Going Galt – Present and Past
Going Galt – Present and Past
There seems to be some chatter among right wing blogs about “going Galt” – i.e., ceasing to do paying work, shuttering one’s business, etc. – given Obama’s plan to let Bush tax cuts on those with the highest levels of income expire. (This new movement is covered beautifully by TBogg here and here. Its really worth reading those two posts, especially the first one.)
You’d think we just got through one of the periods of the fastest growth in this country. You’d think the fastest growth rates this country has ever seen came under Reagan, and that the slowest came under folks like FDR. Oh wait, those people do think that way, at least about Reagan and FDR. I actually wrote what might be a response to that, a few months back. I’d like to repeat that post here:
As we get closer to election time, the level of invective seems to be going up. What I find interesting is how the intersection between that invective, general ignorance, and outright charlatanism..
For example, mention of FDR is cropping up a lot in some circles, and not in a good way. You’d think, the way some bring him up, that FDR was the devil incarnate.. But by the numbers, FDR did one heck of a job. The Bureau of Economic Analysis has compiled data on real GDP per capita since 1929 (thank you Simon Kuznets), and in that time, no president produced numbers remotely comparable to those put up by FDR.
FDR was president from March 4, 1933 until his death April 12, 1945. Given his death came before midyear, let’s look at the growth from 1932, the year before he took office, to 1944, his last full year in office. Real GDP per capita grew at a scorching, yes, scorching 8.05% a year while he was President. Now, perhaps you protest… it was the war. The war saved the economy. But the growth rate of real GDP per capita from 1932 to 1940 was a blistering 5.37% a year, or about 2.2 times faster than Ronald Reagan. Now maybe you say to yourself – well, anyone can growth quickly if he follows the collapse we witnessed from 1929 to 1932.
Which brings us to the President who produced the second fastest growth rate… LBJ. LBJ [ed – corrected a grammatical error left in the first time] served from November 22, 1963 until January 20, 1969. Most of 1963 passed before he took office, so let’s measure his growth rate from 1963 to 1968, his last full year in office. That gives us 3.98% – about 1.6 times Reagan’s growth rate. And LBJ did not inherit a Great Depression, like FDR. Instead, he followed the President who produced the third fastest growth – JFK, under whom real GDP per capita was 2.65%, or about ten percent faster than Reagan managed.
So before we go on, its worth noting… FDR and LBJ probably come in for more criticism from the right for their economic policies than any other presidents precisely because of the one thing they had in common: these two, by far, expanded government more than other presidents, and not in ways specifically designed to further enrich folks who were already rich. They gave us the New Deal and the War on Poverty, Social Security and Medicare/Medicaid, the WPA and the Job Corps. One inherited a Great Depression, one inherited a great economy, one raised taxes, the other cut marginal tax rates, but both expanded the size and scope of government a lot, and both, simply put, produced.
Third, as noted, was JFK. Anyone think the New Frontier was the work of a small government guy? That perhaps the Space Program was really one of them laissez faire operations? (And please don’t attribute the 1964 tax cuts to Kennedy. LBJ invoked JFK’s name to get them passed, but they came after Kennedy died.)
The fourth fastest growth rates came courtesy of Bill Clinton: a 2.49% annualized increase in real GDP per capita, or about 2% more growth in real GDP per capita per year than Reagan.
Fifth was Reagan, sixth…. Ah heck, let’s just number them in order to save time:
10. GW (that’s 10 so far – don’t be surprised if he sinks further into the mire)
12. Bush Sr.
What the list shows us, is that, the top half of the spots are dominated by Democrats. Two Republicans, Reagan and Nixon, make it in (5th and 7th, respectively). It also shows us that the bottom half of the list is populated almost exclusively with Republicans. The one Democrat in the bottom half of the list, not incidentally, is the Democrat most beloved of Republicans today: Harry Truman. George Bush has compared himself to Truman, and a few weeks, Sarah Palin told us how she too was comparable to Truman. What are the odds that prominent Republicans would compare themselves with FDR or LBJ? (Snarky answer – probably about the same as the odds a Republican administration would produce a growth rate comparable to FDR or LBJ.)
Now, after 70 years of data, after observing what we’ve observed over all sorts of conditions, it is hard to conclude anything but this: one party advocates policies that produce rapid economic growth, and one part dismisses those policies with epithets like “socialism” and advocates instead policies that produce dismal economic growth. And dismal economic growth has consequences. Poor economic growth makes people worse off, and hits them in their pocketbook. And when people are hurting financially, their health suffers, the rate of divorce goes up, suicides increase, and the abortion rate increases. So those who advocate the policies that bring us lower incomes, poorer health, break up families, increase suicides, and increase the rate of abortions are doing us all a lot of harm. More, in fact, than Osama or Saddam could possibly have done. And yet, the folks who advocates those policies question the patriotism of the rest of us. Its very, very strange.
Real GDP per capita data can be obtained from NIPA Table 7.1.
Going back through the rankings, its not difficult to spot the moments when today’s right would have “gone Galt.” If think economic growth is generally a good thing, which leads me to conclude that the movement should be encouraged..