Ben Stein, right-wing actor and speech writer in the administration of Richard Nixon, admitted on a TV talk show recently that the nation at that time was already in a recession but added that it would not become a depression and we will never again see another depression. That would seem to be a backhanded admission that the economic reforms instituted by regulation-loving, high-taxing big-government Franklin Delano Roosevelt in the 1930s are working as planned and that regulatory reforms work, the very reforms Stein's intellectual brethren on the right are trying to dismantle. We should also see that an important segment of the economy can damage the entire economy if allowed to do as it pleases; that is illustrated now by the petroleum industry.
This article looks at the historical economic performances of both left (Democratic administrations) and right (Republican regimes) in much of the 20th Century by using statistics and facts not opinion or propaganda. What we find may be surprising.
What is not surprising is that Republican to-be presidential nominee John McCain is campaigning on the same old same old GOP mantra about how to handle the economy with more tax cuts and more deregulation while the Democratic hopefuls are relatively silent about the Donkey's economic history. Al Gore wouldn't touch the subject in 2000 and John Kerry was equally as silent on the matter in 2004. Gore's stance was most egregious because he was inheriting the greatest economic advance in history and mentioned it naught.
The 2005 Economic Report of the President, with data dating back to 1960, revealed some truths the President probably wishes weren't made public. Such as:
"Big government" federal spending has increased about $35 billion annually under Democrats but $60 billion under Republicans. Spending will rise each year because of inflation and population growth but that doesn't justify the difference between the parties.
In a column in the Los Angeles Times after the report was released, then editorial-page editor Michael Kinsley wrote:
"Now look at federal revenues (a.k.a. taxes). You can't take it away from them: Republicans do cut taxes. Or rather, tax revenues go up under both parties, but only about half as fast under Republicans. This is true no matter when you start counting, or whether you give a president's policies that extra year to take effect. It's the only test of Republican economics that the Republicans win.
"That is, they win if you consider lower federal revenues to be a victory. Sometimes Republicans say that cutting taxes will raise government revenues by stimulating the economy. And sometimes they say that lower revenues are good because they will lead (by some mysterious process) to lower spending.
"The numbers in the Economic Report undermine both theories. Spending goes up faster under Republican presidents than under Democratic ones. And the economy grows faster under Democrats than Republicans. What grows faster under Republicans is debt."
Since 1960, the federal deficit has averaged $131 billion a year under the GOP and $30 billion for Democrats. In an average Republican year the deficit increased by $36 billion. In an average Democratic year it shrank by $25 billion.
"The national debt has gone up more than $200 billion a year under Republican presidents and less than $100 billion a year under Democrats. If you start counting in 1981 or attribute responsibility with a year's delay, the numbers change, but the bottom line doesn't: Democrats do Republican economics better than Republicans do," Kinsley wrote.
Both the deficit and debt will be distorted somewhat by the present administration because it pays for its war by off-budget borrowing and spending of hundreds of billions of dollars annually to mask the totals of both.
The gross domestic product from 1960 to 2005 (taking inflation into account) rose an average of $165 billion a year in 2000 dollars under Republican administrations and $212 billion a year under Democrats. On the average yearly rise in per capita income, Democrats score about 30% higher.
On inflation Democrats average 3.13 % versus 3.89% for Republicans. On unemployment (5.33% under Democrats versus 6.38% for the GOP). Unemployment fell in the average Democratic year, rose in the average Republican one.
Figures from the White House Office of Management and Budget (OMB), U.S. Department of Labor (DOL), and White House Council of Economic Advisors shows these facts as printed in The Milwaukee Journal Sentinel in late 2007 by Robert Weiner and John Larmet:
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.
• 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).
• 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.
