Bush’s Economic Legacy: A Final Tally
Five years ago, Forbes magazine performed a worthy public service. The right-leaning business publication that dubs itself, "Capitalist Tool," published a set of criteria by which to judge the economic performance of 10 post-war presidencies. It then evaluated each presidency against that set of criteria.
The criteria themselves are straightforward. They include GDP growth, real disposable personal income, employment, unemployment, inflation, and deficit reduction. All are mainstream metrics of economic performance. Data for each are readily available from public sources and are regularly updated.
It is a measure of Forbes' integrity that it let the chips fall where they may. The top three performers were all Democrats: Clinton, Johnson, and Kennedy. The bottom three were all Republicans: Nixon, Eisenhower, and Bush I. The middle was a mixture of Republicans and Democrats: Reagan, Carter, Ford, and Truman.
Interestingly, however, Forbes didn't use the criteria to evaluate the candidate it was supporting for President at the time, George W. Bush, even though the article was published in July 2004, in the middle of a presidential election. Surely they ran the numbers. One can't resist suspecting that their boy fared poorly for the comparison.
But now, with his two terms ended, it is worthwhile evaluating Bush's performance and comparing it with that of the last Democratic president, Bill Clinton's. The reason for choosing Clinton is that his is the only two-term Democratic presidency since the 1960s and the two are adjacent, sharing similar post-Cold War contexts.
A comparison is also needed because Republicans have taken to criticizing anything Obama, without offering alternatives. But Bush's economic policies were of the exact same ilk as Ronald Reagan's and his father's, George H.W. Bush. They are classic, trickle down economics whose principal purpose is to shift ever more of the nation's wealth to the already wealthy. Bush's policies ARE the Republican alternative so it's important to know the results they produce.
So what do the data show?
The first metric Forbes offered was real growth in Gross Domestic Product. GDP measures all the goods and services produced in the economy in a single year. The "real" part factors out the effects of inflation. It is the most encompassing of all measures of economic performance.
During Bush's eight years in office, real GDP grew by 2.0% per year. Over Clinton's eight years, it grew 75% faster, 3.5% per year. The difference is so great that Clinton actually added more to the GDP in his eight years than Bush did in his, despite having started from a much lower number. Clinton 1: Bush 0.
Forbes' second metric was real disposable personal income. As noted above, the "real" part factors out the effects of inflation. The "disposal" part adjusts for taxes. So real disposable personal income tells us what a person's income actually buys, after inflation and taxes. It is one of the most meaningful measures of economic well-being.
As with real GDP growth, the numbers differ greatly. Bush grew real disposable personal income by 19.6 % over his term. Clinton grew it more than 40% faster, by 28%. And this comparison is understated because the vast bulk of income growth under Bush went to the very wealthiest of income earners. Between 2000 and 2007 two thirds of all the growth in the entire economy went to the top 1%. If average incomes were considered, the difference in performance would be far more stark. Clinton 2: Bush 0.
With employment, the third measure of economic performance commended by Forbes, the differences between Bush and Clinton become monumental. Clinton's economic policies created 23 million new jobs over his eight-year tenure. It was the greatest number of jobs ever created under one presidency.
Bush's record on employment was equally legendary, but for the opposite reason. Despite inheriting an economy that was one third larger than the one Clinton inherited, Bush created a mere 5 million new jobs, one fifth the number created by Clinton. It is the lowest percentage level of job growth ever recorded for any eight year period outside of the Great Depression. Clinton 3: Bush 0.
Employment, of course, is closely related to the fourth of Forbes' measures of economic performance: unemployment. When Bill Clinton took office, in January 1993, unemployment stood at 6.9%. When he left office, it was at 4%, the lowest level since 1969.
When George Bush took office, he inherited Clinton's unemployment number, 4%. When he left office, in January 2009, the unemployment rate stood at 7.2% and was skyrocketing. The economy was hemorrhaging 600,000 jobs per month. Today, unofficial unemployment stands at 9.7%, the second highest rate since the Great Depression. Clinton 4: Bush 0.
