It's the Economy, Stupid

[DrChinese]

While Bush has been invading other countries, he has been giving the U.S. economy only scant attention. This is shown by the federal unemployment statistics (http://www.bls.gov/cps/prev_yrs.htm), among other things.

When Clinton defeated George Bush Sr. in 1992, the rate was 7.5% (only Reagan and Ford gave us a higher unemployment rates since WWII). During the years Clinton was in office, the unemployment rate DECLINED every year, ending up at 4.0%.

On the other hand: Since George W. Bush was elected, the unemployment rate has INCREASED every year, ending up at 6.0% currently. 8.8 million Americans are out of work at this time.

The moral of the story: Democratic presidents are good for employment, Republicans bad for employment. How's that for black and white!!

[Segnosaur]

Originally posted by DrChinese
While Bush has been invading other countries, he has been giving the U.S. economy only scant attention. This is shown by the federal unemployment statistics (http://www.bls.gov/cps/prev_yrs.htm), among other things.


Actually, I think the less interaction a government has with the economy, the better. Governments are, for the most part, incompetent. Its better to have Bush working on foreign stuff than have him mucking about at home.

That said, a few things need to be stated:
- The economy is cyclical. You expect upturns and downturns. The huge expansion that occured over the past decade was not sustainable, and had to come down some time. Bush happened to be in power when it happened.

- Even if Bush had not invaded Iraq, there were still a lot of negative influences out of his control.... 9/11, The anthrax scares and the washington sniper attacks were all unexpected

- The president doesn't have absolute power. The economy did well under Clinton, but how much of that success was due to Republican actions in the house and Senate? (Of course, the Republicans control everything right now, so Bush should have an easier time getting his policies past.)

- Bush hasn't totally ignored the economy. (You may not have agreed with his actions, but that doesn't mean he hasn't done anything.) He's pushed for tax cuts (which might get watered down by Congress), and he brought in laws to try to stop more Entron-type problems.)

- Economic changes happen slowly, and positive effects from government policy may not be felt for years afterwards, even after the original instigator is out of power. In fact, that's what happened here in Canada. We had a 'Progressive Conservative' government in power about a decade ago, who brought in tax changes and free trade (not very popular at the time.) They were replaced by a 'Liberal' government (who originally was against the policies, but when they got in power kept them as their own), and its believed that those changes helped improve Canada's economy greatly. So, the Conservative government took the action, but it was another party (the Liberals) which reaped the rewards.

That said, I don't think Bush is perfect, and he has made some bad economic mistakes. (The biggest, in my opinion, was letting Microsoft off the hook.) But, I'm going to wait a few years before I blame anyone for U.S. economic problems.

[Cleopatra]

Originally posted by DrChinese
The moral of the story: Democratic presidents are good for employment, Republicans bad for employment. How's that for black and white!!

LOL ! Come on Doctor!!! Unemployment doesn't pop-up overnight! "Some people" have been working hard for the previous 8 years to arrive to such results ;)

[Samus]

Originally posted by DrChinese
When Clinton defeated George Bush Sr. in 1992, the rate was 7.5% (only Reagan and Ford gave us a higher unemployment rates since WWII). During the years Clinton was in office, the unemployment rate DECLINED every year, ending up at 4.0%.

The moral of the story: Democratic presidents are good for employment, Republicans bad for employment. How's that for black and white!! Oh brother! That's like me saying ice cream consumption increased in the past three years, therefore ice cream consumption is bad for the economy.

Excuse me, Reagan gave us higher unemployment rates? I believe Carter is the president that handed Reagan an economy in shambles.

Not to mention it was during the Reagan years that inflation and unemployment rates became more consistently low, instead of double-digits.

Should I dare to mention that the economy moves in cycles, and that the downturn that we are seeing the effects of now started in 2000?

I'm not defending the economic actions of any given president, but rather, pointing out how illogical your argument is. The state of the economy has just as much to do with documented cycles and who has control of Congress as it does with who is president.

[Dancing David]

I dunno, Republican in the White House , economy bad. Democrat in the White House economy good.

Makes sense to me!

(Face it it is just a crap shoot, but Dubya has tanked the economy!)

George The Second however may have laid the groundwork for Bill's sucsess.

Nixon is the one who put the economy in the tank for Ford and Carter.


I remeber Ronbo's tenancy in the White House , economy bad.

Peace
dancing david

[dsm]

Originally posted by dwb

I'm not defending the economic actions of any given president, but rather, pointing out how illogical your argument is. The state of the economy has just as much to do with documented cycles and who has control of Congress as it does with who is president.


But, whether you're Republican or Democrat, it's so much easier to shoot the man at the top...

:D

[crackmonkey]

Was this thread intended to be taken seriously? I mean, it's so blatantly illogical that it HAS to be a joke... right? Right?

[corplinx]

Ive always thought the best aspect of Clinton's presidency is that he totally ignored the economy. He basically had no economic policy and let the economy run its course. The tech bubble came and went, some of the new business stayed, many went.

Clinton was a model republican president. Laissez-faire.

[DrChinese]

Originally posted by crackmonkey
Was this thread intended to be taken seriously? I mean, it's so blatantly illogical that it HAS to be a joke... right? Right?

