The Bush Economic Record
So far, George Bush has not effectively gotten his message out on the economy. One of the Bush team’s first ads referred to the economy “turning the corner,” but that doesn’t even begin to explain what Bush had to deal with and how well he has handled it.
Remember that right as Bush came into office (or even during the Clinton administration depending on who you believe) America was hit with a recession. The stock market decline and the huge corporate accounting scandals both began before Bush ever took office. Then to top it all off, we had 9/11 and we’ve been fighting a war on terrorism since then. Few Presidents since WW2 have come into office with tougher economic circumstances to deal with.
So what did Bush do? Over the objections of the Democrats, he slashed taxes in order to stimulate the economy and put more money back in the American people’s pockets. Did that strategy work? Well it has taken longer than we’d like and less jobs than we’d like have been created, but overall, it has been a success. As Bob Dole says,
“The good news for President Bush this year is that the economy is looking up on his watch, too. All the major indicators are moving in the right direction. America has enjoyed nine consecutive quarters of economic growth. In the second half of 2003, the economy grew at the fastest rate in nearly 20 years. Meanwhile, inflation is down and interest rates are at historic lows. The result is that ownership of homes and automobiles is at a record high.
Creating new jobs remains a problem, but even those numbers are headed up. Since August 364,000 jobs have been added. The current unemployment rate is lower than the decade averages for the 1970’s, 80’s and 90’s. Even the stock markets, which presaged the 2001 recession when they began falling in 2000, are adding value. Although both are down slightly so far this year, in 2003 the Dow Jones Industrial Average rose by 25 percent and the Nasdaq by almost 50 percent.
And here’s the kicker: some economic indicators are even more favorable now than they were back in 1996. The misery index — the combination of unemployment and inflation — is actually lower now than it was at this point in 1996. And less misery is a good thing for incumbents.”
“The unemployment rate is exactly what it was in 1996 when Clinton ran for reelection. 5.6%. Nine months prior to the 1996 presidential election, Bill Clinton’s Council of Economic Advisers cheerfully reported that the “American economy has performed exceptionally well over the past 3 years.” While that may not surprise you, you may however be surprised to learn that President George W. Bush’s economic record is, in many ways, better than the record Clinton ran on for reelection. Compared with the “exceptional” years of 1993, 1994, and 1995, the first three years of George W. Bush’s presidency featured:
faster productivity growth
faster labor compensation growth (i.e., wages and benefits)
29.4 percent ($6.9 trillion) more economic output
45 percent ($960 billion) more exports; and
an economic growth rate 81.2 percent as fast as that under Clinton
Considering the circumstances under which the U.S. economy has labored for the past few years, including 9/11 and the War on Terrorism, President Bush’s record is all the more impressive. When George W. Bush moved into the White House, the economy was on the verge of recession. The largest stock market bubble in U.S. history had recently burst, exports were declining, manufacturing employment had been falling for half a year, and people were finding it harder and harder to find work. And that was before 9/11, the war on terror, and the revelations of the corporate-governance scandals that grew out of the late 1990s.The tax cuts President Bush signed into law helped alleviate the impact of these economic shocks and kept millions of Americans working who would have otherwise lost their jobs. Consequently, the unemployment rate peaked in June 2003 at 6.3 percent, compared with peaks of 7.8 percent and 10.8 percent during the previous two recessions. With the U.S. economy on the upswing, President Bush’s critics are finding it increasingly difficult to disparage his economic record. But that won’t stop them. Fortunately, as Aldous Huxley observed, “Facts do not cease to exist because they are ignored.” So what are the facts?
Most private-sector forecasters expect the U.S. economy will grow faster this year (on an average annual basis) than in any year since 1984. For the third consecutive year, the U.S. economy is poised to grow faster than most other industrialized economies. France, Germany, and Japan, for instance, are not expected to grow even half as fast as the United States. Since the Bush administration began, non-farm productivity has increased at a 4.1 percent annual rate — the fastest pace for the start of any presidency since Harry S. Truman occupied the White House. The U.S. remains the world’s largest exporter. In fact, during the first three years of the Bush administration, the U.S. exported more in real terms than it did during the Eisenhower, Kennedy, Johnson, Nixon, and Ford administrations combined. More single-family homes were sold in 2003 than in any other year on record. And the homeownership rate is at a record-high of 68.5 percent — a full percentage point higher than during the fourth quarter of 2000.
At 5.6 percent, the national unemployment rate is now lower than the average unemployment rate of the 1970s, 1980s, and the 1990s. According to the Labor Department’s household survey — the survey used to calculate the monthly unemployment rate — more Americans are working now than ever before. The payroll survey is also showing improvement: 112,000 new jobs were created in January and 366,000 jobs have been added over the last five months. While President Bush’s economic record is arguably better than the record Bill Clinton ran on in 1996, this truth is frequently obscured by unrelenting partisan criticism based more on fancy than fact. But the fact remains that the United States boasts the world’s largest and most vibrant economy. It will stay that way so long as we are guided by a trust in what President Bush calls “the power and possibilities of freedom.”
Maybe the Bush team is simply waiting for a month of big job growth to start running positive ads on the economy, but I’m not sure they should wait that long. Bush has done a great job of bringing the economy out of a funk that would have been a lot worse without his tax cuts and he needs to start tooting his horn a lot more…