A Concise Summary of Macro Performance under the Presidents

From “Economic Setbacks That Define the Bush Years”:

“No matter who took office in 2001, they were destined to oversee dashed expectations regarding the economy, the markets and the geopolitical outlook,” said Robert Barbera, the chief economist of ITG. “It was all captured in the lunacy of the $5 trillion surplus on the horizon. That vision required no wars, no recessions and a nonstop spectacular bull market for equities.”


That said,” he added, “it certainly did not have to come to this.”


That’s the understatement of the year. [1] [2]


presidents_compared.gif

Chart from Floyd Norris, “Economic Setbacks That Define the Bush Years,” NYT, 24 January 2009.

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42 thoughts on “A Concise Summary of Macro Performance under the Presidents

  1. Rob W

    This flawed information must have come from a Neo-Con. Just looking at inflation makes this a joke.
    We know gasoline went up 400 percent until everything crashed. Food is still twice what it was only two years ago. I can’t buy a can of diced tomatoes for less than a dollar. It used to be four for a dollar.

  2. calmo

    Official inflation…not your regular can of tomatoes, Rob.
    A sobering look at this administration, Menzie, but I wonder if it doesn’t omit the darker side. Not the foreign policy debacles but those industries that did pretty well under this administration. An account of these companies is likely to shed some light on that old question of whether this administration is merely incompetent or pretty impressively competent at serving a few.

  3. Bryce

    Menzie
    I view Bush as a disasterous president. Nick Gillespie in the WSJ describes well how he has expanded the size of government, expanded regulation massively, added to the structural deficit, etc. But as a sophisticated economist, I would expect you to recognize that most of the harm he will do will have effect after he is gone rather than during his administration.
    Would you blame Obama for the horrible year of 2009 will be? It is no different than the Dot.com bubble collapse that Bush inherited. Of course it would be silly to blame Clinton for that either. Clinton didn’t cause that collapse anymore than he caused the boom. He looks good in the stats above, but his main virture is that he was unable to do much harm by distractions & Republican opposition (he did permit capital gains reduction & welfare reform).
    This kind of associating economic growth with the term of office of a particular president is beneath an economist of any understanding. Macoeconomic cycles have a lot more to do with credit expansion cycles; they overwhelm the effects of various administrations’ policies, which tend to have more long run effects–unless they are particularly stupid like FDR’s NRA or his confiscatory tax increases.

  4. acerimusdux

    Twenty years ago, when I worked in a supermarket, a can of tomatoes cost about 39 cents. At 4% inflation, that would be 85 cents today; at 5% inflation, it would be $1.03.
    And, if you are going to count when prices go up, you have to count what goes down as well. When “everything crashed”, well…everything crashed. Oil isn’t that much higher than when Bush took office. Digital cameras are probably a third of the price they were 8 years ago.

  5. prophets

    it’s hard to take these numbers very seriously, without including productivity as a backdrop to understand why GDP/inflation performs better or worse in certain time periods (ie. the internet boom under clinton).
    i guess it’s always nice to look at numbers that people selectively want you to see…

  6. jg

    Oh, Professor, just wait four years to see the numbers for O-; Bush was year one of the five year Greater Depression, O- will be years two through five.
    Presidents get too much credit and too much blame for the economy, and O- will be the recipient of much, much blame.

  7. Joseph

    I have often marveled at the embrace of Republican administrations by conservative businessmen when the data clearly shows, with the exception of Reagan, that Democratic administrations far out-perform, both in the stock market and the general business economy. I have concluded that the bottom line for conservatives is personal income taxes. If their taxes go down, they win big and to heck with the rest. That is all that matters to them, so Republicans it is.

  8. Brian

    Does anyone really think presidents can greatly impact these numbers?
    Also, the best measure of economic progress, productivity growth, was actually pretty good during the Bush years. I doubt it’s a result of Bush policies either, but if you (mis)credit him for the bad he should get (mis)credited for the good.
    The real question is why people compare economic statistics over presidencies rather than over tenures of fed chairmen. Lags should also always be used.

  9. Chris

    I think that the president is given too much credit for economic performance.
    I prefer to focus on the things the president has control over:
    1) Foreign policy: disaster
    2) Natural disasters: disaster
    3) Regulation: disaster
    4) Income distribution: disaster
    Item 3) feeds into GDP growth, so I guess Bush can take blame for that also. On the other hand, item 4) may be a positive for GDP.
    I would rank Bush the worse president in my life time (post 1957), but only the third worse president in U.S. history, after Pierce and Buchanan. Hey and I donated $500 to the guy’s first campaign.

