The Democratic operatives and some Democrats in office continue to claim that the economy today is the worst since Herbert Hoover was president. Today I heard it again, but the way it was worded caught my ear. The pundit said something to the effect that non-governmental jobs in domestic US companies etc., etc., etc. was worse than Hoover. So many caveats. Must be defining things in a very precise way for a reason.
Why they settled on poor old Herbert, I don’t know. I remember an economy in the 1970s that was so bad a new word was created to describe it: stagflation, a combination of stagnation in industry growth and high inflation. I had just returned from overseas and hoped to buy my first house. Unfortunately, mortgage interest rates at the time were in double digits. Car loans could be had, but the interest rate from most banks on consumer loans was around 20%.
I’ve never believed the President had much impact on the economy. Much has to do with the availability of money, and he has some control there. The more money available, the higher inflation goes. But money is needed for growth. Most Presidents stay away from that tangled web.
Where a President can have some impact is in tax policy and regulation. In these areas, he must have a Congress that enacts laws doing what he wants done.
Now, I’m just a simple helicopter mechanic with an engineering degree. I never took a single economics class in my life. I did take bypass exams which gave me credit for knowing as much as needed to pass the class without actually taking it. I took the CLEP subject exams in both micro- and macro-economics. So, I’m a self-educated idiot.
For argument sake, I’ll assume all the political experts are correct when they blame a President for the economy, good or bad. I went to the web site for the Bureau of Labor Statistics. No, I didn’t give you a link. You can find it for yourself if it is the kind of thing that rolls your socks up and down. I also got data from Dow Jones.
The numbers I’ve used are not statistical gymnastics, but raw numbers from the government and DJ. I went looking because I didn’t know, and wanted to know not because I wanted to prove anything one way or another. So don’t tell me I’m full of it if you don’t like the numbers. They aren’t mine, and I’m not going to draw any conclusions for you. I will simply point out what I see. You may see something else.
Because reporters often imply the Dow Jones Industrials index is a measure of economic performance, I built a chart from their data covering the terms of each President from Jimmy Carter to Dubya. I did this because finding employment data on the web site prior to 1972 was difficult, and inconsistent. No other reason, and I made no effort to graph any of it to see what it looked like before making the cut.
Remember when the DOW was below 2000? It wasn’t that long ago. I’ve outlined the terms of each President for your perusal. Notice how the line dips in 2000, and has now begun to climb again. Maybe the Consumer Price Index tells the story better. I think it is a more accurate indicator for the economy. The numbers up the y-axis are raw percentages of the change December to December.
There are negatives in the past, back during the Great Depression–Herbert Hoover’s time. What this shows is that consumer prices continue to climb, although the rate of increase has been declining since 1980–Jimmy Carter’s term.
How about employment/unemployment? Unemployment is currently around 5.6% which is being called high right now. The next chart shows raw employment numbers for non-government jobs. This is about 67% of the workforce. It was about 68%, but the hiring of all those TSA employees (remember, government workers can do airport security better than civilians) bumped up the government employment numbers.
The number are in thousands, going from zero to 160 million. It is hard to compare how the rates change on this chart, so I shifted and magnified the employment numbers to closely match the values of the unemployment numbers. Remember, these are raw numbers, not percentages. What I get is this next chart.
I simply divided the employment number by 20. This shifted it down, but also magnified the variation so that it is easier to see. As with all the charts, I’ve put overlay boxes to define Presidential terms. Perhaps this is where the mysterious “3 million lost jobs” comes from. Note that the losses began before Bush took office. Note also, though, that employment continued to rise at the same time, although at a flatter rate.
To get a better idea of what was actually happening, I superimposed the employment numbers adjusting so they began at the same point as unemployment numbers.
So I don’t confuse you (I want you to understand, I’m not trying to blow smoke), I simply moved the actual employment numbers down the axis so that the starting point is the same as the starting point for unemployment (about 4 million). To explain what it shows, the number of people in the US employed in jobs not in government was rising when Carter took office, leveled out, the rose again during Reagan’s terms, leveled out during Bush 41, and began rising prior to Clinton, where it continued to climb. It leveled off again during Clinton’s last year, and has recently begun to climb once again. Unemployment has actually been quite stable over the last 30 years, rising slightly. As these are total numbers and not percentages, It looks to me as though that should be expected. I would be curious to see how the numbers looked before Johnson. I may check that later.
Okay. This is probably my longest post ever. Some of you smarter than me may be able to take this data and make something of it. I can’t see anything here that convicts Bush of presiding over the worst economy since Herbert Hoover. Hell, he doesn’t even fail as bad as Jimmy Carter!