Why elections matter: the economy always does better under Democrats

Posted by AzBlueMeanie:

For those of us who read a lot of economic research and data the information below is not new, it is accepted historical fact. But the media villagers and Beltway bloviators who get paid to sell you the snake oil of faith based supply-side "trickle down" GOP economics work hard at confusing the average American who does not have the time or the inclination to learn or understand economics.

Jon Perr at Perrspectives.com/blog has put together a handy-dandy fact sheet to make it easy for readers to cut through the bullshit. Shorter version: the economy always performs better under Democrats. Why Americans Trust Democrats to Fix the Economy:

[W]hen it comes to GDP, employment, the stock market or just about any other measure of the health of American capitalism, the historical record is clear: the economy almost always does better under Democrats.

While the economy and American workers continue to struggle, President Obama's stimulus program and other dramatic steps prevented the Bush Recession from becoming the Bush Depression. The overwhelming consensus of economists has concluded the $787 billion stimulus program was a success and is on target to add up to 3.7 million news jobs and 4% to GDP by the end of the year. And with states teetering on the brink of fiscal calamity even as the long-term jobless continue to suffer, President Obama and the Democrats have pushed for a $50 billion package of unemployment benefits, Medicaid subsidies and other aid to the states.

And the Republicans said no to all of it. With their unique combination of economic know-nothingness and cold-blooded class warfare, Congressional Republicans instead block the extension of unemployment benefits even as they press to make the Bush tax cuts permanent and eliminate the estate tax. While the latter will costs the Treasury billions even as it lines the pockets of the heirs to the largest fortunes, the former produces red ink as far as the eye can see. To rationalize it all, Republican born-again deficit virgins including John Boehner, Jon Kyl and now Mitch McConnell pretend that there is "No evidence whatsoever that the Bush tax cuts actually diminished revenue." But despite their myth-making, the numbers tell the story: the Bush tax cut windfall for the wealthy accounted for almost half the budget deficits during his presidency and, if made permanent, the lion's share over the next decade as well.

But the biggest reason Americans still trust the Democrats to deliver in the future is because the Party almost always did in the past. As for the GOP, well, not so much.

The verdict on President Bush's reign of ruin was pronounced even before Barack Obama took the oath of office. January 9, 2009, the Republican-friendly Wall Street Journal summed it up with an article titled simply, "Bush on Jobs: the Worst Track Record on Record." Just days after the Washington Post documented that George W. Bush presided over the worst eight-year economic performance in the modern American presidency, the New York Times on January 24 featured an analysis ("Economic Setbacks That Define the Bush Years") comparing presidential performance going back to Eisenhower. As the Times showed, George W. Bush, the first MBA president, was a historic failure when it came to expanding GDP, producing jobs and fueling stock market growth.

But it was the release of a Census Bureau report in September ("Income, Poverty, and Health Insurance Coverage in the United States: 2008") which in 67 pages laid bare the economic devastation and human toll during the Bush presidency. As The Atlantic ("Closing The Book On The Bush Legacy") rightly noted, "It's not a record many Republicans are likely to point to with pride":

On every major measurement, the Census Bureau report shows that the country lost ground during Bush's two terms. 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. By contrast, the country's condition improved on each of those measures during Bill Clinton's two terms, often substantially.

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The extent of the failure by Jeb's brother was particularly glaring when it came to employment and job creation. The dismal 3 million jobs created under President Bush didn't merely pale in comparison to the 23 million produced during Bill Clinton's tenure. As the reliably Republican Wall Street Journal summed up its interactive table on the subject, "Bush on Jobs: The Worst Track Record on Record." In September 2009, the Congressional Joint Economic Committee charted Bush's job creation disaster, the worst since Hoover:

Sadly for Jeb Bush and his Republican allies, the GOP's pitiful record on the economy isn't limited to his brother. History shows that from GDP growth and job creation to managing the national debt and producing gains for investors, it is the Democratic Party which is the friend of Wall Street and Main Street alike.