Did anybody bother to follow the link????? Of course I am serious that it should be more about the economy. And I am 100% serious about Democrat vs. Republican on the unemployment issue.

I am tired of hearing that Bush I made Clinton look good, and Carter made Reagan look bad, etc. The facts say the opposite, and a lot of people are in denial. Here are the actual facts, please look at the TABLE FROM BUREAU OF LABOR STATISTICS (http://www.bls.gov/cps/prev_yrs.htm) if you need confirmation:

FACT: Carter took office with unemployment at 7.7% and left office with unemployment at 7.1%. Unemployment dropped 3 of his 4 years in office. That means Carter gave Reagan a better economy than Ford gave Carter. Ford=Republican, Carter=Democrat; case closed.

FACT: Unemployment peaked during the Reagan years at 9.7% in 1982 and 9.6% in 1983. That was after his supply side tax cut. Oh, and by the way, that put unemployment at a post-World War II peak. Reagan=Republican; case closed.

FACT: During Bush I, unemployment rose from 5.5% to 7.5%, and during Bush II it has already risen from 4.0% to 6.0%. Bush I/II=Republicans; case closed.

FACT: During EVERY year Clinton was in office (and that was 8 years for those who aren't sure) unemployment dropped: from 7.5% to 4.0%. Clinton=Democrat; case closed.

Does anyone remember the last time they thought the economy was doing great? Yeah, a DEMOCRAT was the president then! And don't bother following the trend back from Truman to Eisenhower to Kennedy to Johnson to Nixon. The trend is still identical: Democrats=good and Republicans=bad.

[crackmonkey]

But what conclusions can you draw from these statistics other than the obvious - that more people are hired during Democratic administrations? How many of these jobs are low-paying? How many are created by the government? Is there an economic trend during Democratic administrations in general, or is there only a similarity in employment?
This kind of statistic isn't very meaningful unless coupled with more information. I also get the feeling that you've cherry-picked this parameter to show your boys in the best possible light...

[Segnosaur]

Originally posted by DrChinese

Did anybody bother to follow the link????? Of course I am serious that it should be more about the economy. And I am 100% serious about Democrat vs. Republican on the unemployment issue.


And have YOU read any of the replys to your original message, such as mine, or dwb's? What about the cyclical nature of the economy? What about other econimic indicators? What about delays between implementation of policies, and their effect on the economy? Are you just going to ignore all that?

[DavidJames]

"What about the cyclical nature of the economy? ... What about delays between implementation of policies, and their effect on the economy?"

When I read those kinds of things what is often meant is:

If things are bad under Democrats, it's their fault
If things are good under Democrats, it's due to previous Republican administrations
If things are good under Republicans, it's due to their policies
If things are bad under Republicans, it's due to previous Democrat administrations

See the cycle, see the delays :)

[Pyrrho]

Face it, the tech bubble was going to pop no matter who was in the White House after Clinton. Enron was going to go belly-up eventually, and so on. Greenspan does what he does regardless of the President.

[Mike B.]

I think the way the cycles work, the economy may be in better shape in time for November 2004. Not because of anything Bush does, just the way these things go...

[DrChinese]

Originally posted by Pyrrho
Face it, the tech bubble was going to pop no matter who was in the White House after Clinton. Enron was going to go belly-up eventually, and so on. Greenspan does what he does regardless of the President.

I agree that Greenspan does what he will do, and he does a great job of it. I would happily stand and applaud him for thirty minutes for his contributions to the U.S.

That said, he has served under so many administrations and weathered so many ups and downs... and yet it is the Democratic presidents who employ more Americans, and Republican presidents who preside over the layoffs. It has been that way over the last 55 years.

Statistical fluke? Or am I "cherry picking" the stats? Riiiiight. Tell that to the 2.9 million Americans who aren't working today that were working when George W. Bush took office.

[crackmonkey]

Why on earth is it relevant what the recently unemployed think about this situation??? I'm sure that the unemployed under Carter thought it was his fault, ditto for Clinton, ad nauseum. In other words, their feelings about their situation have no bearing on the merits of your argument.
So - what conclusions can you draw from these statistics? Address my - and others'- critiques, please...

[schplurg]

Dr. Chinese:
FACT: Unemployment peaked during the Reagan years at 9.7% in 1982 and 9.6% in 1983.....

FACT: During Bush I, unemployment rose from 5.5% to 7.5%, and during Bush II it has already risen from 4.0% to 6.0%. Bush I/II=Republicans; case closed.
So who gets credit for the years between 1983 and 1988 when it went down from 9.6 down to 5.5? Was there a Democrat in there somewhere that we all missed ;)

I dunno about "case closed".

[crackmonkey]

Good point. Looking at the figures stated in your link, unemployment during the Bush administration actually grows at a lesser rate than during the same amount at the start of Clinton's term. The overall unemployment percentage is lower under Bush than Clinton during this time, as well.
Case closed?

[corplinx]

Originally posted by DrChinese


Statistical fluke? Or am I "cherry picking" the stats? Riiiiight. Tell that to the 2.9 million Americans who aren't working today that were working when George W. Bush took office.

You make the classical mistake made by many woo woos. You assume correlation is causation.

Having worked in high-tech since the mid nineties, I saw the VC gold rush that spurred the economy into record highs. Bill, Al, Newt, and Bob Dole had zilch to do with it. I watched as the bubble burst in 1999. I've watched friends get layed off. I worked for a dot bomb that had to file chapter 7. And recently I was downsized again.

