U.S. Economic Performance under Obama and Bush43
August 5, 2010
The most visited blog entry posted on Currency Thoughts was written August 19, 2008 and entitled How the U.S. Economy Performed Under Democrat and Republican Presidencies. That article considered five criteria: 1) the dollar against the D-mark and/or euro, 2) change in the Dow Jones Industrial Average, 3) real GDP growth, 4) employment growth, and 5) consumer price inflation. Each change was expressed in percent per annum, so presidencies of different length could be compared fairly. The 20 years of a Democratic Party administration between 1961 and 2000 were aggregated and treated as a single presidency labeled “Democrat,” and the 20 years when Republicans held the White House were treated as a second single administration labeled “Republican.” The then-unfinished presidency of George W. Bush was also compiled as a third administration separate from the both the Democrat and Republican foils. The basic finding was that the economy performed better on each indicator under the 20 years of Democrat rule than during the composite 20 years of Republican rule. In turn, the Bush administration’s economic performance on each of the five items of comparison was worse than the generic “Republican” administration, that is the twenty years between 1961-2001 when that party held power.
With mid-term elections just three months away, this seems to be a good time to assess Obama’s record and compare such to the full eight years of Bush. Having inherited a severe recession and insofar as the Obama administration has held power for just over a year-and-a-half, I fully expected its grades to be worse in several respects than the full eight years of President Bush, and that was indeed the case. The dollar, stock prices, and inflation have performed better with Obama, but employment and GDP have poorer results under the current administration’s stewardship.
As a way of adjusting for that disadvantage, I also checked the five criteria over the equivalent period of President Reagan’s administration. Reagan inherited an awful inflation problem that could be fixed only by subjecting the U.S. economy to a protracted recession, which commenced six months into his first term of office. In Obama-Reagan comparisons, Reagan’s record outshines Obama’s on the dollar and jobs. Obama’s gets a much higher grade on stock market behavior and GDP growth. I call inflation a draw. True, inflation is much better behaved now than in the early part of the Reagan administration. However, a 7.8% average inflation rate in the first 17 months of the Reagan years represented significant upgrade from 11.8% in the final twelve months of the Carter years.
The results of this updated study are shown in the table below.
| % per annum | Obama | Bush43 | Reagan (01-20-81 to 08-05-82) |
| GDP Growth | 1.1% | 1.7% | 0.1% |
| Employment | -1.6% | 0.1% | -0.8% |
| CPI | 1.6% | 2.4% | 7.8% |
| DJIA | 21.1% | -3.5% | -10.3% |
| Dollar | -1.3% | -4.0% | 14.6% |
Copyright Larry Greenberg 2010. All rights reserved. No secondary distribution without express permission.
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