Who Creates Jobs? Democratic Presidents Do!

steeplejacks.gifA recent poll asked whether private companies, Congress, or the president has the most to do with creating new jobs. I find it amusing when pollsters ask for opinions on something that is purely factual. Only 5% got the right answer and said it is the president.

Look at the private sector job growth results under Democratic presidents versus Republican presidents. The worst Democrat for job growth since they started keeping track about 70 years ago was Kennedy, and he was virtually tied with the best Republicans for job growth (Reagan and Nixon). Every other Democrat in that time was much better for job growth than every other Republican. Only a very weak similar correlation is seen for Democratic versus Republican Congresses. If you want job growth, you must elect a Democratic president.

Annual
Job
Growth………Party……………President

8.8%………….Democratic…….Roosevelt (1939-war)
3.5%…………..Democratic…….Johnson
3.3%…………..Democratic…….Carter
2.6%…………..Democratic…….Clinton
2.6%…………..Democratic…….Roosevelt (wartime)
2.4%…………..Democratic…….Truman
2.3%…………..Republican.…….Reagan
2.1%…………..Republican……..Nixon
2.1% …………..Democratic…….Kennedy
0.8%…………..Republican…….Ford
0.5%…………..Republican…….Eisenhower
0.4%
…………..Republican…….Bush II
0.4%
…………..Republican…….Bush I

The correlation jumps out at you. Almost every Democratic president has been more successful at creating jobs than almost every Republican president, for as far back as statistics are available.

Creating Jobs
How does the president make a difference? Bush II has made a difference by vetoing a labor bill and a children’s health bill. He has made a difference by having his friends in the Senate filibuster a minimum wage bill (McCain joined on that), an energy bill twice (McCain skipped out on those votes), and a Medicare prescription drug bill (McCain skipped out again). Bush has made a difference by giving breaks to the rich, who don’t need it.

Obama has proposed directly creating jobs by investing in infrastructure improvements and manufacturing of green technologies. He would invest $150 billion over 10 years in jobs related to a new fuel infrastructure, renewable energy, and a digital electricity grid. Obama would increase funding for job training programs for clean technologies. He would put $60 billion over 10 years into an independent National Infrastructure Reinvestment Bank to create jobs the way FDR did — by building infrastructure, including upgrading highways, bridges, roads, ports, air and train systems to strengthen user safety and bolster competitiveness. He would fight for fair trade and invest in sciences and education.

Republicans believe in the trickle-down theory. They think that if you help the rich and the big corporations, that they will use a portion of the money to hire more people, causing money to trickle down to the middle and lower classes. It has never worked, as the table above shows.

Democrats, you might say, believe in trickle-up theory. Help the lower and middle classes. Help the people who spend every dollar of their paycheck. They will buy more goods — goods they needed but could not afford without help. Companies will have to hire more people to produce and sell the additional goods. Those new workers will buy yet more goods, extending the cycle. This works.

Obama would use the trickle-up theory to create jobs by providing affordable health care, by creating a universal mortgage tax credit that would apply even to those who do not itemize deductions, by expanding the child and dependent care tax credit, by creating a tax credit for college expenses, by expanding the Family and Medical Leave Act, and by protecting Social Security.

Does Congress Create Jobs?
How about Congress? Do they make a difference? Perhaps some, but not as much as the President.

The worst Congress in history for job creation was the 107th (2001-2002), with a Republican president, Republican House, and split/Democratic Senate.

There were five Congresses during which we had a net loss of jobs. Four of the five were under Republican presidents. On the other hand, three of the five were under a Democratic House. Three of the five were under a Republican Senate. The correlation is not good for Congress, but it is for the president.

The 12 best Congresses for job creation were under a Democratic House. On the other hand only 8 of 35 Congresses in this period had a Republican House, so that does not say much.

Average job growth under Republican Houses has been 1.1%/year. The average under Democratic Houses has been 2.5%. For Republican Senates it has been 1.6%, while for Democratic Senates it has been 2.6% (excluding the 107th split Senate). This makes a Democratic Congress look good, but the difference is not as big as that between Democratic presidents (3.6%) and Republican presidents (1.1%).

Best of all is to have a Democratic president and a Democratic Congress. When the president and both houses of Congress are Democratic, annual job growth has been 3.7%.

