Posts Tagged ‘economy’

So you’re at the gym and you run into the local former Naval intelligence analyst–you know, the guy who never fails to remind you that he was an intelligence analyst because it makes it him sound both intelligent and capable of thoughtful analysis. In the course of the conversation, you mention that you recently read an article explaining that since 1900 unemployment has been much worse, on average, during Republican administrations than Democratic ones; and that more recessions have started under Republicans than Democrats.

This causes the intelligence analyst to go silent for a few seconds, eyes blinking, until he utters his favorite one-word response when confronted with facts for which he has no counter. “Bullshit,” he says, expecting (hoping) that this will put an end to the conversation and you will go away.

Ah, but this time you pull out your iPad and point out the interesting passages from the article (highlighted in bold below), which is based on research conducted by Dr. James Gilligan in the course of writing his book, Why Some Politicians Are More Dangerous Than Others. His book shows that the rate of lethal violence rises under Republican presidents and falls just as consistently under Democrats. What might explain this correlation? “According to Gilligan, criminologists and public health experts have long been aware of another striking set of data that reliably parallels increases in murder and suicide when traced over the past hundred years: the rate of unemployment.”

Noting the apparent congruence between unemployment, economic inequality and recession across one dimension, and lethal violence across another, Gilligan put together his own statistical picture of economic conditions under American presidents since 1900, using data compiled by both the Bureau of Labor Statistics and the National Bureau of Economic Research. He saw what other academics and journalists have remarked upon from time to time (including me, in a 2003 book titled Big Lies) — namely that unemployment rates have gone up during every Republican administration and gone down during every Democratic administration, without exception. Every time a Republican president left the White House, unemployment was higher than when he came in, while the opposite was true whenever a Democratic president completed his term. Rates of unemployment stayed higher for longer periods under Republicans too.

Then he did some simple addition: “If we count up the net sum of all the increases that occurred during Republican administrations from 1900 through 2008, we find that the Republicans brought about a cumulative increase of 27.8 percent in the unemployment rate, and the Democrats an almost exactly equal decrease of 26.5 percent.” The net cumulative difference in the partisan effects was a staggering 53.8 percent. He also calculated the cumulative difference in duration of unemployment among the jobless during Republican and Democratic administrations, and again the numbers are enormous. From 1948 to 2003, Republicans oversaw a net cumulative increase of 24.6 weeks of unemployment, while Democrats oversaw a net decrease of 13.6 weeks — a difference of 38.2 weeks, or almost ten months.

Why is the unemployment record of the Republicans so awful? When Gilligan looked up the tabulations of expansion and recession tabulated by the National Bureau of Economic Research — an organization that was headed for many years, as he notes, by the conservative economist Martin Feldstein — he found a simple answer. The NBER numbers show that “from 1900 through October 2010, the country suffered approximately three times as many months of recession during the times Republicans were governing the country as during the times Democrats were: 246 months (more than 20 years) compared with 86 — a discrepancy that could not have happened by chance more than one time out of 10,000.” Moreover, recessions began 17 times during Republican presidencies and only six times during Democratic presidencies, and always lasted several months longer under Republicans as well.

Now, you explain to the intelligence analyst that you don’t actually subscribe to the notion that presidents have direct control over the economy, but the correlation, over the course of more than a century, seems greater than could be explained by chance. And besides, conservatives are always–always–yammering on about how Democrats are terrible for the economy and Republicans are great, so you found this information curious. The intelligence analyst blinks a few more times, mutters “Bullshit,” and walks away. Yup, the conversation is over.

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Another conservative-led state underperforms:

Wisconsin ranked 40th in the nation in private-sector job growth during the one-year period between September 2013 and September 2014, according to the latest detailed job numbers from the federal Bureau of Labor Statistics.

The numbers come from the Bureau’s Quarterly Census of Employment and Wages, which economists say is the gold standard of job metrics. Because the QCEW is so thorough, the numbers take a long time to report.

They showed Wisconsin added private-sector jobs at a rate of about 1.16 percent from September 2013 to September 2014. By comparison, private-sector jobs grew by 2.3 percent nationwide.

All neighboring states fared better than Wisconsin, and when matched up against a broader region of 10 Midwest states, only Nebraska fared worse.

The Walker administration also released less-accurate monthly job estimates early Thursday morning, which were much more positive. They showed Wisconsin’s unemployment rate dropped to 4.8 percent in February of 2015.

Not only is the state faring poorly due to Governor Scott Walker’s policies, he also feels the need to lie about it. How typically conservative.

As 2014 comes to an end, Republicans around the country should be rejoicing in the amazing track record of President Obama, who has accomplished the 2012 Republican presidential candidates’ agendas far faster than they themselves promised they would have!