  10. Heterosexual

    “I can’t buy a can of diced tomatoes for less than a dollar. ”
    If you are getting your tomatos from a can, you have bigger problems to worry about than economic data.
    “I would rank Bush the worse president in my life time (post 1957), ”
    Advertising ignorance of basic history is nothing to be proud of. When did a low IQ become a badge of honor.
    “Also, the best measure of economic progress, productivity growth, was actually pretty good during the Bush years. ”
    You see, that is why that metric is not important.
    “i guess it’s always nice to look at numbers that people selectively want you to see…”
    If leftards were honest, they would no longer have a religion to follow (well, other than Islam).

  11. Heterosexual

    Inflation?
    When GWB entered office, 1 GB of RAM cost $2000. Now it costs $40.
    An iPod Classic ($300) had 5 GB of storage. Now it has 160GB of storage at the same price.
    There was no Wi-Fi router available for any price. Now, a good one can be had for $30.
    Inflation is in the eye of the beholder (or rather, the ideology of the leftard).

  12. Sandman

    “If leftards were honest, they would no longer have a religion to follow (well, other than Islam)”
    If the rightards were honest, they would tell their followers Jesus was a tall jewish guy with a big noise, brown skin and had dark, sorta curly hair.
    Go whine some other place buddy.

  13. RN

    Heterosexual said:
    “When GWB entered office…there was no Wi-Fi router available for any price.”
    That’s the funniest thing I’ve read in days. Thank you for it. As we all know from the last 8 years of watching Dubya, right-wing brainlessness can be good for more than a few laughs.
    But this one is downright Homer Simpson brainless, fall-off-your-chair funny.

  14. John Lee

    at RN : Of course, did not you know that GWB invented the Wi-Fi Router and Cheney the tomato soup, with a price now more than a dollar ?

  15. Heterosexual

    “If the rightards were honest, they would tell their followers Jesus was a tall jewish guy with a big noise, brown skin and had dark, sorta curly hair. ”
    Who said otherwise? I am neither white nor Christian (as a result, you now hate me much more).
    Your low-IQ comment shows that while normal people understand leftards fully, leftards are incapable of understanding normal people. This is because leftism is the emptier of the two belief systems.
    Now I expect the typical left-wing racism to manifest in your response to a non-white, not-Christian non-leftist.

  16. Heterosexual

    RN,
    er…you are ignorant. There was no Wi-Fi router on the market in Jaunary 2001. 802.11b products emerged in early 2002. Of course, facts never matter to leftards.
    Plus, you hid from my other points in cowardice (the dominant leftard trait). So you have lost the debate.
    I used to think leftism could still attract people with IQs of 80, but now the ceiling appears to be around 70 or so.

  17. Heterosexual

    Hmmm…
    So the suggestion from this article is that a) Presidents control the economy during the exact dates of their terms, and 2) Democrats are better than Republicans.
    OK. So that means in 8 years of Obama, we can expect nothing less than :
    1) 4% GDP growth
    2) 25 million jobs
    3) 10% annual growth in the S&P500
    OK. Now that this has been promised, it will have to be delivered.
    (watch the leftards hide in cowardice from manning up to this expectation).

  18. Heterosexual

    I see that the article conveniently omitted the two things that were good under Bush :
    1) Productivity
    2) Unemployment rate.
    It is surprising that they included inflation, given that it does not fit the narrative.

  19. Neil C

    If the United States were a dictatorship, then it might be fair to compare GDP growth under each dictator.
    However, while it is obvious that the GDP under ‘W’ was not stellar, Norris might have been more informative by noting that it was the Newt Gingrich led Congress, that produced the economy while Clinton was president. To Clinton’s credit, he didn’t veto any of the Republican produced budgets.
    One problem with America’s so-called ‘news’ media is that most reporters and commentators want to be pundits, not journalists.

  20. Peter Schaeffer

    The Treasury debt numbers are not based on public debt (the actual debt of the United States government). See http://www.treasurydirect.gov/NP/BPDLogin?application=np for the numbers. The public debt of the U.S. is around 40% of GDP. This is relatively low by international standards. It is up from around 37% when Bush took office.
    Using total debt (including intergovernmental holding) and ignoring inflation and GDP growth makes for a “better” story. However, it is misleading (if not dishonest) at best.

  21. Heterosexual

    “This is a tough room.”
    Actually, it is a effete, girlie-man, lefty room. More proof that leftism is a religion, which requires them to turn people into satanic demons of omnipotent power (Bush, Cheney, Rove, Palin).
    It is a retty empty, low-IQ religion at that.

