BERKELEY — A businessman who voted for President Bush four years ago and Bill Clinton in 1996 told me that John F. Kerry's social-program goals "seem good, but I'm worried the Democrats can't manage the economy as well [as Republicans], and they'll get into my wallet." Many voters agree, according to pollsters. But are Republicans better economic managers than Democrats?
Since we entered an entirely new phase of presidential politics 25 years ago, this question has become harder to answer in a full and open manner. Today's campaign imperatives are who can raise the most money and package the most attractive media image, not who can best demonstrate competence and capacity to govern. But fortunately, we don't have to depend on campaign slogans or advertising bucks to frame the debate. We can look to the record.
Here's the Economic Sweepstakes Quiz. The rules are simple. Guess which president since World War II did best on these eight most generally accepted measures of good management of the nation's economy. You can choose among six Republicans -- Dwight D. Eisenhower, Richard M. Nixon, Gerald Ford, Ronald Reagan, Bushes 41 and 43 -- and five Democrats -- Harry Truman, John F. Kennedy, Lyndon B. Johnson, Jimmy Carter and Clinton. Which president produced:
1. The highest growth in the gross domestic product?
2. The highest growth in jobs?
3. The biggest increase in personal disposable income after taxes?
4. The highest growth in industrial production?
5. The highest growth in hourly wages?
6. The lowest misery index (inflation plus unemployment)?
7. The lowest inflation?
8. The largest reduction in the deficit?
The answers are:
1-Truman; 2-Clinton; 3-Johnson; 4-Kennedy; 5-Johnson; 6-Truman; 7-Truman; 8-Clinton.
In other words, Democratic presidents trounced Republicans eight out of eight.
If this isn't enough to destroy the perception that the economy has performed better under Republicans, then let's include stock market performance under Democrats. The Dow Jones Industrial Average during the 20th century rose an average of 7.3% a year under Republican presidents. Under Democrats, it jumped 10.3%, a whopping 41% gain for investors. During George W. Bush's first three years as president, the stock market declined 4%.
Moreover, since World War II, the national debt increased on average by 3.7% a year under Democratic administrations, compared with 9.1% when Republicans occupied the Oval Office. During the same period, Democratic presidents oversaw on average an unemployment rate of 4.8%. For Republicans, it was 6.3%.
That's the historical record. What about current policies?
The Clinton administration presided over the longest peacetime economic expansion in U.S. history. The national debt fell dramatically, the industrial sector boomed, wages grew and more Americans found jobs. In contrast, the Bush administration has presided over the weakest job-creation cycle since the Great Depression, record household debt, the highest-ever bankruptcy rate and a substantial increase of those who live in poverty.
Kerry maintains that government has the responsibility to keep the economy on the right track. Toward that end, he has pledged to reduce the national debt and budget deficit. He would help the middle class and working poor by maintaining current benefit levels and eligibility for the earned income tax credit. Kerry has also promised to restore tax progressivity and fairness by rolling back Bush's giveaways to taxpayers earning more than $200,000 annually. And the Massachusetts senator wants to make significant investments in healthcare, education, affordable housing and the environment.
The president, by contrast, has emerged as little more than a supply-sider in the mold of his father, George H.W. Bush, and his father's former boss, Reagan. The results demonstrate why supply-side policies are sometimes called "trickle-down" economics. Corporate profits have soared 57.5% during the Bush administration, while workers' wages and benefits have increased a minuscule 1.57%.
In less than a year and a half, the Bush administration's sweeping tax cuts, passed by Congress in 2001, wiped out the federal government's 10-year projected budget surplus of $1.6 trillion. In 2000, the budget surplus was $236 billion. Three years later, the surplus had turned into a deficit of $375 billion.
Because Bush believes the free market will solve America's economic problems, he wants to gradually privatize Social Security and Medicare. To finance current government spending -- after having given the wealthiest 1% of Americans 43% of the tax cuts -- Bush is borrowing more heavily from the Social Security trust fund than any previous president. At the same time, the Treasury owes billions to foreign investors who buy Treasury bonds, and thus subsidize the national debt, which has soared by 29%, to $7.3 trillion.