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.

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

The Great “Fiscal Responsibility” Hoax

You’re probably worried about the federal budget deficit. Seven out of every ten American voters say the deficit plays a “very important” role in deciding whom to vote for.

And you probably think that Mitt Romney is the candidate who would do a better job of reducing the deficit. In this category, voters favor him over Obama, 51 to 37. That’s a big gap, considering the national polls are a statistical tie.

Even the South Florida Sun-Sentinel believes the hype. One of the reasons they gave for endorsing Romney was to “exercise…fiscal discipline” and “get government spending under control.”

They’ve been had. You all have.

The belief that Republicans are more fiscally conservative than Democrats is an old one. It’s so deeply ingrained in the American myth that it’s hard to know where it started. But it’s completely, factually, undeniably wrong — and has been so for awhile.

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 calculate the change in government spending under every president from Dwight Eisenhower to George W. Bush.

They found that government spending, relative to the size of the economy, increased much faster under Republican administrations than under Democratic ones. George W. Bush presided over a greater increase in government spending than any president since Lyndon Johnson, and George H.W. Bush wasn’t far behind. Bill Clinton, in contrast, was the only president since Eisenhower to actually reduce government spending. Even Reagan didn’t do that.

Since Mitt Romney has promised to increase the Pentagon budget by $2 trillion over the next decade, I find it hard to believe that he would be any different from his Republican forebears.

Kimel and Kanell also report how the budget deficit fared under each president. Here’s where the “fiscal responsibility” myth really falls apart: The Republicans increased the deficit, while the Democrats reduced it!

The least “fiscally responsible” administrations were Bush Jr., Bush Sr., Ford, and Nixon. The most deficit reduction came under Clinton and — believe it or not — Jimmy Carter.

In fact, the only presidents in this group who added to our national debt burden were Reagan and the two Bush’s. Everyone else presided over a decline in government debt, relative to the size of the economy.

For goodness sake, they said so straight to your face.

“I am not worried about the deficit,” said Reagan. “It is big enough to take care of itself.”

“Deficits don’t matter,” said Dick Cheney.

So, when economists complain over and over and over that Romney’s math doesn’t add up, they’re not just making an academic point. When Obama asks him how he’d pay for a $5 trillion tax cut, the fact that he can’t answer — the fact that every fact-checker in the known universe has said that his tax plan will blow up the budget deficit — is a flashing red warning sign that he will do what Republican presidents have been doing for half a century.

Which brings me to his opponent, Barack Obama.

On January 7, 2009, two weeks before Obama was sworn into office, the Congressional Budget Office reported that George W. Bush was bequeathing a budget deficit of $1.2 trillion. This year, the deficit is $1.3 trillion.

In other words, 92 percent of the deficit that everyone blames on Obama was actually inherited from his predecessor.

Here are the facts: In Reagan’s first term, government spending grew 8.7 percent per year. In his second term, it grew 4.9 percent per year. Under Bush Sr., 5.4 percent per year. Under Clinton’s two terms, 3.2 percent and 3.9 percent. Under Bush Jr., 7.3 percent and 8.1 percent.

Got all those numbers? Okay. Brace yourself. Under Obama: 1.4 percent.

Our current budget deficit has nothing to do with out-of-control Democratic spending and everything to do with a massive recession, tax cuts, two wars, and a scare campaign that Republicans have been successfully waging for decades to cover up their serial fiscal irresponsibility. Whether you let them fool you again is entirely up to you.

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