A Simple Fact: Republicans Can't Manage the Economy

sweetpotato

A Simple Fact: Republicans Can't Manage the Economy
By Robert Weiner and John Larmett
Posted on August 20, 2007, Printed on August 22, 2007
http://www.alternet.org/story/60217/

At last week's news conference, President Bush again said that he's reduced the deficit to $239 billion, created 8 million jobs and generated unemployment at a low 4.5%. He said the economy is strong, largely due to his tax cut policies. On the other side, Rep. David Obey (D-Wis.), House Appropriations Committee chairman, has complained of our limited resources now because of Bush's "gargantuan deficits he created with that stupid war and those stupid tax cuts paid for with our money."

There is a widely held belief that Republicans are better for business than are Democrats. Let's look at the facts. The wild stock market ride of recent weeks does not compare to the two worst stock events, the crash of 1929 and the 1987 free fall, which also occurred under Republican administrations. Since 1900, Democratic presidents have produced a 12.3% annual return on the S&P 500, Republicans only 8%. Gross Domestic Product growth since 1930 is 5.4% for Democratic presidents and 1.6% for Republican presidents.

Bush inherited from President Clinton an annual federal budget surplus of $236 billion, the largest in American history. Clinton balanced the budget for the first time since 1969. Budget surpluses were expected to total $5.6 trillion between fiscal year 2002 and 2011.

Despite this, Bush transformed the surpluses into a $1.1 trillion annual deficit in just three years because of the Iraq war and his relentless push for permanent tax cuts for wealthy Americans, a new iteration of Herbert Hoover's equally catastrophic "trickle-down" theory. Bragging about a $239 billion deficit sets such a low standard that Bush can claim horrific failure as a good thing for the country. The Bush administration's annual loss of three-quarters of a trillion dollars is unprecedented. Bush presided over the loss of 2 million American jobs in his first 2 1/2 years and has net gained 5.6 million in six years, the worst since Hoover. Clinton created 23 million jobs.

It's not rocket science to figure out the difference. Clinton: tax breaks for the middle and lower incomes who actually spend the money, no Iraq war. Bush: disproportionate tax breaks for the wealthy (50% to the wealthiest 1% by 2010), $750 billion for a war monetarily benefiting only a few military contractors and a financial sieve for the country. Democratic presidents spread the wealth through spending on needed social programs and targeting tax cuts to lower- and middle-income Americans, stimulating the economy more broadly. Republicans pump into defense contractors and high-income Americans, creating a significant detriment to the whole economy with larger deficits and higher interest rates.

Economist John Maynard Keynes was right in 1936: When you "prime the pump" into people programs (like jobs or lower income tax cuts to help Americans buy what they need), you get people results. On the other hand, when you move money from the economy into tax cuts for the rich and a military vacuum, you don't prime the economic pump; you deplete it.

Contrary to opinion, we do not have record high stocks. It would take 14,300 for the Dow Jones industrial average just to match for inflation the 11,750 under Clinton in 2000. We're now around 13,000, meaning, in real terms, a stagnant market with a loss for the past six years. Democrats empower the buyers, Republicans the sellers. Misdirected tax cuts, plus the Iraq war, have taken the money not just from America's working class but from America's businesses as well.

Economic Indicators: Democratic Versus Republican Presidents

In six major criteria - GDP growth, per capita income growth, job creation, unemployment reduction, inflation reduction, and federal deficit reduction - for the ten post-World War II presidencies until Bush, there is a record to track the reality of Democratic versus Republican economic success.

Democrats

Lyndon B. Johnson's "Great Society" created robust economic expansion, first in both GDP and personal income growth. He also reduced unemployment from 5.3% to 3.4%. Economic growth remained robust through most of LBJ's presidency.


John F. Kennedy campaigned on the idea of getting America moving again, and he did. Under Kennedy, America entered its largest sustained expansion since WWII. GDP and personal income growth were second only to Johnson, all with minimal inflation. Contrary to Republican attempts to say Kennedy's tax cuts are like Bush's, Kennedy's were targeted at middle and lower incomes.