So on behalf of unemployed people everywhere, buzz off. Don't exploit my situation to coverrup your logical fallacies. We in high tech drove this economy to its records and we drive it to recession.

[DrChinese]

Originally posted by crackmonkey
Good point. Looking at the figures stated in your link, unemployment during the Bush administration actually grows at a lesser rate than during the same amount at the start of Clinton's term. The overall unemployment percentage is lower under Bush than Clinton during this time, as well.
Case closed?

Let's see...Clinton left it at 4.0% and Bush has grown it to 6.0%. Bush Sr. left it at 7.5% and Clinton reduced it to 5.6% in an equivalent period. So apples to apples, your point is?????

My point, as repeated, is that Democratic presidents increase employment and Republican presidents decrease employment.

To address the issue of economic cycles (also raised by crackmonkey and others)... yes, there are economic cycles and they affect both Republican and Democratic presidents. In 55 years (1948-2003) there have been 24 years with Democratic presidents and 31 years with Republican presidents. In every case, the result is the same, and regardless of the economic cycles, which should affect - on the average - both parties equally. That is, all other factors being equal.

If the unemployment statistics were unrelated to the party of the president, why is there such a strong correlation?

Of course, I do make a couple of far-fetched assumptions in all of this. 1. The president has something to do with the nation's economy. 2. If a president takes over in January of one year, I give him credit for the entire year. Wild stuff... The point is not to prove that the president is the ONLY determinant of unemployment. And certainly there is SOME effect from the outgoing president, although you have to draw the line somewhere. But the president is certainly one factor which is statistically significant. I can't see any greater factor, in fact.

Since George W. started talking the economy down from the moment he was elected and BEFORE he took office... it's hard not to hand him credit where credit is due. So George W., remember, millions of people in the U.S. are going to bed tonight without any prospect of finding a job tomorrow. And they owe it all to YOU.

[DrChinese]

Originally posted by corplinx


1. You make the classical mistake made by many woo woos. You assume correlation is causation.

2. Having worked in high-tech since the mid nineties, I saw the VC gold rush that spurred the economy into record highs. Bill, Al, Newt, and Bob Dole had zilch to do with it. I watched as the bubble burst in 1999. I've watched friends get layed off. I worked for a dot bomb that had to file chapter 7. And recently I was downsized again.


1. Correlation is not causation. The correlation could be spurious.

2. I appreciate that you work in high tech. I also work in high tech today, as I have non-stop since Carter was president. I work in management of software development, and am quite familiar with the state of the job market. (I have raised VC too.) Although I am currently employed, I was unwillingly out of work for a 4-5 months before I found my current job in February. I would not say that I speak for anybody to a greater extent than you do, and vice versa. So your comments about me "buzzing off" are misplaced. Facts are facts. The high tech bust is not all that is going on that is wrong with the economy. And this was certainly not the driving factor of the last 55 years.

Lest anyone get the wrong idea, I do not blame George W. Bush or anyone else for my own situation. I alone take the credit (good and bad) for that.

My statement on unemployment and the president stands. Democrats=good, Republicans=bad. If you or anyone else cares to offer a counter-explanation that involves any actual facts, I would be more than happy to discuss. Saying that there are other factors that affect employment is to state what I hope is already obvious to all. I never stated that unemployment is causally connected to the party of the president ALONE. I said it IS statistically related, and I personally believe that this is also a causal relationship. But it is not the only causal relationship in the equation, any more than mass of an object is the only explanation of gravitional attraction (distance is a factor in that equation as well).

[Tricky]

I've always thought that Clinton nursed the boom by ignoring obvious greed, like at Microsoft and Enron, but at least he proposed that some of the profits of that greed-filled boom go to paying down the national debt. Republicans seem to think that a boom is a reason to give a tax break to the wealthy. They also seem to think that a recession is a reason to give a tax break to the wealthy.

In fact, tax breaks to the wealthy is pretty much been the Republican modus operandi since the Reagan years. It works, at least for a while, but when the bills come due, someone has to pay. Bush the First paid for Reagan's excess, and did a reasonable job of getting us right again (by reneging on his "read my lips" promise).

Clinton continued fairly responsible economics, but of course economics are not a thing you can train like a pet. Bush the Second has embarked on a program much like Reagan, which I predict will have similar results: Short term gain, long term recession. Don't we learn from history?

[Richard G]

The President has very little to do with the economy.

Originally posted by Richard G
The President has very little to do with the economy.

Yah, we hear that every time the economy tanks.

[corplinx]

Originally posted by Tricky
Republicans seem to think that a boom is a reason to give a tax break to the wealthy. They also seem to think that a recession is a reason to give a tax break to the wealthy.



Example? I've never seen the uppermost tax brackets dip below the middle and lower brackets. I've never actually seen the wealthy get a tax break. I've seen the upper rate lowered but its still not equitable compared to the middle rate. If the highest tax rate is 35 percent and is lowered to 30, but the middle bracket is still 24, I don't consider that a tax break.

Many silicon valley californians are made to pay the upper rate and aren't near "wealthy". As long as we keep using subjective measures like "wealthy" and "middle class" then we will be marks for the empty rhetoric of certain politicians who have never seen a tax reduction that wasn't targetted at the "wealthiest of americans".