  22. Ken

    “Does anyone really think presidents can greatly impact these numbers?”
    I don’t. But if they are going to claim credit when things are going well, they have to take blame for the bad times. The Bush administration and its supporters were more than willing to claim the credit – remember how much good the Bush tax cuts did the economy?

  23. DickF

    This is very poor analysis. First and foremost congress controls the purse strings of the US so any success for failure must fall at their feet. At most a president can propose.
    That said Kennedy led the Democrat congress into one of the most effective supply side economic policies in history. LBJ jumped on that band wagon and by instituting the Kennedy tax cuts reaped the benefit.
    Reagan’s election and subsequent turning of elections to where the Republicans ran one branch of the legislature and his policies were greatly accepted by the Democrats. That set the pace, but in his second term the Democrats did all they could to reverse the economic successes. George HW Bush was a disaster as he did not understand Reagan’s success so he attempted to duplicate it in a Keynesian framework. The result was a reversal of Reagan tax policies and much of the Reagan revolution. Clinton took office with a Democrat congress and the economy began to tank. The country profoundly passed judgement on his policies and elected a Republican house and senate. Clinton was faced with either moderating his economics toward pro-growth policies or being a total failure. He chose the prudent path and it was to the benefit of the American economy as we saw welfare reform, significant reductions in the growth of government spending, and capital gains tax reductions.
    But then we come to GB. The Republicans lost all perspective of what made Kennedy and Reagan successful and spent like drunken sailors. They did their best to act like Democrats buying votes with bad policy and graft.
    So where are we today with the Obama administration? No one in government seems to have any idea what the Kennedy and Reagan supply side successes were all about. Both Democrats and Republicans are doing the best immitation that they can of Benito Mussolini to try to get the trains run on time. Free markets have no place in the modern Democrat or Republican parties. Central Planning is master of our fate and if other examples, think USSR, of that remain true it is not a pretty picture.

  24. RN

    Heterosexual said:
    “RN,
    er…you are ignorant. There was no Wi-Fi router on the market in Jaunary 2001. 802.11b products emerged in early 2002.”
    Lol – sure, that’s what I was ignorant of…
    You clearly have no idea why we’re all laughing at you, and that makes it even funnier. :)

  25. Heterosexual

    “You clearly have no idea why we’re all laughing at you, and that makes it even funnier. :)”
    Translation into leftardese : RN is totally stumped and is too much of a coward to answer simple questions, or to admit his lack of knowledge. He retreats by imagining that a crowd is backing him.
    You don’t know anything about 802.11, but that is the least of your problems.

  26. Heterosexual

    I repeat again :
    The suggestion from this article is that a) Presidents control the economy during the exact dates of their terms, and 2) Democrats are better than Republicans.
    OK. So that means in 8 years of Obama, we can expect nothing less than :
    1) 4% annual GDP growth
    2) 25 million total jobs
    3) 10% annual growth in the S&P500
    Now that this has been promised, it will have to be delivered.
    So why is no leftard willing to sign up?
    (watch the leftards hide in cowardice from manning up to this expectation).

  27. Ben

    Heterosexual-
    Things here on econbrowser are typically more civil than on other sites. When you get on here and start casting around names associating ideology with mental capability (“leftards”) you weaken your own arguments (not that I have seen much outside of insults from you). If you have an argument then state it without trying to insult and intimidate everyone.
    Now go ahead and say something about my masculinity, intelligence, grasp of the issues, or whatever else you think you can paint me with.

  28. Buzzcut

    Hey Menzie, did you see this?
    Insteresting commentary regarding China’s currency manipulation and how it fueled the bubble.
    I am of course a Bush supporter, always have been. Economically speaking, we had tax cuts, low interest rates (thanks, China!) and no inflation whatsoever. And STILL the numbers look like crap. There are larger issues here.
    There’s plenty of fodder for interesting discussion if we don’t get into the usual Menzie “Bush is bad” morass. Bush was different because the issues he was dealing with were different.

  29. Heterosexual

    “When you get on here and start casting around names associating ideology with mental capability ”
    I see that you give a free pass to those who did it earlier than me, simply because it was directed towards right-wing people.
    “If you have an argument then state it without trying to insult and intimidate everyone.”
    I have. Twice in fact. The recent one is right above your post.
    Buzzcut,
    Now how none of the Bush-haters are willing to step up to the logical progression of their argument – that Obama will deliver stunning economic numbers for 8 years.

