Saturday, November 11, 2006

Democrats better for the economy

Democrats are better for the economy based on the relative economic performance of the 11 post-World War II presidents along the following six dimensions:

  • Annual GDP growth
  • Annual growth in real disposable income
  • Annual growth in employment
  • Annual change in unemployment rate
  • Annual change in inflation rate
  • Annual change in Federal budget surplus

Here's how these 11 presidents rank (with their average ranks on the six dimensions):

  • 1. Bill Clinton (3.5)
  • 2. Lyndon Johnson (3.8)
  • 3. John Kennedy (4.2)
  • 4. Ronald Reagan (4.5)
  • 5. Gerald Ford (5.5)
  • 6. Jimmy Carter (6.3)
  • 7. George W. Bush (7.0)
  • 8. Harry Truman (7.2)
  • 8. Richard Nixon (7.2)
  • 9. George H. W. Bush (8.2)
  • 10. Dwight Eisenhower (8.3)

Based on this analysis, George W. Bush's economic performance is mixed. He is relatively strong in reducing the inflation and unemployment rates; whereas he is decidedly weaker in managing the Federal budget. While I don't want to muddy the waters of this analysis, my hunch is that inflation under the current president has been worse than reported. As Fed Chair Ben Bernanke recently commented, the inflation data are unreliable. And some believe that they don't seem to reflect the rising costs of health care, housing, and energy.

Let's look at how the current president ranks in each of these six areas compared to the top and worst performers.

Annual GDP growth

  • George W. Bush (7th): +2.71%
  • First: Lyndon Johnson +5.43%
  • Last: George H. W. Bush +1.90%

Annual growth in real disposable income

  • George W. Bush (10th): +2.81%
  • First: Lyndon Johnson +5.56%
  • Last: Harry Truman +2.38%

Annual growth in employment

  • George W. Bush (6th): +1,293,000
  • First: Jimmy Carter +2,506,000

Annual change in unemployment rate

  • George W. Bush (5th): -0.05%
  • First: John F. Kennedy -0.83%
  • Last: Gerald Ford +1.25%

Annual change in inflation rate

  • George W. Bush (3rd): -0.28%
  • First: Gerald Ford -1.42%
  • Last: Jimmy Carter +1.65%

Annual change in Federal budget surplus

  • George W. Bush (11th): -$65.0 million
  • First: Bill Clinton: +$47.7 million

Although Bill Clinton ranked first only on deficit reduction, his overall average rank on all six criteria was the highest of the lot.

2 Comments:

Blogger oli said...

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1:17 AM  
Blogger Neal said...

It's simplistic to impute economic omnipotence to the President. From your examples, it's pretty obvious the President has little effect on the economy during his tenure. Maybe his policies have a later effect, maybe not.

7:25 PM  

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