Even the Shutdown Can’t Kill Old Republican Fallacies

Annualized Growth in Real GDP per Capita, by President

Old fallacies die hard.

You would think, for instance, that Americans wouldn’t trust Republicans anymore. Poll after poll has shown that the American public holds them responsible for the government shutdown — and the American public hated the shutdown. Their approval rating plummeted to 21 percent, while President Obama’s held steady at 42 percent.

And yet, according to a Pew Research survey released at the end of the shutdown, Americans still believe that Republicans do a “better job dealing with the economy” than Democrats.

Clearly, it will take more than a two-week shutdown to kill the myth that simply won’t die.

And it is a myth. Since the government started collecting economic data around World War II, we have accumulated plenty of evidence to measure each party’s success at “dealing with the economy” — and none of it makes Republicans look good.

In their book Presimetrics: What the Facts Tell Us About How the Presidents Measure Up on the Issues We Care About, economist Mike Kimel and journalist Michael E. Kanell use this data to calculate the performance of the economy under every president from Dwight D. Eisenhower to George W. Bush. Here’s what they found…

Real GDP per capita. The most basic measure of economic success is the growth of output per person, adjusted for inflation. The fastest growth came in the Kennedy/Johnson years, when “real GDP per capita” grew 3.48 percent per year. The second-fastest came in the Clinton years, a strong 2.49 percent per year. Compare those numbers to laggards like Eisenhower and Bush Sr., who oversaw annual growth of 1.11 percent and 0.93 percent, respectively. When you add up all the Democratic years and all the Republican years, you find that the economy grew 2.82 percent per year under Democratic presidents and 1.54 percent under Republicans.

You may say, “What about the Great Depression? Aren’t they cherry-picking numbers by excluding the biggest economic event of the 20th century?” Actually, if you add Hoover, Roosevelt, and Truman, the Democrats’ average score goes up, and the Republicans’ goes down.

Another common criticism is that presidents inherit the problems of their predecessors. Should we really hold them responsible for the beginning of their term, when the economy’s fate is decided largely by the last guy’s policies? Fair enough. Let’s exclude the first year of each president’s term and recalculate the numbers. Guess what? Again, the Democrats’ score goes up, and the Republicans’ goes down.

Employment-to-population ratio. Instead of focusing on output, we could focus on jobs. Is the economy creating enough jobs to employ the same percentage of the population? Under Democrats, the employment-to-population ratio increased. Under Republicans, it decreased.

Real average weekly earnings. Often, economic growth doesn’t translate into the average American’s pocketbook. Why not look at weekly wages? Okay. Under Democrats, average weekly earnings, adjusted for inflation, increased. Under Republicans, they decreased.

Real median income. But wages only tell part of the story. Maybe Americans work more hours or get more income from investments. Let’s look at the average household — the “median” — and see how their inflation-adjusted income changed: Under Democrats, it increased much faster than it did under Republicans.

Real net average disposable income. But Democrats are known for raising taxes (and, indeed, Kimel and Kanell find that the tax burden went higher under Democrats than Republicans). What if all that income growth winds up in the government’s pocket, negating the gains? Let’s measure average income after taxes: Still, the Democrats oversaw much faster income growth than Republicans!

Poverty rate. Under Democrats, the poverty rate decreased. Under Republicans, it increased.

Real adjusted S&P 500. The stock market grew much faster during Democratic administrations than it did during Republican presidencies.

Value of the dollar. Under Democrats, the dollar appreciated, as foreigners invested more in us. Under Republicans, the dollar depreciated, as foreigners invested less.

Of course, the picture is incomplete. Someday, we will add the completed Obama presidency to the list, and the numbers will change. But already GDP growth under Obama is faster than it was under George W. Bush, and it’s only improving. The stock market is surging up, and the shutdown confirmed what the data has proven: Republicans do not do a “better job dealing with the economy.”

The longer we believe that fallacy, the more shutdowns and recessions we will invite.

==========

This op-ed was published in the South Florida Sun-Sentinel.

Don’t Attack Big Government Until You’ve Done the Math

“We have to get rid of Big Government,” said a friend of mine recently, as if it was obvious. I looked around the table and saw only nodding heads.

So I asked my friend: What exactly do you want to get rid of? Social Security? Oh no, she said.

Medicare? No. Medicaid? No. The Children’s Health Insurance Program? No. The Defense Department? No.

Then you don’t want to get rid of Big Government.

Those five programs make up two-thirds of the federal budget. They are Big Government, and the American people love them — even most of the people who say, “We have to get rid of Big Government.”

Of course, that’s not what she meant. When she said “Big Government,” she wasn’t talking about those programs.

She was talking about Obamacare, which will account for 3 percent of the federal budget in the coming decade. She was talking about food stamps, which comprise another 2 percent of the budget. She was talking about welfare, which takes up a whopping 0.4 percent.

I hope she wasn’t talking about the Department of Education, but even if she was, its budget is roughly the same as the amount allocated to food stamps.

So anyone who thinks they can “get rid of Big Government” by attacking these programs is either uninformed, lying, or very bad at math.

It’s exactly this kind of misunderstanding that allows politicians to foist their radical agendas on an unwilling public.

Witness the “sequester” debate. Why is the government planning to cut its spending by $1 trillion over the next decade, starting with an $85 billion cut to this year’s budget that takes effect on March 1? Because people are somehow under the impression that it has grown too big.

It’s hard to square that belief with this week’s report from the Congressional Budget Office. It shows the size of our federal government relative to the overall economy, and believe it or not, it’s been shrinking for many years!

This year, the federal government will spend 22 percent of our nation’s income, the same as it did in 1981. In fact, throughout most of Ronald Reagan’s two terms in office, federal spending was higher, as a percent of our nation’s income, than it is today.

