Economy Always Does Better Under the Democrats V

By JOHN HARWOOD– New York Times

In 2004, when fewer people paid attention to him, Donald J. Trump gave CNN a bottom-line assessment of political parties: “It just seems that the economy does better under the Democrats.”

If that sounds awkward now for Mr. Trump, who leads opinion polls for the Republican presidential nomination, it may be even more awkward for his party next year, because its ability to claim superior economic know-how over Democrats has grown weaker ever since he made that assertion.

Like his rivals, Mr. Trump offers the familiar Republican recipe of tax cuts to spur growth and create jobs. But on the economy, Republicans have a data problem.

The party still likes to invoke its success under President Ronald Reagan, who cut taxes after defeating Jimmy Carter in 1980. By the mid-1980s, stagflation had turned into an economic boom.

But neither of the two subsequent Republican presidents fared as well compared with their Democratic successors. That has left the party vulnerable in three ways.

One is the most prominent economic indicators. During the single term of the first President George Bush, growth slowed, while unemployment and budget deficits grew.

Those measures improved under his Democratic successor, Bill Clinton. Growth accelerated to an average annual rate of 3.8 percent, exceeding the level under Mr. Reagan. Unemployment fell to 4.2 percent, from the 7.3 percent he inherited. The budget moved from deficit to surplus.

They went backward again under President George W. Bush, who cut taxes in his first year. But his second term ended in financial crisis and recession, with unemployment at 7.8 percent. The budget surplus became a trillion-dollar deficit.

Growth has remained modest under President Obama, but unemployment has dropped to 5.1 percent since the recession ended five months into his term. The budget deficit as a percentage of the overall economy has fallen to 2.5 percent from 9.8 percent.

A second problem for Republicans stems from their own rhetoric. Mr. Clinton and Mr. Obama pushed through tax increases despite warnings from partisan adversaries. Among many other Republicans, the current presidential candidates Marco Rubio, Ted Cruz, John R. Kasich and Jeb Bush all denounced the “job-killing” consequences of Mr. Obama’s policies.

Yet the economy gained 2.9 million jobs in 2014, more than in any year since 1999, during Mr. Clinton’s term. Net job creation during the 15 years that Mr. Clinton and Mr. Obama occupied the White House has topped 30 million. That is 50 percent more than were created in the 20 years of Mr. Reagan and both Mr. Bushes.

A third problem for Republicans is the comparison between the United States and its international counterparts. As Mr. Obama’s tenure began, the recession in the United States was dragging down other advanced industrial countries.

Today, the United States has the strongest major economy in the world. According to data compiled by a Moody’s economist, Mark Zandi, the United States had higher economic and job growth than Australia, Britain, Canada, Germany, France and Japan in the 12-month period through June 2015.

“‘Strongest’ is of course quite different from ‘strong,’” said Keith Hennessey, an economic adviser to the younger President Bush. Wages for average families have barely budged under presidents of both parties for a generation.

In any case, economic data cannot resolve arguments over specific policies. The role of business cycles, technological innovation and demographic change, not to mention Congress and the Federal Reserve, can exceed the influence of presidents on economic performance.

In an interview, Jeb Bush argued that the Clinton-era economy benefited from a budget deal that his father forged. His brother’s record, he added, suffered from “big secular events” like the Sept. 11 terrorist attacks and the bursting of the high-tech bubble.

But the language of election argument begins with a simple concept: on whose watch. Which means that, among Mr. Trump’s contentious statements, his words about economy and party may be harder than most to explain away.


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