On Meet the Press Sunday, born-again deficit virgins John Cornyn and Pete Sessions could not explain any steps they would take to stem the flow of red ink they helped produce. But this weekend, both Republican leaders were crystal clear about their nostalgia for the economic policies of George W. Bush. While Senator Cornyn gushed "President Bush’s stock is going up a lot" as people are looking back "with more fondness" on his administration, Rep. Sessions insisted "we need to go back to the exact same agenda that is empowering the free enterprise system rather than diminish it."
That refrain is music to Democratic ears. After all, a recent Time poll showed Americans not only prefer President Obama over Bush by a twenty-point margin, but blame Dubya for the economic disaster 61% to 27%. Last week's Washington Post-ABC survey revealed a staggering 73% have some or no confidence in Republicans' ability to make the right decisions for the country's future. And by a 42% to 34% margin, the public still trusts Democrats to do a better job handling the economy. But the larger truth about the free enterprise system trumpeted by Pete Sessions is this:
When it comes to GDP, employment, the stock market or just about any other measure of the health of American capitalism, the historical record is clear: the economy almost always does better under Democrats.
The verdict on President Bush's reign of ruin was pronounced even before Barack Obama took the oath of office. January 9, 2009, the Republican-friendly Wall Street Journal summed it up with an article titled simply, "Bush on Jobs: the Worst Track Record on Record." Just days after the Washington Post documented that George W. Bush presided over the worst eight-year economic performance in the modern American presidency, the New York Times on January 24 featured an analysis ("Economic Setbacks That Define the Bush Years") comparing presidential performance going back to Eisenhower. As the Times showed, George W. Bush, the first MBA president, was a historic failure when it came to expanding GDP, producing jobs and fueling stock market growth.
But it was the release of a Census Bureau report in September ("Income, Poverty, and Health Insurance Coverage in the United States: 2008") which in 67 pages laid bare the economic devastation and human toll during the Bush presidency. As The Atlantic ("Closing The Book On The Bush Legacy") rightly noted, "It's not a record many Republicans are likely to point to with pride":
On every major measurement, the Census Bureau report shows that the country lost ground during Bush's two terms. While Bush was in office, the median household income declined, poverty increased, childhood poverty increased even more, and the number of Americans without health insurance spiked. By contrast, the country's condition improved on each of those measures during Bill Clinton's two terms, often substantially.
The table above (via The Reaction) provides a horrifying snapshot of the scope of the national calamity under George W. Bush. The extent of the failure by Jeb's brother was particularly glaring when it came to employment and job creation.
The dismal 3 million jobs created under President Bush didn't merely pale in comparison to the 23 million produced during Bill Clinton's tenure. As noted above, the reliably Republican Wall Street Journal offered an interactive table to illustrate "Bush on Jobs: The Worst Track Record on Record." In September 2009, the Congressional Joint Economic Committee charted Bush's job creation disaster, the worst since Hoover:
Sadly for Jeb Bush and his Republican allies, the GOP's pitiful record on the economy isn't limited to his brother. History shows that from GDP growth and job creation to managing the national debt and producing gains for investors, it is the Democratic Party which is the friend of Wall Street and Main Street alike.
For the investor class so fond of perpetuating the myth of Republicans' superior economic stewardship, the collapse of the stock marketing during the Bush recession must be particularly galling. The Standard & Poor's 500 spiraled down at annual rate of 5.6% during Bush's time in the Oval Office, a disaster even worse than Richard Nixon's abysmal 4.0% yearly decline. (Only Herbert Hoover's cataclysmic 31% plunge makes Bush look good in comparison.)
As it turns out, as the New York Times also showed in October 2008, the Democratic Party "has been better for American pocketbooks and capitalism as a whole." To make its case, the New York Times asked readers to imagine having put their money where its mouth is. Contrary to Republican mythology, Americans fare better - much, much better - under Democratic administrations:
As of Friday, a $10,000 investment in the S.& P. stock market index would have grown to $11,733 if invested under Republican presidents only, although that would be $51,211 if we exclude Herbert Hoover's presidency during the Great Depression. Invested under Democratic presidents only, $10,000 would have grown to $300,671 at a compound rate of 8.9 percent over nearly 40 years.
As the broader record shows, the best path to prosperity is to elect Democratic presidents.
