The D.C. Republicans Are Wreckers
Modern history clearly demonstrates that the economy does much better under Democratic presidents and that GOP presidents wreck that progress. According to a Forbes article dated November 7, 2016: “ It is simply a fact that since World War II, Democratic presidents have seen 24.4 million more jobs created on their watch — an average of 78.6% more jobs created per year of Democratic administrations — than have Republican presidents. Ditto real GDP growth, 44% higher under Democratic presidents. On the flip side, unemployment has been 18% higher under GOP presidents.”
Many would be surprised to learn that the stock market does better under Democratic presidents. The two best presidents for the stock market in modern history are Bill Clinton and Barack Obama. During the Clinton years, the stock market saw an annualized return of 17.5%. Under Obama, it was 16.25%. They even did better than Republican icon Ronald Reagan whose tenure saw a 15% annualized return. The worst years for the stock market were under George W. Bush and Herbert Hoover.
The low point for the economy overall in the recent past was during the Bush 43 Administration. By the time Bush left office, the economy had collapsed and was hemorrhaging 800,000 jobs per month. According to Ron Brownstein: “ 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.”
Bush was the only two term president in American history to preside over a decline in middle class incomes during his two terms as president. Moreover, Bush had the worst job creation record since Herbert Hoover.
Bush passed onto Obama probably the worst situation any incoming American president had faced since the dark days of the Great Depression in March 1933. Despite eight years of near treasonous obstruction from the GOP, Obama had turned around the economy by January 20, 2017 and left Trump with a strong and growing economy.
By the time Obama left office, he had reduced the unemployment rate he inherited from Bush from 10% to 4.6%. In 2016 alone, the economy added 2.45 million jobs. Moreover, since the end of the Bush recession in early 2010, the economy had added 15.6 million jobs. That is the best record of job creation since Bill Clinton’s second term. In contrast, a net 3 million jobs were added during the eight years of the Bush Administration.
Beginning in 2015, the economy began to create good jobs and working families experienced real wage growth for the first time since the Clinton Administration. According to the Census Bureau, real median household income increased by 5.2% between 2014 and 2015, while the official poverty rate dropped from 15% to 13.5%. The 5.2% growth was the largest, in percentage terms, since the 1960s. In 2016, hourly pay increased 2.9% from a year earlier, the biggest increase since 2007.
Since Trump took office on January 20, 2017, the economy has deteriorated in many important respects. The rate of job creation has slowed down since Trump took office. According to Betsey Stevenson, an economist at the University of Michigan: “If you take a look at President Obama’s second term, he was adding 217,000 jobs per month. And since Trump assumed the presidency, he’s been adding 189,000 jobs per month. I’d say those are roughly around the same ballpark. But I don’t think Trump should be bragging that he’s somehow doing something that President Obama wasn’t doing.”
The most disturbing aspect of Trump’s record is that middle class wages have stagnated since the GOP borrowed $2 trillion for a tax cut for the rich — while at the same time corporate profits have soared. Since Trump and the D.C. Republicans cut taxes last year, inflation has risen 2.9% while average hourly earnings grew only 2.7%. Since Trump has taken office, the inflation rate has doubled and that increase has gobbled up any increase in middle class wages.
While wages have shrunk for most Americans, the farm sector has been rocked by Trump’s foolish trade with China and our allies. As a result of Trump’s reckless trade policies, China has ceased purchasing U.S. soybeans. That has driven soybean prices to their lowest level since 2008. The $12 billion in farm welfare payments that Trump issued by executive fiat (and without Congressional approval) have barely made a dent in farmers’ losses. The farm economy is at its lowest point since the farm crisis during the Reagan Administration.
While Trump has disrupted the international trading system that has been in place since 1945, he and the Republicans in Congress have also blown up the deficit by passing a tax cut in which 80% of the benefits will eventually go to the wealthiest 1% in America. Due to this risky tax scheme, Trump has doubled the annual deficits he inherited from Obama. The annual deficits are now $1 trillion and will rise to $2 trillion when we have a recession.
This huge increase in the deficit has over heated the economy and spiked interest rates. What Trump and the GOP did was stimulate an economy which was at near full employment. That counter intuitive and reckless decision has destabilized the stock market due to justifiable interest rate and inflation concerns. When an economy is at near full employment, the proper strategy is to reduce the deficit — not blow it up.
The historical pattern is now repeating itself. Bill Clinton oversaw an economic boom and a record $5 trillion surplus only to see George W. Bush wreck it. Similarly, Obama cleaned up Bush’s mess and now Trump is threatening to destroy Obama’s hard won progress on the economy.
The problem we Democrats have is that we get complacent after eight years of a successful Democratic president. In 2000, millions of Democrats voted third party and put Bush in the White House. In 2014 and 2016, millions of Democrats stayed home or voted third party. That apathy and over confidence in the last two election cycles delivered all three branches of the government to the wreckers in the GOP.
Winning in 2018 is the first step to cleaning up the mess that is now being created by Trump and the D.C. Republicans. The polls currently look encouraging but we can’t get over confident. We need to sprint to the finish line and win this election!