The Bush Economy, in Context
With today’s new employment numbers we can now take a fairly complete look at the overall performance of the economy during Bush’s entire term in office. This is a stretch of nearly four years, which (as I mentioned in my earlier post) is probably a long enough period of time to allow the economic policies set by the president to actually impact the economy. Greg Mankiw, chair of Bush’s CEA, agrees. From this year’s Economic Report of the President (p. 101): “The Administration’s policies have been a key force shaping recent economic developments.”
Note that I won’t even get into Bush’s management of the federal budget in this post, even though that represents what is probably his biggest failure of economic leadership. If you want some good budget analysis, you can visit any number of old Angry Bear posts, like this one or this one. But for today, let’s focus on how the economy has grown under Bush’s economic leadership.
Specifically, let’s compare Bush’s economic record with that of previous presidents. The following table gives us the total changes (note that I have not annualized these rates of change) in a few important economic variables over the first 3 1/2 years of each president’s term since 1968: employment, GDP, compensation (the broadest measure of the income that workers receive), after-tax income, and government spending.
Many presidents faced recessions: all of the terms shaded in the table contained a recession, or 6 of the last 9 presidential terms in office. Nixon#1, Bush Sr., and arguably the Reagan terms (if you count his intensification of the Cold War) experienced wars. Nixon #2 and Carter experienced dramatic and unprecedented supply shocks, with the oil crises of the 1970s.
Yet despite the difficulties faced by other presidents, Bush Jr.’s term in office has set records in almost every economic dimension (except for GDP growth, which has been average):
- Bush Jr.’s term saw the absolute worst job creation, both in the private-sector and in the economy as a whole.
- Bush Jr.’s term has yielded the absolute worst growth in employee compensation.
- Bush Jr.’s term has produced gains in after-tax income that, while not the absolute worst, are the third worst of the last 9 presidential terms. This despite what Bush has billed as “the largest tax cuts in history.”
- Bush Jr.’s term has also produced the fastest growth in discretionary government spending of all 9 presidential terms.
- Related to that, note as well that Bush Jr.’s term is one of only a few (the Nixon terms and the Bush Sr. term being the others) that have seen government employment grow faster than private-sector employment. (You can see this from the difference between the two measures of employment growth.) This growth in government makes the poor economic performance in the other categories even more remarkable.
Bush has been running for reelection based on his record as a wartime president, and on his foreign policy record. Even though his foreign policy has been deeply flawed, and even though this is becoming more apparent day by day, looking at data like this makes it clear why: running on his economic record would have been a sure-fire losing proposition.
UPDATE: I added a column for after-tax personal income, which I had apparently accidentally deleted from the table.