The superior performance of Democratic presidents covers virtually the entire spectrum of economic indicators. As Elliott Parker of the University of Nevada, Reno detailed in a 2006 paper, since 1949 Democratic administrations have done better than Republican ones when it comes to unemployment (5.2% to 6.0%), job creation (-.0.4% decrease in unemployment, compared to 0.3% increase), GDP growth rate (4.2% to 2.9%), and even corporate profits as a share of GDP. And to be sure, he found the Dow benefits from Democrats in the White House.
There's no shortage of studies to show that stock market returns are higher under Democratic leadership. (As it turns out, Wall Street's performance is also better when Democrats control Congress.) In 2000, Pedro Santa-Clara and Rossen Valkanov of UCLA's Anderson School of Business concluded that "that the average excess return in the stock market is higher under Democratic than Republican presidents - a difference of 9 percent per year for the value-weighted portfolio and 16 percent for the equal-weighted portfolio." As the New York Times noted of UCLA study in 2003:
"It's not even close. The stock market does far better under Democrats...
...Professors Santa-Clara and Valkanov look at the excess market return - the difference between a broad index of stock prices (basically the Standard & Poor's 500-stock index) and the three-month Treasury bill rate - between 1927 and 1998. The excess return measures how attractive stock investments are compared with completely safe investments like short-term T-bills.
Using this measure, they find that during those 72 years the stock market returned about 11 percent more a year under Democratic presidents and 2 percent more under Republicans - a striking difference."
In 2002, Slate similarly concluded that "Democrats, it turns out, are much better for the stock market than Republicans":
Slate ran the numbers and found that since 1900, Democratic presidents have produced a 12.3 percent annual total return on the S&P 500, but Republicans only an 8 percent return. In 2000, the Stock Trader's Almanac, which slices and dices Wall Street performance figures like baseball stats, came up with nearly the same numbers (13.4 percent versus 8.1 percent) by measuring Dow price appreciation. (Most of the 20th century's bear markets, incidentally, have been Republican bear markets: the Crash of '29, the early '70s oil shock, the '87 correction, and the current stall occurred under GOP presidents.)
According to almanac editor Jeffrey Hirsch, the presidential party figures are among the most significant he's found. If the stock market were random, we'd expect such a result only one-quarter of the time. "I don't know why people are convinced Republicans are good for the stock market," Hirsch says.
Why? Because Republicans and their water carriers continue - with great success - to perpetuate the myth that the regulation-free policies of the GOP that so benefit them personally somehow help the American people overall. Given that the national debt tripled under Ronald Reagan and doubled again under George W. Bush, it's no wonder Dick Cheney famously declared:
"Reagan proved deficits don't matter."
Not, apparently, until a Democrat is in the White House.
And that Democrat is doing something about the economic fiasco he inherited. While the economy and American workers continue to struggle, President Obama's stimulus program and other dramatic steps prevented the Bush Recession from becoming the Bush Depression. The overwhelming consensus of economists has concluded the $787 billion stimulus program was a success and is on target to add up to 3.7 million news jobs and 4% to GDP by the end of the year. And with states teetering on the brink of fiscal calamity even as the long-term jobless continue to suffer, President Obama and the Democrats have pushed for a $50 billion package of unemployment benefits, Medicaid subsidies and other aid to the states.
And the Republicans said no to all of it. With their unique combination of economic know-nothingness and cold-blooded class warfare, Congressional Republicans instead block the extension of unemployment benefits even as they press to make the Bush tax cuts permanent and eliminate the estate tax. While the latter will costs the Treasury billions even as it lines the pockets of the heirs to the largest fortunes, the former produces red ink as far as the eye can see. To rationalize it all, the new Republican alchemists including John Boehner, Jon Kyl and Mitch McConnell pretend that there is "No evidence whatsoever that the Bush tax cuts actually diminished revenue." But despite their myth-making, the numbers tell the story: the Bush tax cut windfall for the wealthy accounted for almost half the budget deficits during his presidency and, if made permanent, the lion's share over the next decade as well.
In the wake of his revealing remarks, the NRCC is scrambling to deny the claim that Pete Sessions wants to go back to the Bush agenda. In the mean time, conservatives will accuse Barack Obama of being a "socialist", a "communist" or worse. Unfortunately for the Republican propagandists, the words of Harry Truman are as true today as when he uttered them generations ago:
"If you want to live like a Republican, vote Democratic."
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