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Thursday, April 12, 2007
Alan Reynolds :: Townhall.com Columnist
Comparing Bush and Clinton Economies
by Alan Reynolds
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A recent Gallup poll found that only 41 percent of respondents approved of Bush's handling of the economy, compared to 55 percent who disapproved. Such a question would make sense, of course, only if the United States were a centrally planned dictatorship. In a free society, the less the president handles the economy the better off we are.

Because polls reflect perception rather than reality, the suspicion arises that many people wrongly believe the U.S. economy is in bad shape because that is what they keep hearing on TV or reading in the newspapers. And because there is a presidential election looming, partisans are sure to exaggerate the economic performance of the Clinton years in order to stir up discontent with the present.

Politics being what it is (a spectator sport), partisans can't resist attributing economic outcomes to the White House, rather than to the efforts of millions of business managers, workers and investors responding to incentives. In this spirit, Bill Sammon, a frequent guest on Fox News, set up a provocative duel at examiner.com between White House spokesman Tony Fratto and Gene Sperling, former economic adviser to President Bill Clinton and current adviser to Hillary Rodham Clinton. As might be expected, both contestants were not entirely candid.

Fratto plausibly complained that the mainstream media have displayed a "double standard" by ignoring or denying visible economic progress under Bush while puffing-up the economic conditions during Clinton's presidency. "If you go back to this point in the Clinton expansion," Fratto said, "they would have loved to have seen the numbers that we have right now. On the unemployment rate, we're a full percentage point below where they were at the same point in the expansion -- 60 or 61 months in."

"That's a rather absurd claim," replied Sperling. "In terms of job creation, in terms of wage growth, in terms of business investment, in terms of poverty, there's absolutely no comparison." There is a comparison, though he may not want it to be made.

The article listed "dueling data points" from the Bush Camp and Clinton Camp. The Bush Camp said: "Real wages rose 1.8 percent over the 12 months through February. This is substantially faster than the average rate of wage growth in the late 1990s." How does the past 12 months relate to some unspecified years during the late 1990s? Would it not be more honest to compare several years at a similar stage of the expansion?

What years should we compare? It would be dishonest to include the 2001 recession in this duel, because Clinton's first term began two years after a recession had ended. Yet the Clinton Camp does just that by boasting that "under Clinton, the economy created 3.5 times more jobs after 74 months than it did over the same period of time under Bush."

The umpire calls a foul. A recession that began in March 2001 had nothing to do with Bush taking office the previous month, but it had a lot to do with job growth in 2001 and 2002. President Clinton took office two years after the previous recession ended in February 1991. The economy grew 3.2 percent in 1992.

The Bush Camp boasts that "since the first quarter of 2001, productivity growth has averaged 2.8 percent." Starting with early 2001 is still unfair, regardless of which camp does it. Cyclical weakness in employment growth from 2001 through mid-2003 resulted in more output relative to the few hours worked, otherwise known as increased productivity.

Were it not for the political spin, it would be more reasonable to compare the first year of recovery in 2002 with the first year of recovery in 1992. Fratto thus compared "this point in the Clinton expansion" to a period that began 60 months ago -- in early 2002. But such a comparable starting point in the Clinton expansion would actually have begun in late 1991, when Clinton was not in office.

In terms of equivalent starting points, it makes sense to compare 1993-1996 with 2003-2006 -- two cyclically similar periods of equal duration.

Growth of real gross domestic product (GDP) in those periods was identical, at 3.23 percent a year. That's a tie. Nearly all other measures favor the past four years over Clinton's first term. Unemployment was 5.3 percent from 2003 to 2006, but 6 percent from 1993 to 1996. Sperling mentioned business investment to avoid mentioning housing investment. Yet business fixed investment was 10.9 percent of GDP from 2003 to 2006, compared with 9.2 percent of GDP from 1993 to 1996.

When it comes to inflation, Bush faced a huge increase in worldwide oil prices, but Clinton did not. In the consumer price index that excludes energy prices, inflation averaged 2.1 percent in the past four years, down from 2.9 percent in 1993-96.

