U.S. Consumer Price Inflation Under Different Presidencies
September 24, 2008
Consumer price inflation provided the biggest surprise to me when I compared five economic vital signs in the twenty years when the president was a Democrat between 1961 and 2000 to the other twenty years when the president was Republican. Inflation averaged 4.0% per annum in the first control group and 5.1% when a Republican occupied the White House. How could this possibly be given the double-digit heights that inflation hit on Carter’s watch? Of the eight presidencies during 1961-2000, the three with the lowest per annum rate of inflation belonged to the other three Democrats: Kennedy (1.1%), Clinton (2.6%) and Johnson (2.9%). Those presidencies consumed 16 years, four times the length of Carter’s term when consumer prices increased 10.4% per annum. Two of the Republicans, Ford (7.0% per annum) and Nixon (6.2%), had pretty dreadful inflation records. Prices were not stable by the standards of the last 15 years under Reagan (4.2% per annum) or Bush41 (also 4.2%), either. The Bush43 years (2.9% per annum) not only saw lower inflation than during all four of the previous four Republican administrations, individually and collectively, but also lower than what the four Democrats collectively delivered. It was the only criteria among the five appraised in my blog entry of August 19th in which the current president was in the top tier, not bottom place.
Another way to rate the inflation track records of each president is by the difference in the inflation he inherited upon taking power and the rate when he left office. The least effective guardian of the dollar from that standpoint was the Nixon presidency, which entered office in January 1969 when inflation was 4.4% and left in August 1974 with a CPI rate of 11.9%. By comparison, inflation under Carter climbed by 6.6 percentage points from 5.2% in January 1977 to 11.8% in January 1981. Inflation also rose during the stints of Clinton (0.4 percentage points to 3.7%), Bush43 (1.7 percentage points to 5.4%) and Johnson (3.1 percentage points to 4.4%). By contrast, CPI inflation fell during the Kennedy years (0.4 percentage points to 1.3%), Reagan years (7.1 percentage points to 4.7%), Ford era (6.7 percentage points to 5.2%), and Bush41 years (1.4 percentage points to 3.3%).
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