Now the ugly truth about recessions. Since World War II, every Republican president has governed over a recession (Dwight Eisenhower had three; Richard Nixon had two, one he shared with Gerald Ford, and George W. Bush is building his second) while Harry Truman and Jimmy and Carter are the only Democratic Presidents with a recession, and Carter's was the shortest (6 months), the mildest and was caused more by oil embargoes than by policy. The recession count for the Dem team (Harry Truman, John F. Kennedy, Lyndon Johnson, Jimmy Carter and Bill Clinton) 2. For the GOP team (Dwight Eisenhower, Richard Nixon, Gerald Ford, Ronald Reagan, George Bush the Daddy and George Bush the Infantile) 9. And all this after the GOP gave us the Great Depression of the 1930s following recessions (during the Roaring Twenties for the wealthy) in 1923-24 for 14 months and 1926-27 for 13 months
Our recessions have been:
* November 1948-October 1949; 11 months. Truman, and partly due to post-World War II readjustments from wartime to peacetime production.
* July 1953-May 54; 10 months. Eisenhower.
* August 1957-April 1958; 8 months. Eisenhower.
* April 1960-February 1961; 10 months, Eisenhower. Ike's last recession ran into the first months of Kennedy's administration but JFK got the nation righted quickly.
* December 1969- November 1970; 11 months. Nixon
* November 1973-March 1975; 16 months. Nixon and Ford. The recession began under Nixon but Ford prolonged it by cutting government spending, thereby starving the economy and preventing recovery.
* January 1980-June 1980; 6 months. Carter.
* July 1981-November 1982; 16 months. Reagan, and marked by an unemployment rate of 10.8%, the highest since 1940 when the nation was not yet out of the Great Depression.
* July 1990-March 1991; 8 months; Bush the Daddy
* March 2001-September 2001; 6 months; Bush the Infantile. The recession had achieved the six-month mark of economic contraction that establish an official recession by Sept. 1, before the terrorist attacks in New York and Arlington, VA, so we credit Bush the Infantile with a six-month recession and not the economic problems that followed even though Bush's recession could have dragged on much longer.
* The present recession is unfolding; Bush the Infantile.
The developing recession might have been cut short had government concentrated on rebuilding and repairing the nation's infrastructure, buying US-made automobiles, computers, software, office furniture and more rather than handing out rebates that may not be spent in the economy. Republicans claim individual spending would end a recession but government spending is only waste. After the terrorist attacks of 2001, Bush pleaded for everyone to head to the malls and spend, spend, spend. Now he offers us rebates to spend as if that would be a magical cure while government spending the same money would be a disaster even though buying could be directed at the weakest parts of the economy.
During most of the 20th Century the Dow Jones Industrial Average increased by an average of about 10 percent annually, but under Democratic administrations the average has been in the 13-14 % range while only 6-7% under Republicans. And those figures don't include the spectacular rise in the Dow under Clinton.
Clinton was inaugurated on January 20, 1993, the day the Dow closed at 3242 and left office on January 20, 2001, when the Dow finished the day at 10,678.
When George Bush leaves office next January, the Dow will not have come close to matching the Clinton figures and may well be a loss.
In all fairness to the GOP, we must remember that the main reason it trails so dramatically in Dow Jones advances and job creation is because Republican administrations must spend an inordinate amount of time trying to dig out from under a recession that they created or allowed to happen in the first place.
Much has been written in recent years about "Reagan Democrats;" those undereducated, ill-informed workers of America clinging to issues that don't involve them. They obsess about such things as gay rights and same-sex marriages, abortion, prayers in public school and guns, and vote against their own best economic interests by electing politicians who send their jobs overseas, destroy their unions and middle-class wages, dumb down education for their children and destroy the environment in which they live.
But we also have the problem of corporations paying their leaders tens of millions of dollars annually in salary, bonuses and stock options to lead the businesses, but who use their wealth, influence and positions to help put into power politicians who promise tax cuts or elimination of regulations, even though whose policies actually harm the economy and negatively impact the corporations' performances. It seems the "best and brightest" of us are no more capable of seeing what's best for America than are the undereducated and ill-informed masses.
About here, an invitation should go out to Republicans, conservatives and libertarians to prove that they are better stewards of the economy than are Democrats using facts and statistics to prove their claims, but it seems the facts and figures have been used up showing which political party and political philosophy are the best on economic matters: that would be progressive Democrats.
This leaves us with an important question and that is: "Why are Democrats so reluctant, or afraid, to address this history with the American public?"