A 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.
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.
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.
Trickle-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.