From Steven Benen:

* The Romney Standard: Mitt Romney said during the 2012 campaign that if Americans elect him, he’d get the unemployment rate down to 6% by 2016. Obama won anyway and the unemployment rate dropped below 6% two years faster.

* The Gingrich Standard: Newt Gingrich said during the 2012 campaign that if Americans re-elected the president, gas prices would reach $10 per gallon, while Gingrich would push gas down to $2.50 a gallon. As of this morning, the national average at the pump is a little under $2.38.

* The Pawlenty Standard: Tim Pawlenty said trillions of dollars in tax breaks would boost economic growth to 5% GDP. Obama actually raised taxes on the wealthy and GDP growth reached 5% anyway.

Fantastic job, Mr. President!

Of course, sadly for Republicans, their own agenda was achieved via some, er, um, unorthodox methods (at least to them). I mean, President Obama and Congress allowed most of the Bush tax cuts to expire, and taxes even increased for the very richest among us.

Republican members of Congress spent much of the beginning of 1993 warning that raising taxes on the rich would destroy the economy.

“It will kill jobs, kill businesses, and yes, kill even the higher tax revenues that these suicidal tax increasers hope to gain,” Rep. Christopher Cox said.

And cut to the best job growth of the century — over 22 million jobs — and the first budget surplus in generations.

Of course, the nineties were an anomaly, with the end of the Cold War and the government’s decades-long investment in the internet suddenly paying off exponential returns. You can’t expect those kinds of returns again.

Cut to 2013, when President Obama’s re-election allowed most of the Bush tax breaks to expire with Republicans making similar warnings.

The result? Well, it wasn’t the best job creation of the century – yet. The 2,331,000 jobs created in 2013 was shy of 2005’s 2,506,000, which was fueled by the tens of billions of dollars the Bush Administrations flushed into defense and Homeland Security. I’d argue that 2013’s job growth could have beaten 2005 if not for Congress allowing a payroll tax to expire as the sequester went into effect. And don’t forget the how the GOP shut down the government for no discernible purpose.

In 2014, taxes again went up on those in the top percentiles to fund the Affordable Care Act. And with that money we were able to help 10 million Americans gain health insurance.

The result? According to the Labor Department, 2014 has already surpassed 2005 as the best year of job growth this century with 2,650,000 jobs projected to have been created through November.

Democratic policies that ask the rich to invest in our economy is the only way we ever created middle class jobs and it pays off for the rich.

“The U.S. economy not only grows faster, according to real GDP and other measures, during Democratic versus Republican presidencies, it also produces more jobs, lowers the unemployment rate, generates higher corporate profits and investment, and turns in higher stock market returns,” Princeton University professors Mark W. Watson and Alan Blinder have found. “Indeed, it outperforms under almost all standard macroeconomic metrics.”

Then there’s the terrible reality that the economy is growing despite the fact that millions of Americans are obtaining health care for the first time. In fact, I have conservative relatives who hate ObamaCare so much that they complain about the bureaucratic hoops they had to jump through to obtain the subsidies that allowed them to actually afford health care. The horror!

And let’s not even get started with all those “job killing” regulations that Americans are swimming in. Yes, we would all have been better off letting the Republican president slow things down in the name of ideology.

UPDATE

And let’s not forget the stock market. The Dow passed 18,000 a few days ago, which brings to mind the words of former George W. Bush adviser Michael Boskin, who on Mar. 6, 2009 penned an op-ed in the Wall Street Journal titled “Obama’s Radicalism Is Killing the Dow.” As Matt O’Brian writes in the Washington Post:

Boskin, though, didn’t think that this once-in-three-generations financial crisis was to blame for the market meltdown. Instead, he blamed it on Obama for … talking about raising taxes? “It’s hard not to see the continued sell-off on Wall Street and the growing fear on Main Street,” Boskin philosophized, “as a product, at least in part, of the realization that our new president’s policies are designed to radically re-engineer the market-based U.S. economy.” What followed was the usual conservative jeremiad against higher taxes on the rich, lower taxes on the poor, and deficit spending. Obama’s trying to turn us into Europe, and that’s why markets are pricing in the possibility of a Great Depression—not the dying economy he inherited.

Stocks bottomed on March 9, three days after the op-ed, as the Federal Reserve’s bond-buying and the Treasury’s stress tests restored confidence in the financial system. Then the stimulus started to kick in, putting enough of a floor under the economy that it began growing again that summer. It’s been a nasty, brutish, and long recovery, but unemployment is finally back under 6 percent and the economy is now growing at its fastest pace in over a decade.

Add it all up, and Obama’s radicalism has killed the Dow to the tune of a 171 percent return since Boskin’s op-ed.