Thursday, August 26, 2010

What does the data say?

Michael Medved argues that the mass media offers a "melodramatic (and highly partisan) storyline" amounting to a "misleading simplification of the historical record" regarding the economy. He continues, [emphasis mine]
Indeed, looking at the data, it would be more accurate to talk about the "Gingrich boom" and the "Pelosi collapse," than to rant so endlessly about the "Clinton boom" and the "Bush collapse."

Official U.S. government figures show that the two presidents each experienced decisive turning points that shifted the fiscal fate of the nation when voters in midterm elections rejected the party in power.

In Clinton's case, the "Republican Revolution" of 1994 saved his floundering presidency and brought about his reputation for savvy financial management. For George W. Bush, however, the 2006 triumph of Pelosi's Democrats (based largely on Iraq war disillusionment) led straight to disaster, turning a president with a solid economic record into a symbol of catastrophic collapse.

During the first two years of Clinton's term of office, while Democrats enjoyed overwhelming majorities in both houses of Congress, the average unemployment was rate 6.5 percent -- even worse than the 6.3 percent four-year average of his predecessor, George H.W. Bush, who'd been voted out of office because of economic hard times. Following the 1994 GOP congressional takeover (for the first time in 40 years), business conditions dramatically improved, with the unemployment rate declining to an average of 4.77 percent (during the six years the Republicans and Clinton exercised divided rule).

The deficit picture also brightened after tight-fisted Newt Gingrich and his allies captured 53 Democratic House seats and took the initiative on government spending. During two years of all-Democratic rule (1993-94), the federal deficit averaged 3.35 percent of the gross domestic product, but the subsequent six years (under GOP congressional leadership) brought deficits averaging less than zero -- with surpluses from 1998 through 2001.

Some commentators suggest that these figures show that Washington works best when different parties control White House and Congress, but the 2006 midterm victory for Democrats during George W. Bush's presidency spelled economic calamity.

In W's first six years, with his GOP allies dominating Capitol Hill, Bush deficits averaged 1.91 percent of the GDP -- well below the 60-year postwar average. After House Speaker Nancy Pelosi, D-Calif., and Sen. Majority Leader Harry Reid, D-Nev., brought their free- spending ways to House and Senate, deficits soared to a dangerous 4.74 percent over the next two years -- and continued to skyrocket to a projected (and appalling) 10.27 percent for the first two years of Obama.

The unemployment rate went from an average of 5.29 percent during Bush's first six years (with Republican majorities) to 6.57 percent after the Dems came to power -- and an excruciating 9.4 percent (average) during the first 18 months of Obama.

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