[Cain]

Remember when Republicans predicted that Clinton's tax increase for the highest marginal brackets would sink the economy?

As Tricky says, the Republicans always seem to argue for tax cuts.

During his campaign Bush thundered, "A surplus means the government is taking too much of your money." (not an exact quote)

After the economy started going down-hill (becuase IT is cyclical and largly out of the hands of the President*), he said we need tax cuts as a "stimulus". Fat lot of good that did. Now we need more tax cuts for more, uh, stimulus.

Also, the 80s, "Reagan's decade" was the slowest in terms of growth for the last fifty years (50s, 60s, 70s and 90s all outperformed it).

*The President can still make it easier on people, like extending unemployment benefits in time of recession, which Bush did only half-heartedly because others made an issue out of it).

[peptoabysmal]

Originally posted by DrChinese
While Bush has been invading other countries, he has been giving the U.S. economy only scant attention. This is shown by the federal unemployment statistics (http://www.bls.gov/cps/prev_yrs.htm), among other things.

When Clinton defeated George Bush Sr. in 1992, the rate was 7.5% (only Reagan and Ford gave us a higher unemployment rates since WWII). During the years Clinton was in office, the unemployment rate DECLINED every year, ending up at 4.0%.

On the other hand: Since George W. Bush was elected, the unemployment rate has INCREASED every year, ending up at 6.0% currently. 8.8 million Americans are out of work at this time.

The moral of the story: Democratic presidents are good for employment, Republicans bad for employment. How's that for black and white!!

Well, I guess if you count the White House interns hired to smoke Clinton's cigar, unemployment was *ahem* down.

[WildCat]

All this talk about Republicans vs. Democrats and the economy is silly. The Fed's policies (open market operations, interest rates, etc.) have a far greater impact on the economy than the president could ever have, at least according to every economics course I ever took (I have a university degree in finance, many economics courses were required, including 400 level ones). Dr. Chinese, please enlighten me just as to what specific Clinton economic policy was responsible for the 90's boom? And what Bush policy was responsible for the current slump? Also, explain why the economy was already starting downward before Bush took office.
Wasn't it back in '96 that Greenspan warned about the irrational exuberance in the stock market? That it was unsustainable and overvalued, particularly in the tech sector? The market has corrected itself, painful in the short term but it will recover in a year or two.
Dr. Chinese wrote:
Since George W. started talking the economy down from the moment he was elected and BEFORE he took office... it's hard not to hand him credit where credit is due. So George W., remember, millions of people in the U.S. are going to bed tonight without any prospect of finding a job tomorrow. And they owe it all to YOU.
Oh, I see, Bush was responsible for the economy before(!) he even took office. As the saying goes, extraordinary claims require extraordinary evidence, I'm sure you will provide something besides correlations as your evidence. :rolleyes:

[Dancing David]

Ask not for who the bell trolls.....

I have seen a lot of woo-wooism on this board about how Ronbo singlehandedly defeated the evil empire and caused the CCCP to collapse. Whenever something good happens and a republican is in the White Hosue they want to take credit for it.

Dubya has as much to do with the economy tanking as Regan does with the fall of the CCCP. Turn around is fair play.

(Seriously though didn't George the Second have a sound fiscal poilicy that led to further gains during the Clinton era? Can't the president make some piss poor choices.)

Hellcat: is the Laffler Curve still around I remember it back from the days of Tricky Dicky and why there was inflation during his term?

Peace

[DrChinese]

Originally posted by WildCat
All this talk about Republicans vs. Democrats and the economy is silly. The Fed's policies (open market operations, interest rates, etc.) have a far greater impact on the economy than the president could ever have, at least according to every economics course I ever took (I have a university degree in finance, many economics courses were required, including 400 level ones). Dr. Chinese, please enlighten me just as to what specific Clinton economic policy was responsible for the 90's boom? And what Bush policy was responsible for the current slump? Also, explain why the economy was already starting downward before Bush took office.
Wasn't it back in '96 that Greenspan warned about the irrational exuberance in the stock market? That it was unsustainable and overvalued, particularly in the tech sector? The market has corrected itself, painful in the short term but it will recover in a year or two.


First, please re-read what I said. My comments were about unemployment and the president. I did not talk about the overall economy or the stock market. And I am not trying to re-write economic theory. Further, I already acknowledged the role of Greenspan, pointing out that he has presided over ups and downs. If he was as powerful as you describe, there would only be ups and no downs.

I pointed out a clear correlation which can be seen consistently over a 55 year period and over the terms of 11 different presidents during a variety of economic conditions. I connected the president to unemployment for the specific years he was in office. (I.e. no lag or offset.) If you think it should be a year, then re-examine the figures in that light. If you think it should be 8 years, then that would be enough to make the Republicans look good.

[swellman]

The unemployment data is easier to discuss in graphical form.

http://data.bls.gov/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNU04000000&years_option=all_years&periods_option=specific_periods&periods=Annual+Data

[Segnosaur]

Originally posted by DrChinese

To address the issue of economic cycles (also raised by crackmonkey and others)... yes, there are economic cycles and they affect both Republican and Democratic presidents. In 55 years (1948-2003) there have been 24 years with Democratic presidents and 31 years with Republican presidents. In every case, the result is the same, and regardless of the economic cycles, which should affect - on the average - both parties equally. That is, all other factors being equal.