It wasn’t until Bill Clinton came into office that our government made a consistent effort to shrink the size of government. Remember Clinton’s 1996 State of the Union? “The era of big government is over.” It sure was. By the end of his term, the federal government spent less money, relative to the size of the overall economy, than at any time since the mid-1960s.

George W. Bush reversed that trend, but even Bush’s government paled in comparison to Reagan’s. In 2007, federal spending was 19.7 percent of our nation’s income, a far cry from the peak of 23.5 percent in 1983.

That’s a quarter of a century during which our federal government was smaller than it used to be.

That ended with the Great Recession, of course. When Bush left office, he handed over the reins to 24.4 percent of our nation’s spending.

But most of that increase was temporary. Just as economists predicted, that number has fallen, and it will continue to fall as the economy improves and grows faster than the government.

And that’s why the sequester is a misguided attempt to fix an illusory problem. The federal government has not gotten bigger in the last three decades, and it’s only getting smaller.

There is one part of the budget that’s been growing, however, and that’s health care. As medical costs grow faster than inflation, so do the budgets of Medicare, Medicaid, and CHIP. If you want to slow the long-term growth of the government, that’s the problem you have to solve.

But don’t take it out on innocent programs that have nothing to do with the budget deficit and even less to do with so-called “Big Government.”

========

This op-ed was published in today’s South Florida Sun-Sentinel.

Barack Obama Is Not the “Ice Cream President”

There’s an email making the rounds that tells a story about two little girls who run for class president in grade school. One girl works hard, runs a good campaign, and promises to do her best if elected. The other girl promises to give everyone ice cream. The teacher asks the children how they’ll pay for the ice cream. They have no idea, but they vote for the ice cream girl anyway.

That, says the email, is how Barack Obama won the election. He promised to give away free stuff that we can’t afford.

Bill O’Reilly got the ball rolling on this theory when he said, “It’s not a traditional America anymore, and there are 50 percent of the voting public who want stuff. They want things. And who is going to give them things? President Obama.”

Earlier that day, a Romney supporter told me that he expected his candidate to lose because Obama “bought” votes by “giving away” food stamps and welfare.

We have such short memories.

It was the Republican president George W. Bush who expanded eligibility for food stamps in the 2002 farm bill. It was 99 Republican representatives who voted to expand the program further in the 2008 farm bill. And it was that same Republican president who waived one of the work requirements for 32 states in November 2008.

That’s why the food stamp program added more recipients under Bush than it did under Obama.

The welfare claim is even more ridiculous. We may not remember the food stamp expansion under Bush, but surely we remember welfare reform under Bill Clinton. In 1996, Congress ended “welfare as we know it” and replaced it with “Temporary Assistance for Needy Families” (TANF), a program whose budget hasn’t changed in 16 years. It was $16.6 billion in 1996, and it’s $16.6 billion today.

In the year before welfare reform, 4.7 million Americans received assistance from the program. Today, only 2 million receive assistance from TANF.

When TANF was created, 68 percent of families with children in poverty received welfare. Today, only 27 percent get it.

Low-income entitlement spending has increased, but it would’ve increased under any president. Most of it is what economists call “automatic stabilizers” because they automatically increase during recessions. More people become unemployed. More people fall into poverty. More people lose their health insurance. So more people qualify for unemployment insurance and food stamps and Medicaid.

Since the end of the recession, low-income entitlement spending has been falling. In the next decade, the Congressional Budget Office says that it will return to the same level it’s been for the last forty years: a little more than 1 percent of our nation’s income. If you exclude health care, where costs are rising for completely separate reasons, the CBO expects low-income entitlement spending to fall below its forty-year average in coming years.

The CBO is making these projections, of course, based on the Obama administration’s budget. The president who is supposedly giving away free stuff, it turns out, is actually planning to reduce low-income entitlements.

What’s particularly galling about the Republicans’ argument is that Romney was the candidate who couldn’t explain how he’d pay for everything he was promising. Romney was the candidate who wanted to add a $480 billion tax cut to a $1.3 trillion deficit. Romney was the candidate who wanted to add $200 billion in new Pentagon spending every year.

It was the Republican president George W. Bush who turned a surplus into a deficit. It was Bush who took the nation into two wars while passing two massive tax cuts. It was Bush who signed Medicare Part D without figuring out how to pay for it.

Are we all suffering from a collective bout of amnesia?

The Romney camp’s explanation for their electoral loss fits right in with the broader picture they tried to paint of the Obama presidency. In their world, Barack Obama “has fundamentally changed the relationship between government and the people of this country,” as Jon Stewart put it in his debate with O’Reilly.

But it’s simply not true.

And the truth matters. Obama didn’t win the election because he’s giving away free stuff, and perpetrating such a myth only serves to obscure what’s really going on and what really needs to be done in Washington.

==========

This op-ed was published in today’s South Florida Sun-Sentinel.

Quote of the Day: Richard Schiff

I am not an Obama fanatic. I did not favor a surge in Afghanistan; didn’t support the nature of the financials bailouts; wanted universal health coverage; wanted proper prosecution of the thieves of Wall Street, believe the war on drugs must end yesterday.

But here, now, just shy of four years later I can look back and I can have respect for this man. He said he was going to bail out Detroit and he did; he said he was going to pass the stimulus package to stave off loss of jobs and rebuild infrastructure and he did; he said he was going to surge in Afghanistan to facilitate a later winding down of that war and he did; he said he was going to end the inane war in Iraq and he did. He passed Obamacare like he said he would. He reversed the loss of job growth trend like he said he would. He extended unemployment benefits and helped folks keep their homes like he said he would. And on and on it goes.

— Richard Schiff