Trickle Down Does Not Work
Private companies, of course, are directly responsible for creating the jobs; but the number of jobs they create is going to depend on their budget. If the government follows trickle-down theory, it will not do as much to put those companies in a position to be able to add to their payrolls as if it follows trickle-up theory. Getting help to the masses does more to improve the cash flow of businesses, so it creates more jobs.

richard_mathews__sapphire2000.gifTrickle-down theory simply does not work. It does not create jobs, so nothing trickles down. It just enriches those who are already rich. That may help the GDP look good, but it doesn’t help most of us.

If you want to get the economy going again, you need to create jobs. To create jobs, we need a Democratic president.

by Richard M. Mathews

Richard M. Mathews is a software developer and manager. He represents the North Valley Democratic Club on the Executive Committee of the Democratic Party of the San Fernando Valley.

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Comments

  1. Richard M. Mathews says

    UPDATE: With today's final job numbers for January, we can now close the books on Bush II. After eight years, the number of private-sector jobs saw a net increase of a paltry 159,000. One month later, we were well below where we had been in January, 2001.

    To put Bush's performance in perspective, Clinton had 74 out of 96 months that each beat Bush's eight-year total (Bush had only 16 such months). Over eight years, Clinton added almost 21 million private-sector jobs.

    Imagine where we would be today if 21 million more people had jobs!

    Bush II's numbers come out to an average rate of increase of 0.02% per year, well below the previous record of 0.39% per year set by Bush I. It is also far below the rate of population increase of 0.9% per year. The country added 22 million people while Bush was in office, and we have not created jobs for any of them. This record is dismal compared to the worst Democratic rate since numbers were tracked, Kennedy's 2.1% per year.

  2. Boyd Waggoner says

    Of the 12 Presidents in past 75 years (since 1933) the six BEST at creating jobs were the six Democrats. The six WORST at creating jobs were the six Republicans. Duh??? And McCain’s economic plan calls for more tax cuts for rich, and Obama’s calls for job creation (see introduction to last debate by Bob Schieffer). For more facts and graphs and visual proof of this HUGE JOB DISCREPANCY LOOK AT http://www.waggonerpost.com

    JOBS could be and SHOULD BE the MOST POWERFUL ARGUMENT for the Democratic Party at this time in the election cycle, but word is not getting out. Get it out if you can.

  3. Fritz Dahmus says

    This whole discussion is crazy. Quit being so frantic and dependant on who the president is for your success! Statistics will tell you anything you want. Job creation might be low because we had very low unemployment in the previous year(s)…look at FDR’s job creation number. We came out of the depression and WWII…..of course his numbers for job creation will be good.

    As long as we have the freedoms to move about and up the economic ladder (as we do/did with every republican and democratic president) we can be successfull. Those who can’t, can be taken care of if we wish (that’s the key…if we wish…freedom). Bill gates, for example is a very generous man (despite being RICH!). This board sounds like a bunch of dependant little babies who want their president to pave the way for their success. Or do you think you are so special…and now we need to help the helpless…with rich people’s money. You want to be helpful(?), donate your time in an inner city public school with a graduation rate of 40%!

    The real issue is freedom to choose (and frankly whether it works or not does not matter). That is what makes this country unique, please don’t erode those freedoms. Freedom of speech doesn’t work…too much information to think about and it is very divisive. But we are used to it and understand people’s right of free speech (with restrictions of course).

    But having said all that….things work or not because of business cycles and our individual ability to react and move around and up the economic ladder. Let’s discuss styles of government on philosophical grounds….not whether they create jobs. Because if you do, you sound petty and hopeless.

    • Richard M. Mathews says

      Funny you should mention donating time to schools. I happen to be a volunteer Member of the Board of Trustees of an educational non-profit that teaches math and science to high school kids. I am in the middle of planning our inner-city recruitment drive based on a grant we have received to waive tuition for under-represented minorities in Los Angeles County.

      We also have a presidential candidate who served on an educational board and taught at a university. You are right that we need more rich people like Bill Gates, who are willing to spread their wealth; and we need more community organizers who will put aside a lucrative career to help others.

      In this article, I specifically split out Roosevelt’s pre-war record in order to make the point that his best job creation (by far) had nothing to do with going into or coming out of WWII. In fact, it was Truman who served when we were coming out of WWII; and his record was poor by standards of Democratic presidents. Whether in peacetime, going into war, or coming out of war, Democratic presidents have created jobs at a high rate.