If the unemployment statistics were unrelated to the party of the president, why is there such a strong correlation?

Ummm... you do realize that this is a very small sample size. (There's only been about a dozen elections in those 55 years, and even fewer people elected as president, when you consider multi-term leaders.) When you deal with small sample sizes, they are often subject to wild fluctuations.

Originally posted by DrChinese

Of course, I do make a couple of far-fetched assumptions in all of this. 1. The president has something to do with the nation's economy. 2. If a president takes over in January of one year, I give him credit for the entire year. Wild stuff... The point is not to prove that the president is the ONLY determinant of unemployment. And certainly there is SOME effect from the outgoing president, although you have to draw the line somewhere. But the president is certainly one factor which is statistically significant. I can't see any greater factor, in fact.

You're making more than just a couple of 'far fetched' assumptions? Your second assumption (a presedient takes credit for the entire year when he starts), had you not made it, would have totally destroyed your Carter/Regan comparison (as one example). And, although you give lip-service to the effects of one president's policies lingering, you dismiss it with a hand-wave (your 'Draw the line somewhere' comment), even though it can take months if not years for things like tax changes to affect the economy.

If I were president, and I proposed a law doubling all taxes (or cutting them in half), how long do you think those changes would take to be felt? First of all, it would have to take weeks or months to go through congress (assuming it doesn't get watered down or cancelled all together.) Then, it actually has to be put in place. (That's just logistics; people won't see changes in their pay checks for at least one pay cycle, if not more.) Then, the changes in spending have to ripple through the economy. All of these things take time.

[DrChinese]

Originally posted by schplurg

So who gets credit for the years between 1983 and 1988 when it went down from 9.6 down to 5.5? Was there a Democrat in there somewhere that we all missed ;)


According to some of the others posting here, I guess the answer would be Carter. No wait! He was actually responsible for high unemployment in 1982 & 1983... Whatever.

The idea is that there are many intangibles tied up in who is the president at any point in time. Consumers and businesses alike expect certain results, and some of those results may be "self-fulfilling" prophecies. Perhaps it is not the president's policies but his cabinet choices that make the difference.

If I were betting, I wouldn't bet that unemployment will dip down to even 5% before the election next year. But I hope I am wrong, I would be happy to lose that bet.

[schplurg]

quote:
Dr. Chinese:
FACT: Unemployment peaked during the Reagan years at 9.7% in 1982 and 9.6% in 1983.....

FACT: During Bush I, unemployment rose from 5.5% to 7.5%, and during Bush II it has already risen from 4.0% to 6.0%. Bush I/II=Republicans; case closed.The graph...

http://data.bls.gov/labjava/servlets/graphics/generated_graphs/LNU04000000_82881_1052428762035.gif
Well according to your facts, and the graph, unemployment was at 5.5 when Reagan left office, which is lower than it was when he became president. You mentioned the spike in the graph during a few of Reagans 8 years in office to support your statements while ignoring the final years of his term in which unemployment took a sharp down-turn. In fact, unemployment may have already been on the rise at the end of Carter's term (hard to see the details on that little graph thingy though heh).

I'm a currently unemployed "dot-commer" I guess, though I won't be in a few days. I will be making substantially less money in this new position, after having been unemployed for months. I wish I knew which one of these suckers I could blame :D

Which of Bush's policies can be attributed to the rise in unemployment (not scarcastic, a real question)? Although I'm pretty conservative, I'm not a Republican, so I don't have a vested interest in whether they are right or wrong. I know many people who own businesses - restaurants, cabinet shops, construction contractors, hi-tech - and they all claim that business took a sharp turn for the worse after 9/11. How 9/11 can be blamed for this though is beyond my understanding, especially in the long term. It seems that everybody is blaming it for everything (the Sharks didn't make the playoffs this year!). Bush can always use the 9/11 excuse, regardless of how much it actually affected the short and long term economic decline. I wonder how valid an excuse that is.

I'm questioning the facts you presented, Dr Chinese, because I want to understand more about the workings of economics, and because there seemed to be a big hole in your unemployment numbers during the Reagan years. Your general arguement that unemployment suffers more during Republican terms however, does appear to be largely true, though whether or not there's a correlation would take much deeper analysis. The main thing I've learned hanging out at JREF is that I have a lot to learn.

Seems pretty difficult, if not impossible, to really attribute economic change to any one administration (as already discussed), unless said administration makes some very radical economic changes (which may explain the severe drop in unemployment in the later Reagan years). But it is interesting nevertheless.

[DrChinese]

Originally posted by Segnosaur

Your second assumption (a presedient takes credit for the entire year when he starts), had you not made it, would have totally destroyed your Carter/Regan comparison (as one example). And, although you give lip-service to the effects of one president's policies lingering, you dismiss it with a hand-wave (your 'Draw the line somewhere' comment), even though it can take months if not years for things like tax changes to affect the economy.


Well, a president starts his term in January so I don't think that is quite so far-fetched. That's 95% of the year.