As the New York Times detailed in January, across almost every indicator (article here, charts here), Democrats outperformed their Republican counterparts:

For the investor class so fond of perpetuating the myth of Republicans' superior economic stewardship, the collapse of the stock marketing during the Bush recession must be particularly galling. The Standard & Poor's 500 spiraled down at annual rate of 5.6% during Bush's time in the Oval Office, a disaster even worse than Richard Nixon's abysmal 4.0% yearly decline. (Only Herbert Hoover's cataclysmic 31% plunge makes Bush look good in comparison.)

As it turns out, as the New York Times also showed in October 2008, the Democratic Party "has been better for American pocketbooks and capitalism as a whole." To make its case, the New York Times asked readers to imagine having put their money where its mouth is. Contrary to Republican mythology, Americans fare better – much, much better – under Democratic administrations:

As of Friday, a $10,000 investment in the S.& P. stock market index would have grown to $11,733 if invested under Republican presidents only, although that would be $51,211 if we exclude Herbert Hoover's presidency during the Great Depression. Invested under Democratic presidents only, $10,000 would have grown to $300,671 at a compound rate of 8.9 percent over nearly 40 years.

(For the eye-popping chart of the S&P's performance under each of the presidents from Hoover through Bush 43, visit here.)

As the broader record shows, the best path to prosperity is to elect Democratic presidents.

The superior performance of Democratic presidents covers virtually the entire spectrum of economic indicators. As Elliott Parker of the University of Nevada, Reno detailed in a 2006 paper, since 1949 Democratic administrations have done better than Republican ones when it comes to unemployment (5.2% to 6.0%), job creation (-.0.4% decrease in unemployment, compared to 0.3% increase), GDP growth rate (4.2% to 2.9%), and even corporate profits as a share of GDP. And to be sure, he found the Dow benefits from Democrats in the White House.

There's no shortage of studies to show that stock market returns are higher under Democratic leadership. (As it turns out, Wall Street's performance is also better when Democrats control Congress.) In 2000, Pedro Santa-Clara and Rossen Valkanov of UCLA's Anderson School of Business concluded that "that the average excess return in the stock market is higher under Democratic than Republican presidents – a difference of 9 percent per year for the value-weighted portfolio and 16 percent for the equal-weighted portfolio." As the New York Times noted of UCLA study in 2003:

"It's not even close. The stock market does far better under Democrats

…Professors Santa-Clara and Valkanov look at the excess market return – the difference between a broad index of stock prices (basically the Standard & Poor's 500-stock index) and the three-month Treasury bill rate – between 1927 and 1998. The excess return measures how attractive stock investments are compared with completely safe investments like short-term T-bills.

Using this measure, they find that during those 72 years the stock market returned about 11 percent more a year under Democratic presidents and 2 percent more under Republicans – a striking difference."

In 2002, Slate similarly concluded that "Democrats, it turns out, are much better for the stock market than Republicans":

Slate ran the numbers and found that since 1900, Democratic presidents have produced a 12.3 percent annual total return on the S&P 500, but Republicans only an 8 percent return. In 2000, the Stock Trader's Almanac, which slices and dices Wall Street performance figures like baseball stats, came up with nearly the same numbers (13.4 percent versus 8.1 percent) by measuring Dow price appreciation. (Most of the 20th century's bear markets, incidentally, have been Republican bear markets: the Crash of '29, the early '70s oil shock, the '87 correction, and the current stall occurred under GOP presidents.)

According to almanac editor Jeffrey Hirsch, the presidential party figures are among the most significant he's found. If the stock market were random, we'd expect such a result only one-quarter of the time. "I don't know why people are convinced Republicans are good for the stock market," Hirsch says.

Why? Because Republicans and their water carriers continue – with great success – to perpetuate the myth that the regulation-free policies of the GOP that so benefit them personally somehow help the American people overall.

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In the mean time, conservatives will accuse Barack Obama of being a "socialist", a "communist" or worse. Unfortunately for Republican propagandists, the words of Harry Truman are as true today as when he uttered them generations ago:

"If you want to live like a Republican, vote Democratic."

