I wrote recently about how Democratic presidents create many more jobs than do Republican presidents. What about the rest of the economy?
I don’t want to talk down the economy as George W. Bush’s team did when he was running for president in 2000. They insisted that the economy was not as strong as all the numbers indicated it was. They eroded consumer confidence, and they started the collapse of the economy we have seen under the Bush administration.
It would be hard, though, to overstate the dangers we face. Both Sens. Obama and McCain have spoken of the economy being in a crisis. With IndyMac, we have seen the second largest bank failure in U.S. history. With Lehman Brothers, we have seen by far the largest bankruptcy in our history, dwarfing the WorldCom and Enron failures of a few years ago that were the previous record holders. Bear Stearns and Merrill Lynch are no more. Fannie Mae and Freddie Mac have failed as private companies.
Who would have thought that the Fed would go into the insurance business, taking over AIG, one of the world’s largest insurers? Jefferson County, Alabama, could declare one of the largest municipal bankruptcies in history. The city of Vallejo, California, has declared bankruptcy. Hopefully the state of California will soon have a budget and avert a terrible fiscal crisis. The governor of New York has warned that they, too, are in danger of seeing their credit rating fall.
Table of GDP Growth by President
Deregulated private companies allowed greed to lead them into doom. Through foreclosures and bank failures, they are pulling down many good people with them.
We need to change our fiscal policies and reverse the Republican tendency to deregulate everything. Which party is more suited to bring about this change?
As with the jobs numbers, we can look at inflation-corrected GDP going back to 1929. We can rank the presidents by the annual rate of GDP growth during their terms. As with the jobs numbers, almost all of the Democratic presidents come out on top. Except for the post-WWII period of Harry Truman, every Democratic president has overseen greater growth in GDP than every Republican president.
Can Congress take any credit or blame for these economic differences? Unlike the presidents, the party of Congress does not correlate well with the state of the economy. The economy does better on average with a Democratic House than a Republican one, but not by as much as with a Democratic president versus a Republican. The reality is that Congress almost always passes a budget that is very similar to the one that the president proposes. If they veer off too much from the president’s proposed course, they risk a veto.
It is not even necessary to wait for a budget to be passed for a president to have an effect. Knowledge of the president’s plan will start to affect consumer confidence from the day of the election. As soon as the president comes into office, his directives to executive departments will affect the way government is run such as setting priorities for helping workers or building infrastructure. He will quickly start pushing for bills to implement his agenda, including changes to taxes, to labor relations, to national security strategy, etc. All of these affect national income and job creation.
Sen. Obama will make some serious changes we will not see from Sen. McCain.
- He will continue increases in the minimum wage that match inflation.
- He will bring tax cuts to those who really need them, the middle class and small-business owners.
- With fair trade, he will keep jobs in America.
- He will build infrastructure, which will both create jobs and enable business that depends on that infrastructure.
- He will bring back much-needed regulation of financial businesses and fairness in bankruptcy laws to prevent the abuses in the finance industry which have created the current crisis.
- He will tax Exxon Mobil’s excessive profits and provide an energy rebate to all of us.
- He will fund five million green jobs.
- He will give workers the opportunity to fight fairly for good contracts.
- He will make big investments in renewable energy and conservation, rather than following a policy of “drill-baby-drill” that will only further our addiction to fossil fuels.
- He will push for the technological innovation, and the jobs that come with it, to have us eventually produce half as much greenhouse gas as Sen. McCain would.
by Richard M. Mathews
Richard M. Mathews is a software developer and manager. He is an elected member of the Los Angeles County Democratic Central Committee and represents the Democratic Neighbors of the 38th AD on the Executive Committee of the Democratic Party of the San Fernando Valley.
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Poster by Aaron Trask