I didn't actually compare Carter and Reagan, I said that Carter improved employment during most of his term and left the rate in better shape than when he started. If you pick different start and end points (I picked 1977 to 1980), that conclusion would be different. For example, if you assumed that Carter was responsbile for 1978 to 1981, then Ford turned over things at 7.1% and Carter turned it over to Reagan at 7.6%. By that logic, Carter was also responsible for the release of the Iran hostages and passage of tax cuts (both of which would probably be big news to BOTH Carter and Reagan).

[Segnosaur]

Originally posted by DrChinese

Well, a president starts his term in January so I don't think that is quite so far-fetched. That's 95% of the year.

Well, assuming the incoming president can get his policies enacted the same day he starts office, and that his policies will take effect immediately...

Originally posted by DrChinese

I didn't actually compare Carter and Reagan
You're right, you didn't. But, you did look at a lot of numbers between different presidents....
Originally posted by DrChinese

I said that Carter improved employment during most of his term and left the rate in better shape than when he started. If you pick different start and end points (I picked 1977 to 1980), that conclusion would be different. For example, if you assumed that Carter was responsbile for 1978 to 1981, then Ford turned over things at 7.1% and Carter turned it over to Reagan at 7.6%. By that logic, Carter was also responsible for the release of the Iran hostages and passage of tax cuts (both of which would probably be big news to BOTH Carter and Reagan).

Big straw man there.... The hostage release, and the tax cuts, were things which can and would happen immediately, and are things which a president would have more of a direct control over. The economy is not easy to control; there is no 'magic method' to make the economy change overnight.

By the way, I notice that you've been asked twice, but failed to respond... what policy of Bush's do you think is responsibile for the increase in unemployment?

[dsm]

Originally posted by Segnosaur

By the way, I notice that you've been asked twice, but failed to respond... what policy of Bush's do you think is responsibile for the increase in unemployment?


I'm sure something could be found in the lists here (http://www.failureisimpossible.com/needtoknow/campaignslogans.htm#reverse) or here (http://www.democrats.org/specialreports/brokenpromises/)...

;)

[WildCat]

Originally posted by DrChinese

First, please re-read what I said. My comments were about unemployment and the president. I did not talk about the overall economy or the stock market.
But unemployment is directly related to the stock market. When everyones stock portfolios were rising by 20% a year they went out and spent $$ on goods and services, which created jobs in providing those goods and services. When the tech bubble burst, people didn't spend nearly as much, companies downsize and higher unemployment resulted.
Originally posted by DrChinese

I pointed out a clear correlation which can be seen consistently over a 55 year period and over the terms of 11 different presidents during a variety of economic conditions. I connected the president to unemployment for the specific years he was in office. (I.e. no lag or offset.) If you think it should be a year, then re-examine the figures in that light. If you think it should be 8 years, then that would be enough to make the Republicans look good.
I asked you to specify the economic policies responsible for the data you provided, not to point out correlations. Please do so if you can. I wasn't trying to make the Republicans look good, I argued that the political party in charge was largely irrelevant.
Originally posted by DrChinese

Further, I already acknowledged the role of Greenspan, pointing out that he has presided over ups and downs. If he was as powerful as you describe, there would only be ups and no downs.

No, Greenspan can smooth out the cyclical nature of the economy, but not eliminate it entirely!
Originally posted by Dancing David

Hellcat: is the Laffler Curve still around I remember it back from the days of Tricky Dicky and why there was inflation during his term?

I'm assuming you mean me since Hellcat hasn't posted to this thread.
If I remember my economics correctly, the Laffler Curve related to revenue realized related to tax rates. For example, if there was a 0% tax rate, revenues = 0. Likewise, if the tax rate was 100% revenues would also be 0, because there would be no reason to work or produce anything! Somewhere between 0%and 100% is a tax rate that optimizes revenue, to the left and right of that point revenues decline. Bush feels we're too far to the right, Dems feel we're either right at the optimal point or to the left of it.
I don't know what this has to do w/ Nixon, but I do know he attempted wage and price controls which is a big economic no-no, and is now in economic textbooks as an example of what not to do to control inflation.

[DrChinese]

Originally posted by Segnosaur

By the way, I notice that you've been asked twice, but failed to respond... what policy of Bush's do you think is responsibile for the increase in unemployment?

I will pass my ideas...

I personally think that in the last 20 years, deficit spending has been a bigger issue than it has otherwise been given credit for. I think that Reagan expanded the deficits, and it had negative repurcussions. I think Clinton stumbled across a balanced budget accidently, I am not sure he ever thought it was that important. But work it did. The funny thing is that Newt was a big balanced budget advocate but it seems to be Clinton that made it happen. He also had unusally good help from both Robert Rubin (treasury) and Robert Reich (labor).

Going back further than 20 years, I think that Republicans tended to focus on different issues than Democrats. While each had their benefits, the Democrats had a greater benefit to the employment rate. Let's face it, there is absolutely nothing worse than wanting to work but not having a job. So overall I think that employment is more critical than stock prices.

So to answer the question... Clinton focused on a balanced budget, while Bush has focused on tax cuts. Tax cuts are not all they have been cracked up to be, so that puts Bush on the wrong side of both deficits and taxes. I am not advocating any particular economic action, I am trying to point out what works and what doesn't work. I think the conclusion would be that a balanced budget is more important than lower marginal tax rates.