  30. Ben

    Heterosexual: fair enough. I did not explicitly state that other posts (esp. the Jesus comment) were over the line. They are. Answering bombastic comments with bombastic comments of your own does not achieve anything but driving a wedge. It does not help the discussion. If you don’t like people doing it to you then don’t promote it. As for why I focused on you, take a look at the posts on this page. As of current you are running a little shy of 1/4 of the posts.

  31. Menzie Chinn

    Buzzcut: You’re citing a Sebastian Mallaby op-ed? He’s an intelligent person, but we’ve heard all these arguments before from others, and mere repetition doesn’t make it gospel…It is interesting that he takes Chinese behavior as exogenous, and attributes zero effect from massive tax cuts directed toward the rich.

  32. Bryce

    Menzie,
    Mallaby’s points have been made by several of us on your blog. I guess we are looking for the compelling reasons you apparently have for being unpersuaded.
    I think Mallaby/Wolf are wrong to regard the Chinese as exogenous. Our Fed’s loose money policy affected the Chinese (as well as other central banks with the same strategy), making their efforts to peg harder & requiring them to purchase larger quantities of US & European debt to accomplish it.

  33. Menzie Chinn

    Bryce: Exactly why were we buying all those Chinese goods, so that the Chinese were accumulating dollars? You say it’s Fed policy. I won’t rule that out, but I think at least a big chunk is profligate fiscal policy and regulatory disarmament and resulting “looting”.

    By the way, even before the oil price spike, MidEast plus Russia (read oil exporter) current account surpluses far exceeded that of China in 2004, even more in 2005…(see Figure 3 here.

  34. Bryce

    Menzie,
    We may not be so far apart. I’m only saying Fed’s loose monetary policy was an important contribution. Most of the emerging world’s central banks–including the petro states–were ‘printing’ their currencies to keep them from appreciating against the US$ (only some of which was sterilized). The Fed’s 1% funds rate made foreign central banks have to be looser as well to accomplish the pegs.
    At that time the Fed was sticking to its norm & targeting short-term rates. Yet via PBoC et al, who instead bought 10 yr Tres & Agencies, it contributed to lower long-term rates in the US.
    The upshot is that we had a global credit bubble, aka euphemistically ‘savings glut’, that is the sine qua non of our present crisis. I think the items you mention such as profligate fiscal policy & bad regulation are important but contributory rather than central.

  35. calmo

    Can’t believe the apologists for Bush Junior here…economic performance of a country so disconnected from the administration whose job is?…to get back to the ranch as often and as long as possible?…tough crowd indeed Patrick.

  36. Barry

    …2) Natural disasters….
    This is a tough room.
    Posted by: Patrick R. Sullivan
    Perhaps it was badly phrased, so that only a person who thought a bit would understand. Let me help:
    ‘Clearing f*cking Texas brush while New Orleans drowned, after appointing as FEMA head a guy who was fired from running horse shows’.
    Better?

  37. Buzzcut

    Menzie, why shouldn’t we take Chinese behavior as exogenous? If they’re running a mercantalist economic policy, that’s the behavior we would expect, is it not? Are they not mercantalists? Do they not peg their currency to the dollar? Is that peg artificially low?
    The arguments make a lot of sense.
    Regarding the tax cuts, to the extent that they produced the T-bills that the Chinese use to recylce their trade dollars, I’m with you. But I didn’t see our trade deficit with China decrease much in the few years that the supply of T-bills was decreasing, did you?

  38. Rory

    The handling of Katrina, while not ideal at the federal level, was utterly bumbled by Louisiana and New Orleans officials who’s feet were on the ground. GWB mobilized the national guard as soon as state officials asked for such assistance. FEMA’s reaction was with the initial logisitics was poor and Brown was a bad hire, but to blame Bush for the incompetence of the first responders in Louisiana is absurd and unfair. Warnings were issued to evacuate the area, and quite simply, the orders were ignored by Mayor Nagin and his cronies. Since the disaster, FEMA has been re-worked and is better because holes were exposed. Does Bush get the credit for that?

  39. Heterosexual

    I see that none of the Obama worshippers want to come out and say that Obama’s economy will be good.
    Why are these nuts on an economics blog, when they should be on DailyKos?

  40. NB

    “Arguing on the internet is like running in the special olympics, even if you win you’re still retarded.” Never a more appropriate time to quote that… seriously, just state your thoughts and discuss, I’ll never get back the time I’ve spent filtering through some of this crap.

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