      Of course, Roosevelt did lead us out of the Great Depression, and that is exactly my point. We need Roosevelt-like policies to lead us out of our current economic mess.

      It is nice to say that we have the freedom to move up the economic ladder, but no business will stay in business long if it hires people when it does not have an adequate revenue stream to maintain that headcount. History shows that Republican policies have led to lower revenue streams and to lower job creation than have Democratic policies.

      We must discuss policies based on whether they work. Do they accomplish their goals? That is not hopeless. What is hopeless is following a policy without regard for its past history of failure.

  4. Mickey says

    You can find concise corroborating information at http://www.waggonerpost.com. Waggoner confirms your premise with dramatic graphs, charts and a video. What they tell us is this: Through the past 75 years the six Democratic administrations have dramatically outperformed the six Republican administrations when it comes to job creation, and this is true of each individual administration. In other words the worst-performing Democratic administration has outpaced the best of the Republicans! Check it out.

  5. fooly says

    Correlation at the macro level. Hard to argue with. Everyone can get down into the minutia of individual programs and votes, etc., but at the end of the day, Democratic Presidents are associated with better job gains.

    Those Roosevelt gains are particularly impressive! Could Obama be another Roosevelt?

  6. Richard M. Mathews says

    UPDATE: Now that we have had 10 straight months of losing private sector jobs — a total loss of 983,000 jobs — Bush II has dropped to having the worst job creation record of any president since records were kept. Since he came into office, private jobs have been created at a rate of only 0.36%/year, which is now below his father’s record of 0.39%/year. Both rates are well below the population growth rate of 0.94%/year. We are almost 5 million jobs short of keeping up with population growth during this administration.

    • norma tadros says

      to all that agreee with this man, what happen? it is now nov. 2010. I guess if we took an average of R vs. D, someone one just changed the entire number for the D’s. Now can we blame current situations on the previous presidents to explain that away?

  7. Richard M. Mathews says

    The private sector is limited in its ability to create jobs to the level of income it is able to achieve. No company can survive if it keeps hiring when it can’t make payroll. Investors cannot invest if they don’t first earn the money.

    History has shown that Democratic presidents follow policies that increase profitability and thus create jobs. By improving the financial condition of the masses, more people can afford the products of the entrepreneurs. That brings increased profit and thus increased jobs. The entrepreneurs are not the “evil rich”, as you call them. They are an important component of this cycle.

    Similarly, government investment in infrastructure removes obstacles that might otherwise keep entrepreneurs from being able to create new products. You can’t invent in the dark. Roads, bridges, sea ports, airports, schools, levees, canals, water, power, telephone, and internet are all needed to enable invention, production, delivery, and marketing of products.

    Presidents can create private sector jobs by pushing for increases in the minimum wage. Presidents can create private sector jobs by helping the poor be able to afford adequate food on the table. Presidents can create jobs by investing in technology, in medicine, in infrastructure, in pure science research, and in the arts. These are policies that have been followed by Democratic presidents.

    Republican presidents, on the other hand, have taken away money from the poor and directed it to the rich. The rich are not evil, but they did not get rich by spending every cent they earned. They stash it away in savings, often in foreign investments. Some of what they do spend ends up in China and Saudi Arabia, where it does not create American jobs. While these trickle-down policies have made Republican presidents popular with people who can afford big contributions to political campaigns, it has not created American jobs.

    • deepblue222 says

      So you are saying that poor people are being taxed, and then that money is given to the rich, correct?

      I never get that paradigm, how you can get rich by taking things from people who never had anything in the first place.

  8. Marc says

    It says here that you are a software developer and manager. I guess you didn’t learn much about economcs.

    Do you care to explain in greater detail how the POTUS (and not the private sector) is responsible for creating non public sector jobs when it is the entrepeneurs and and investors (i.e. the evil rich) who endevour to take risk in order to bring products and services to the market? Without entrepenuers and investors, there would not be any private sector production (and consequently, no private sector jobs). Do you care to explain how the POTUS (who is a very busy person) has time to manage all of the businesses? If he has created all of these jobs on his own, how does he find time to manage all of successful companies in this country?

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