Clinton was brilliant because he had no ideological problem with advocating Republican positions if they would make him look good. Bush is relatively stupid because he is more focused on ideology than results. Clinton realized that a balanced budget was within his grasp when the economy was good. This went against traditional Democratic theory. He seized the moment and achieved something good. Sorry to say, Cowboy George is being manipulated by ideologues such as Rumsfled, Ashcroft, etc. because he doesn't know any better.

[crackmonkey]

Looking at the figures stated in your link, unemployment during the Bush administration actually grows at a lesser rate than during the same amount at the start of Clinton's term. The overall unemployment percentage is lower under Bush than Clinton during this time, as well.

This quote still stands, using the figures you provided. What does this prove? Not much, really, just like your assertions. There are far too many variables involved in the process that aren't examined here to draw any legitimate conclusion. I think that the fact that you try to draw a conclusion from this without examining any other variables shows more about your motives than anything else.

[Segnosaur]

Ah, at last, some actual meat to the argument....

Originally posted by DrChinese

Clinton was brilliant because he had no ideological problem with advocating Republican positions if they would make him look good. Bush is relatively stupid because he is more focused on ideology than results. Clinton realized that a balanced budget was within his grasp when the economy was good. This went against traditional Democratic theory. He seized the moment and achieved something good. Sorry to say, Cowboy George is being manipulated by ideologues such as Rumsfled, Ashcroft, etc. because he doesn't know any better.

I agree, deficit spending is bad. But where do you draw the line? Would you advocate increasing taxes until you have a balanced budget, regardless of what the tax increase will be? What about government spending? Is it a better idea to have a zero deficit, extremely high taxes, and high government expendatures, or is it better to have low taxes, low expenses, and a small deficit?

And do you have a list of government surpluses/deficits for the same time period that you discuss unemployment for? Do replublican presidents always run a deficit, and do democrats always run a surplus?

I'm not that familiar with the budgeting in the U.S. at the time, but I do remember people here suggesting Clinton wanted to increase expenses, but a balanced budget was forced on him by republican politicians in the house. (Anyone have any data on that?)

And just in case you think deficits are the most important issue, I have an example in Ontario... We had a socialist government for a while, which greatily increased taxes, ran up our debt, and basically ruined our economy. Then, we voted in a Conservative government, who greatly cut government spending, and cut taxes. People assumed that cutting taxes would increase the deficit, but it actually caused an improvement to our economy, which increased tax revenue overall, and the government was still able to get rid of the deficit.

Now, I know the Ontario example may not be immediately transferable to the U.S., since even our 'lowest' tax rate is probably higher than most tax rates in the U.S., but it does go to show that more than deficits affect the economy.

[Segnosaur]

Originally posted by Segnosaur
And do you have a list of government surpluses/deficits for the same time period that you discuss unemployment for? Do replublican presidents always run a deficit, and do democrats always run a surplus?

Actually, I'm going to answer my own question here:

You can find a list of budget deficits/surpluses at: http://www.whitehouse.gov/omb/budget/fy2003/hist.html. I find the table giving figures in terms of GDP to be the most useful.

Some things of note:
- Even though Bush may run a deficit this fiscal year, its estimated to be only about 1% of the GDP. This is lower than the deficit exprienced during any year of Carter's administration, and lower than the deficit for any year of Clinton's first term. (Not bad, considering Bush had to deal with the effects of 9/11.) So, if running a deficit is the worst possible thing a president can do, Bush Jr. isn't all that guilty.

- Clinton had deficits his entire first term (when the economy was improving)

- Bush Sr.'s Deficits were higher than Carter's, yet they had roughly the same unemployment numbers. If the deficit were really the most important factor, shouldn't Bush Sr. have much higher unemployment?

[DrChinese]

Originally posted by Segnosaur

Actually, I'm going to answer my own question here:

You can find a list of budget deficits/surpluses at: http://www.whitehouse.gov/omb/budget/fy2003/hist.html. I find the table giving figures in terms of GDP to be the most useful.

...

- Bush Sr.'s Deficits were higher than Carter's, yet they had roughly the same unemployment numbers. If the deficit were really the most important factor, shouldn't Bush Sr. have much higher unemployment?

I said that a balanced budget had a positive effect on the economy, much more than anyone had ever realized it would. Traditionally theory had US deficit spending as sustainable long term and the market had gotten used to it. But when we balanced the budget, good things happened. I am not sure if that would happen every time, it just seems like everything really clicked when it finally did happen. I guess Newt deserves some credit for that too, as do a host of other Republicans. But note that it was Clinton - a Democrat - who made it happen. It certainly could not have happened without Clinton's full support.

So the unique thing was not the size of the deficit, it was the fact there was a surplus and it wasn't being spent.

Presidents have a variety of tools at their disposal. And they can focus more on some things than others. Democratic presidents are more concerned with unemployment levels and act accordingly. Clinton certainly was. Presumably, that could mean that something else suffers as a result. I.e. perhaps taxes go up, or the deficit goes up, inflation, etc. In Clinton's case, that did not happen. But perhaps it did in other Democratic administrations.