The economy added 10 million jobs under Jimmy Carter despite high inflation; Carter ranks first in job creation next to Clinton during just four years in office. Carter also reduced government spending as a percentage of GDP.


Harry Truman's second term saw the fastest GDP growth and the sharpest reduction in unemployment of any president surveyed (of course, FDR's post Hoover-depression New Deal jobs are first).


Republicans


Ronald Reagan focused on reducing the cost of capital through cutting tax bracket highs for the rich and reducing the size and scope of government. But, instead of lowering spending, Reagan shifted money to the military (i.e. Star Wars) and the deficit tripled with the tax cuts and military spending - as under Bush II.


Under Gerald Ford, the deficit soared and the unemployment rate grew from 5.3 - 8.3% in just 2 years. His "WIN" (Whip Inflation Now) buttons were no match for economic inactivity.


It was under Richard Nixon that inflation started to spiral out of control, from 4.4% to 8.6%, and the deficit shot up from $2.8 billion to $73.7 billion.


The Eisenhower years were characterized by slow growth (2.27% annualized GDP growth) and relatively high unemployment (7.7% at end of term).


George H. W. Bush had the poorest record for both GDP and income growth. During his single term, the deficit ballooned (from $152 billion to $255 billion) more than under every president but his son and Ford.

(Sources: White House Office of Management and Budget (OMB), U.S. Department of Labor (DOL), and White House Council of Economic Advisors)

mammasan

Neither can Democrats.

hodge

i laugh in the face of every single american that voted for him for a 2nd term

Pacomc79

a fair argument, but it depends on the perspective of the writer and the writers feelings on the role of government.

Of late, the republicans have done a remarkably poor job and none of them are fiscally conservative anymore so instead of shrinking government and returning capital to the people paying the taxes (growing the enonomy through investment and job growth etc.) they are attempting to play both sides, growing vastly the size and scope of government and cutting taxes.... a 5th grader could tell you that's a recipie for disaster.

The Neo Conservative ideal (generally post WW2 nation building domino theory etc) is the cause of a lot of the debt.

Democrats are no better. Essentially the same thing just on an opposite side of the spectrum, with the same fiscal irresponsibility.

The answer to everything is NOT more National government. Want a strong economy? Keep the government protectorate and make it a watch dog, make it efficient and accountable whether you are talking about social programs or defense. Let the states handle most of the governmental duties not dealing with interstate commerce or defense. Let the majority of day to day government be directly accountable to the local people around it that is when government is most effective.


Basically this amounts to a hill of beans because this government has been designed over the last century to keep people dependant on it and keep the people that are in power...in power.

surferdude

The economy's not something you can manage. The government can't regulate supply or consumption of the economy, hence they do not control it. They have a little influence on it but that's about it.

chopitdown

Ronald Reagan- democratic house all 8 years; democratic senate 2 years
Gerald Ford- democratic house and senate for 2 years
Richard Nixon - democratic house and senate all 6 years
Eisenhower - democratic house and senate for 6 years
George H. W. Bush - democratic house and senate for 4 years

it's not just the republicans

jeffbr

Pretty fucking stupid article for anyone who lived through the Carter & Reagan years.

Color it how you want. Carter created a malaise. Double digit interest rates, double digit inflation. The economy what totally shit. I remember sitting in long lines trying to get gas. Job creation is your sole measure of managing the economy?

Under Reagan there was lots of innovation. Confidence in the economic turnaround created new businesses and the US reasserted it's economic superpower status. He spent too much on the military and Star Wars, granted, but things ticked along just fine for the most part. Bush, Sr. managed to fuck things up.

Clinton was a caretaker President who mostly stayed out of the way of the tech boom and let it ride. He didn't do anything particularly innovative, but didn't screw things up either. Didn't really play a role one way or the other. Strictly a caretaker.