Inflation is the fifth measure in Forbes' overall evaluation framework. Inflation can create the illusion of prosperity but it does so by debauching the purchasing power of money. So, it is routinely considered one of the most important gauges of economic performance. Lower numbers are better. Inflation averaged 2.54% per year under Bill Clinton and 2.83% per year under George Bush. Clinton 5: Bush 0.
The final measure of economic performance recommended by Forbes is reduction in the federal budget deficit. Deficits occur when the government spends more than it takes in in taxes. Like inflation, deficits create the illusion of prosperity by spending money borrowed from the future. They are a favored ruse of Republican presidents which have used them relentlessly to deliver fake prosperity over the past three Republican administrations. When the borrowing has to be repaid, which we're coming up on now, the effect will be devastating.
Here, the comparison is off the charts. Clinton inherited a $290 billion deficit from George H.W. Bush. He reversed Bush's and Reagan's trickle down economic policies, raising taxes on the wealthy, and reducing them on the working and middle classes. As a result, he was able to reduce the deficit every single year of his presidency. By 1997, the government was running budgetary surpluses, the first since 1969. He delivered a $230 billion surplus in 2000.
Bush reversed Clinton's policies, lowering taxes on the very wealthy - his "base" as he called them - and effectively raising them on everyone else. In his first full year at the helm of the economy, he delivered a $157 billion deficit, and he never looked back. By 2004, the deficits were topping $400 billion a year. While Clinton delivered surpluses, Bush's deficits totaled some $3.7 trillion over his eight-year term. Clinton 6: Bush 0.
There is no subtlety, no ambiguity about the data or the economic performance they reveal. By every single measure, Bush's policies and tenure were worse - much worse - for the American economy and the American people than those pursued by Bill Clinton. And we are still living today in the aftermath of the destruction they have wrought.
We could add any number of other measures as well, measures not offered up by Forbes but which are still straightforward indices of economic performance. Clinton reduced poverty, from 15.1% when he took office to 11.3% when he left. Bush increased it, from 11.3% when he started to 12.5% at the end of 2008.
The stock market more than tripled under Clinton's tenure. The Dow Jones Industrial Average went from 3,241 when he took office to 10,587 on the day he left. It actually declined under Bush's tenure, from 10,587 on the day he took office to 8,281 on the day he left. Between the recent stock market collapse and the housing crash, Bush destroyed more than $14 trillion in consumer wealth, a staggering, almost incomprehensible legacy of devastation that will haunt Americans for decades to come.
Confronted with such data, Republicans routinely cavil that the comparison is stacked to favor Democrats. But it can hardly be said of Forbes that it is a left-leaning publication. Quite the contrary. Forbes' framework is persuasive precisely because it comes from an unimpeachable Republican source.
And knowing all too well Bush's abysmal record, Republicans try to weasel away from it by claiming that presidents really don't have that much to do with economic performance. Forbes addressed this as well, stating directly, "Fairly or not, each president is judged by how much prosperity is delivered on his watch."
Donald Rumsfeld was fond of saying that people are entitled to their own opinions but they are not entitled to their own facts. The facts are undeniable: Bush's economic policies lose by every measure. He fails not just one but every single comparison. And the differences could not be more dramatic. His policies were a catastrophe for the American people, leaving them poorer, more indebted, and less economically secure.
As Republicans continue to bash Barack Obama it is important to remember that Obama is still trying to clean up the mess left by Bush. It's equally important to keep in mind that they almost never propose any alternative - witness the do-nothing whining about health care.
But when it comes to the economy, the alternative is known. It is specific, it is documented, and it is undeniable. It is the legacy of Bush II, the same enrich-the-wealthy policies that Bush I and Reagan pursued. They are a proven prescription for disaster. Let the buyer beware.
Robert Freeman writes on economics, history and education
