the George W. Bush administration had many strong negatives and few positives. Bush 43 had the lowest GDP growth rate at 1.4 percent; the worst average trade balance; the highest increase in population below the poverty line; and the biggest increase in the national debt.

Counting as positives on Bush 43’s record were his low average inflation rate of 1.8 percent (third place), second-best export level at 10.8 percent of GDP, and the highest drop in tax revenue as a share of GDP, 4.4 percentage points (from 19.5 to 15.1 percent).

Party Comparisons

The rankings can also be used for performance comparisons of the two political parties. Conveniently, there are six Republicans and six Democrats, so if we take the average for Democratic and Republican presidents we can make a head-to-head party comparison. The Democratic presidents scored substantially higher than the Republican presidents, with a score of 26.95. Republican presidents scored -26.95.

Other statistical tests, including the so-called min-max method, which moderates the influence of extreme indicator values, produce similar results. These are consistent considering that the top three performers are Democrats and two out of the lowest three are Republicans. Five out of six Democrats reduced the national debt as a percentage of GDP, while four out of six Republicans raised it. The story is similar on budget deficits, with five of the top six performances recorded by Democrats and four of the bottom five recorded by Republicans.

With respect to GDP growth, three of the top four performers were Democrats and four of the bottom five were Republicans. In reducing the poverty rate, the top three were Democrats and two of the bottom three were Republicans. The Democrats also had a better record on employment.

Republicans had better records on reducing inflation, achieving four of the top five performances, while Democrats had four of the bottom five showings. Republicans also did well in lowering tax revenue as a percentage of GDP, claiming the top five spots.

So what does this tell us about Obama? When all of the indicators are combined, he ranks ninth out of 12, one position below Reagan but above Bush 41, Carter and Bush 43. Obama is also well below the midpoint that falls between Clinton and Nixon. For Republicans who view Reagan as an economic miracle- maker and Obama as, well, something less than that, it might come as a shock that Obama falls next in line in economic performance.

Though Obama’s performance doesn’t sound very impressive when compared with all the presidents, it is respectable when compared with his immediate predecessor, Bush 43. Lined up against his contemporaries after 1977, Obama ranks third out of six.

Voters can decide whether to re-elect Obama according to gas prices, the monthly jobs reports and fluctuations in the stock market. Or they could take the long view and look closely at where the U.S. economy stood when he took office and where it is today, as Part 2 of this series will explore.

(Richard J. Carroll is an economist at the World Bank. This article, the first of three, is based on his new book, “The President as Economist: Scoring Economic Performance From Harry Truman to Barack Obama,” published in June by Praeger. The opinions expressed are his own.)

[Donger]

Originally Posted by Direckshun

I love pat declaring our war in Afghanistan to be amazingly successful, militarily.

That's like saying my SUV was amazingly successful in flattening that bicycle some kid left in the street.

THE US MILITARY ROUTED THE TALIBAN IN OPEN WARFARE. SIMPLY AMAZING.

You do realize that the Soviet Union never achieved the same result, right? We HAVE been amazingly successful in Afghanistan militarily.

[Direckshun]

Originally Posted by Donger

You do realize that the Soviet Union never achieved the same result, right? We HAVE been amazingly successful in Afghanistan militarily.

I'd put the 2002 US military up against the 1980s Soviet Union military any day of the ****ing week.

Meanwhile, behold the Taliban's massive technological gains in warfare since the 80s!

[Donger]

Originally Posted by Direckshun

I'd put the 2002 US military up against the 1980s Soviet Union military any day of the ****ing week.

Meanwhile, behold the Taliban's massive technological gains in warfare since the 80s!

I'm sorry, but what does either of those have to do with our military operations in Afghanistan NOT being massively successful?

[BucEyedPea]

Originally Posted by Donger

You do realize that the Soviet Union never achieved the same result, right? We HAVE been amazingly successful in Afghanistan militarily.

[Direckshun]

Originally Posted by Donger

I'm sorry, but what does either of those have to do with our military operations in Afghanistan NOT being massively successful?

Is the Dream Team massively successful when it beats Uganda in a pickup game by 60 points?

[patteeu]

Originally Posted by Direckshun

Why can't you understand that?

They're not mutually exclusive statements.