G.W. has carried on his father's tradition completely fucked things up economically, but both parties play a role. Congress and the President are responsible for out of control spending, funding of idiotic programs, prosecuting stupid police actions and wars, etc...

my2hands

it appears as though Republicans cant run ANYTHING!

know1

I don't want the government to manage the economy.

sweetpotato

know1 wrote:

I don't want the government to manage the economy.

that's called a free market utopia. this is called the real world. welcome. please sign the guest book.

sweetpotato

surferdude wrote:

The economy's not something you can manage. The government can't regulate supply or consumption of the economy, hence they do not control it. They have a little influence on it but that's about it.

you're even more naive here than in the black-on-white crime thread. :rolleyes:

surferdude

sweetpotato wrote:

you're even more naive here than in the black-on-white crime thread. :rolleyes:

Oh please, Grand Poobah please enlighten us with your wisdom. And when you're done enlightening us in this thread you could try to enlighten us in the race thread. We are in need of your wisdom, it's a surprise we've lasted so long without it. But it was surprising to see that one as wise as you could not even recognize the use of sarcasm.

sweetpotato

surferdude wrote:

Oh please, Grand Poobah please enlighten us with your wisdom. And when you're done enlightening us in this thread you could try to enlighten us in the race thread. We are in need of your wisdom, it's a surprise we've lasted so long without it. But it was surprising to see that one as wise as you could not even recognize the use of sarcasm.

high-five, nigga.

know1

sweetpotato wrote:

that's called a free market utopia. this is called the real world. welcome. please sign the guest book.

OK - then I'm in favor of the least amount of government intervention possible.

OutOfBreath

know1 wrote:

OK - then I'm in favor of the least amount of government intervention possible.

Well, compared to the rest of the world, I think you are it. Truly. Now that low intervention creates tons of problems for you that are not as bad elsewhere, but you certainly have some of the least intervention in percentage of GDP, privacy rights and whatnot.

Peace
Dan

Indian Summer

It kills me how many Middle Class Americans vote Republican...I mean this is the political party that wants a bigger gap between the rich and the middle class. The rich get richer, the poor get poorer....it never ends.

gue_barium

Indian Summer wrote:

It kills me how many Middle Class Americans vote Republican...I mean this is the political party that wants a bigger gap between the rich and the middle class. The rich get richer, the poor get poorer....it never ends.

What saddens me is that some of the better Americans in politics are Republicans, yet I've come to find they invariably follow the lead dog, regardless. I don't understand that part of the Republican brain make-up.

RolandTD20Kdrummer

If most Republicans are like O'reilly and Hannity then I think they have anger issues towards others, and an overall anti-humanity perspective..

Sprinkle in a little Jesus saves, and oh shit...

Hartydog

Indian Summer wrote:

It kills me how many Middle Class Americans vote Republican...I mean this is the political party that wants a bigger gap between the rich and the middle class. The rich get richer, the poor get poorer....it never ends.

okay but you seem to be linking voting with only personal economic concerns. I think that there are more than a few other variables involved

Indian Summer

Hartydog wrote:

okay but you seem to be linking voting with only personal economic concerns. I think that there are more than a few other variables involved

I'm sure there's not way to prove it...but I have a feeling that the majority of voters care mostly about the economic side of politics....I know that it is about 60% of what I first look at when it comes time to vote...because it directly affects me and my lifestyle.

Pacomc79

Indian Summer wrote:

It kills me how many Middle Class Americans vote Republican...I mean this is the political party that wants a bigger gap between the rich and the middle class. The rich get richer, the poor get poorer....it never ends.

Not exactly. What both major parties want is a huge gap between the ultra rich and the dependants on government, that way they can continue to be extremely wealthy and in power and control every aspect of the public life. See Hugo Chavez.. throw the poor people a few bones and they love you while you rob them blind on the back end. Whether it says D or R by the name that's pretty much the story. Republicans tend to focus on logic and money. Democrats tend to focus on emotion and social rights. Both sides need each other and they have realized that on some level they just like to have these big phony public fights so people on either side of the issue feel like they are rooting for a sports team.

It's all bullshit, the public gets fucked regardless mostly because they don't care or aren't smart enough to care....enter the federal department of ahem...education.

The idea of freedom requires a great amount of work most people don't really value freedom.