[Victor Danilchenko]

DrChinese

I said that a balanced budget had a positive effect on the economy, much more than anyone had ever realized it would. Traditionally theory had US deficit spending as sustainable long term and the market had gotten used to it. But when we balanced the budget, good things happened. I am not sure if that would happen every time, it just seems like everything really clicked when it finally did happen.I think you are confusing cause and effect. Budget got balanced -- became easy to balance -- because economy was way up. Things "clicked into place", and budget got balanced, because of the common cause -- economic upturn; balancing the budget was the effect of it, not the cause.

[dsm]

Originally posted by DrChinese

But when we balanced the budget, good things happened.


By this, I assume you mean the Internet Bubble?

Last night, Frontline on PBS did a very interesting expose (http://www.pbs.org/wgbh/pages/frontline/press/2118.html) on what happened with the Internet Bubble. There conclusion seems to be that it was due to a failure to "regulate" the investment banking industry properly which would lay the blame at Alan Greenspan's feet more than anything Clinton or Bush(s) did.

Very interesting...

[DrChinese]

Originally posted by Victor Danilchenko
DrChinese

I think you are confusing cause and effect. Budget got balanced -- became easy to balance -- because economy was way up. Things "clicked into place", and budget got balanced, because of the common cause -- economic upturn; balancing the budget was the effect of it, not the cause.

Quite true, difficult to say which is which in this case.

Also, it must be said that even in the case of the Democratic presidents being best for seeing lowered unemployment rates... Is the president's policy the cause of the improvement? Or could his election be an effect of high unemployment in the first place? In other words, the correlation could reflect a valid association without saying what is the cause and what is the effect.

[Segnosaur]

Originally posted by DrChinese

Democratic presidents are more concerned with unemployment levels and act accordingly. Clinton certainly was.

That's a very very profound statement. What are you basing it on?

I always figured both sides were concerned with unemployment, but the Republicans were more interested in cutting taxes to stimulate the economy, while the Democrats believed in government spending to get things going.

Notice, you were originally talking about all presidents going back to the 1940s, but now you are more concerned with Clinton only. Your 'sample size' is getting smaller and smaller.

[dsm]

Originally posted by Segnosaur

I always figured both sides were concerned with unemployment, but the Republicans were more interested in cutting taxes to stimulate the economy, while the Democrats believed in government spending to get things going.


I think it's a difference in viewpoints of the two parties:


Republicans -- trickle down -- cut taxes such that the wealthy begin investing in the economy which will lead to greater employment (etc.).
Democrats -- trickle up(?) -- provide breaks to the middle/lower class such that they will begin buying and saving and making their life better which, thus, will generate economic demand in the market.


The Republican viewpoint seems more geared toward the wealthy and, if it happens to help the middle/lower class, so be it.

[Segnosaur]

Originally posted by dsm


Republicans -- trickle down -- cut taxes such that the wealthy begin investing in the economy which will lead to greater employment (etc.).
Democrats -- trickle up(?) -- provide breaks to the middle/lower class such that they will begin buying and saving and making their life better which, thus, will generate economic demand in the market.


The Republican viewpoint seems more geared toward the wealthy and, if it happens to help the middle/lower class, so be it.
I don't know if that's totally accurate... the Republicans do want to cut taxes, but not only to the wealthy, to middle and lower income people too. (The wealthy save more in terms of overall dollars, but they were paying more to begin with, and are still taxed at a higher rate than lower earners.)

And just what type of 'breaks' do the democrats want to give? (An honest question... we don't hear much about many of the minute financial details of American policy up here in Canada.)

In Canada, our left-of-center party seems to believe that giving higher welfare payments, hiring more people directly, and subsidizing buisness (among other government handouts) is the best way to stimulate the economy.

[DrChinese]

Originally posted by Segnosaur


Notice, you were originally talking about all presidents going back to the 1940s, but now you are more concerned with Clinton only. Your 'sample size' is getting smaller and smaller.

Just the opposite, others have focused on Clinton vs. Bush. The point of the thread was to show that this pattern goes back a long way.

Just to kick things off, I looked at the unemployment stats (http://www.bls.gov/cps/prev_yrs.htm). It shows higher %'s during the last years of the Eisenhower administration and the rate went up during the first Kennedy year. It didn't go back down until Johnson was in office. I had always thought of that period of time as being a "full employment" period, when anyone who wanted to work could find work. But the actual rate is similar to the 6% we are at now, and that doesn't feel so great at all.

The back half of the 60's shows relatively lower unemployment. Was that related to the Vietnam War?

[dsm]

Originally posted by Segnosaur

And just what type of 'breaks' do the democrats want to give? (An honest question... we don't hear much about many of the minute financial details of American policy up here in Canada.)


It's in the type of tax cuts (and other things). For instance, the Republican backed dividend tax-cut is going to be much more advantageous to the rich than to the poor (who don't own stocks). On the other hand, Democrat backed tax breaks (and other incentives) to promote things like child care for the poor would enable more welfare recipients to take jobs.

Obviously, it's not a black and white issue (as in "Democrats good, Republicans bad"), but the trickle down vs. the trickle up view seems to be the main difference between the parties. Since the majority of people fall into the lower and middle classes, the Republican view looks like the more evil approach during tough economic times as it doesn't seem to be directly helping the lower/middle classes. On the other hand, during marginal times, the Democratic view appears to be evil as it takes money from the middle/rich classes to subsidize the activities of the poor.