Feel free to explain it to me. Please use small words that I can easily digest.

[Donger]

Originally Posted by Direckshun

Is the Dream Team massively successful when it beats Uganda in a pickup game by 60 points?

Yes.

[patteeu]

Originally Posted by Direckshun

Is the Dream Team massively successful when it beats Uganda in a pickup game by 60 points?

Yes. Are you saying that that wouldn't be a success?

[Direckshun]

Originally Posted by Donger

Yes.

I'm harder to impress.

[Direckshun]

Originally Posted by patteeu

Yes. Are you saying that that wouldn't be a success?

I'm saying, it wouldn't amaze me.

[Direckshun]

Originally Posted by patteeu

Feel free to explain it to me. Please use small words that I can easily digest.

You can overspend on the military, while either (a.) not spending enough of it on armament for our troops, or (b.) not dispensing enough of the armament you do have.

[Donger]

Originally Posted by Direckshun

I'm harder to impress.

Well, you should be. Our forces did in a few months what the Soviet Union failed to do in eight years. The weaponry we employed wasn't vastly different than the Soviets. We just fought more intelligently and didn't treat the indigenous forces like crap.

[patteeu]

Originally Posted by Direckshun

I'm saying, it wouldn't amaze me.

I wouldn't call your hindsight very amazing either. However, if we compare the results of our invasion with many of the predictions, "amazing" is an appropriate adjective.

[Amnorix]

Originally Posted by Iz Zat Chew

Are you really that dense? Yes, I'd say you are. We are currently at a low number, manpower wise, in the military. Obama said he wanted to fight smaller but fight smart, the smart he's talking about isn't decreasing the numbers but using the money spent on better weapons systems. Leaner, maybe but not at the cost of security. As for the Uganda comment, are you so slow that you can't see that it means any third world nation that wants to start some shit would be more of a threat than we might be able to handle if all of you lamebrains got your wish to cut the numbers.

Next time I'll use the sarcasm font but it won't matter as you still wouldn't get it.

Do Russia, China, Germany and England, all of whom have a military budget that is LESS than 25% of ours cower in fear when Ugana or Lichtenstein make threats?

The US military is so grossly and overwhelmingly powerful in every conceivable way and yet fuqtards like you act like cutting a penny would CLEARLY put the US in imminent danger of being overrun by Nicaragua or somesuch absurd bullshit.

It's no less maddening than people screaming that Social Security can't be touched -- well, it's gonna get touched because it's ****ing broken. It's not IF, it's WHEN.

[Iz Zat Chew]

Originally Posted by Amnorix

Do Russia, China, Germany and England, all of whom have a military budget that is LESS than 25% of ours cower in fear when Ugana or Lichtenstein make threats?

The US military is so grossly and overwhelmingly powerful in every conceivable way and yet fuqtards like you act like cutting a penny would CLEARLY put the US in imminent danger of being overrun by Nicaragua or somesuch absurd bullshit.

It's no less maddening than people screaming that Social Security can't be touched -- well, it's gonna get touched because it's ****ing broken. It's not IF, it's WHEN.

Again, you took the point of weakining our military wrong, but it's not all your fault. It's not Uganda we fear but the lesser armed and lesser feared countries that would like to take the U.S. down.

Our military may be grossly and overwhelmingly powerful in your eyes but your political position puts that comment in to much of a gray area. I doubt that fuqtards like you have any real concept of what the military has outside of the shining examples you see in the main stream media.

As for Social Security, who's been screaming in this thread about Social Security? Are you just trying to deflect from the general topic or add another argument? Social Security was established as an untouchable fund. I don't know how long you've been working in your lifetime and how much you might have added into the fund but if it had of been left alone there wouldn't be a problem. As it stands the liberal side of the political world placed that money in the general fund. In my eyes that debt the government has must be paid, not be cause someone is entitled to it but many Americans and their employers paid for it. If you want to cut some out of it you might start with illegals and those that didn't pay a dime into the fund ever and that is drawing a "full" social security check.

Of course, I'm sure you have a different view of the Social Security debaucle as you obviously don't feel that baby boomers should benefit because there are so many of them. I don't remember any one crying for them when the government took their money out of a protected fund and put it into the general fund. Remember, a large portion of the funds that was taken was from Baby Boomers.