0 responses to “Why elections matter: the economy always does better under Democrats

  1. Editor’s Note: You have hijacked the comments long enough. Give it a rest lady.

  2. Who is being emotional, Alissa? Read your rant. I am well aware of the status of this case. I did not suggest the timing of the complaint to the Feds. But in any event it would not be unusual for evidence discovered during the course of litigation to be referred to the Feds where warranted, it does not require any court order as you believe. It is you who wants to rush to judgment with incomplete evidence with your comments here. “Obstruction of justice” is a criminal allegation, and is defamation if false. Terry Goddard is a public figure, which requires the Times v. Sullivan actual malice standard. Your comments certainly exhibit malice.

    The AG has prosecutorial discretion – a far different animal from obstruction of justice. Just because you disagree does not make it obstruction. The wheels of justice turn slowly as Mr. Risner knows well. I am waiting for the evidence in his case to resolve before I write about it. I want to see what develops. That’s my right of editorial discretion, and professional judgment. But you have your panties in a twist because I will not write the post that you want me to write when you want me to write it. So you turn to personal insults about me and my practice, about which you know nothing. I have allowed your little temper tantrum to temporarily hijack this blog, so you have accomplished your goal of ranting about Terry Goddard. But this will be the last exchange on this subject I will allow due to your bad behavior.

  3. Yes, your emotion is clearly heard and noted. A responsible attorney would await the outcome of a court case in which culpability is at issue before filing a complaint with the US Attorney’s Office or DoJ. No sensible officer of the court proceeds without a court ruling backing him up, especially in such a politically sensitive case. As you know, being intimately familiar with the case and all, this litigation is ongoing. Bill Risner is now deposing Iron Mountain staff to find out who had access to the ballot boxes. The problem with bringing the guilty parties to justice in this lengthy litigation is that our own AG, Terry Goddard, stands in the way. He obstructs justice by making the fact-finding process more onerous. This, from an attorney general sworn to support the Constitution and laws of the state of Arizona. You may be a litigator, god help us all, but you do not seem to have a grasp of the thorny roadblocks presented in bringing to justice individuals who are high up on the state’s power structure. Risner has previous experience with bringing in the Feds with another case of election fraud in Arizona and justice did not prevail when it should have. I am amused by the image of you telling opposing counsel to “prove it”. What a pleasure you must be to litigate with and against. You read a lot into Risner’s discretion in not immediately rushing forth with complaints about criminal activity. Am I right? Or are you just another party loyalist?

    My name is Alissa Johnson. The Weekly Intercept is a product of blogs like yours and the Tucson Weekly who, for apparent political reasons, fail to tell the truth on these important issues.

  4. Liss or Interceptmedia at weeklyintercept.blog: I have read the articles at the Tucson Citizen and Tucson Weekly. I am also intimately familiar with this case and the election integrity advocates pushing this story. If Bill Risner believes he has actual evidence of election fraud and/or vote tampering, he has an obligation to take that evidence to the U.S. Attorney for Arizona and to the Voting Rights Section of the U.S. Department of Justice for investigation. I have not received word that he has done so, which suggests to me that he is not as confident in the evidence as you speculate. As I would tell any attorney in a case I am litigating, if you think you have a case, “prove it.” You, however, are not going to litigate this case in comments left on this blog. Write about it on your own blog. Do I make myself clear?

  5. Elections should matter. So should election integrity. If the plan is any threat to the status quo how else can the Democrats then go ahead and “fix” the economy the way you describe?

    That’s why it’s essential to report and get to the bottom of the missing poll tapes in the RTA election. How much confidence could you have in the Pima County Elections Division? The Tucson Weekly has covered this issue, shouldn’t this be an important issue to the Democrats, regardless of who may be involved with sweeping it under the rug?

    http://www.tucsonweekly.com/TheRange/archives/2010/07/18/missing-poll-tapes