When calculating real incomes, however, nominal increases in wage and benefits are reduced by total inflation, including higher energy prices. This would seem to put the past four years at a big disadvantage, given the spike in energy prices. Yet it turns out that "wage growth" in the first Clinton term was nothing to brag about.

Even after including benefits, real compensation per hour fell by 0.5 percent in 1993, by 0.4 percent in 1994 and by another 0.3 percent in 1995. Real hourly wages and benefits increased by 1.2 percent a year from 2003 to 2006, but fell by 0.1 percent a year from 1993 to 1996.

The Clinton Camp should be as reluctant to mention poverty rates as it was foolish to mention wage growth. Yet its dueling data point dares to say, "During the Bush years, the number of Americans below the poverty line has increased by 5.37 million, while under Clinton the number fell by 7.68 million." That blames Bush for the 2001 recession, compares eight years with six and measures poverty in terms of change rather than levels. Despite such tricks, it still doesn't work.

The percentage of families below the poverty line was reduced from 12.3 percent in 1993 to 11 percent in 1996, which was progress of sorts. Yet fewer than 10 percent of families were poor from 2002 to 2005 (the latest available). Unless more poverty is better than less, this was another masochistic debating point.

The economy during the Clinton years became much stronger after 1997, when Al Gore or Netscape invented the Internet and the president signed a cut in the capital gains tax. Trying to use Clinton's first four years to denigrate the past four years is a foolhardy game. People who live in glass houses should be more careful when tossing around big, bad economics statistics.

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©Creators Syndicate
It's the War Dummy!
Think about where our economy would be without the hundreds of billions of dollars being spent in our economy for the equipment and weapons of War.

You're right, there is no comparison between the growth ALL Americans felt under Bill and the top 10% growth, specifically the top 1% who has seen their wealth explode, under W.

The GOP strategy of growing the economies of China, India and Pakistan at the expense of non service related jobs in America combined with the War "machine" ensure W's economics look positive...

Economic Disaster Looms


I am conservative and at the end of the day the out of control spending from President Bush and congress will head us toward an “economic disaster.

GAO Chief David Walker: Economic Disaster Looms

NM-AUSTIN, Texas – David M. Walker sure talks like he’s running for office. “This is about the future of our country, our kids and grandkids,” the comptroller general of the United States warns a packed hall at Austin’s historic Driskill Hotel. “We the people have to rise up to make sure things get changed.”

But Walker doesn’t want, or need, your vote this November. He already has a job as head of the Government Accountability Office, an investigative arm of Congress that audits and evaluates the performance of the federal government.

Basically, that makes Walker the nation’s accountant-in-chief. And the accountant-in-chief’s professional opinion is that the American public needs to tell Washington it’s time to steer the nation off the path to financial ruin.

READ MORE http://www.controlcongress.com


Red, Fletch
The war is not the sole reason for a booming economy. When will you people get a clue, for God's sake? I just can't take it anymore- all of you need a new class on economics. My frustration is over the top with you people thinking "the Rich" are getting over. "The Rich" pay all the taxes, then they reinvest the money to create more jobs...but have done nothing of course, to make their money. Get off your sorry A**ses and work to meet your personal potential. That is how you get rich,after all. BY HAVING A WORK ETHIC THAT EXCEEDS THOSE WHO SIT HOME AND SPONGE!

Fletch and boy are we gonna pay since they don't like to work.

It's not the press, stupid
"Because polls reflect perception rather than reality, the suspicion arises that many people wrongly believe the U.S. economy is in bad shape because that is what they keep hearing on TV or reading in the newspapers." -- People don't get their view of the economy from newspapers. In the past six years (with the exception of the past month, maybe), the majority of families have lost ground. The median income has declined relative to inflation.

Liberal Economics
I find discussing economics with a liberal the same as discussing of sex with a 7 yr. old - Long on fantasy and short on fact!

What would you expect from a group that thinks the way to prosperity is to tax successful people.

DEBT OUT OF CONTROL

Fletch

As a banker you should understand that if the debt is growing as a % faster than growth of revenue you will have a problem in the long term. Also you should understand the difference between current debt and long term liabilities.

At the end of the day President Bush and Congress are not reporting the real long term liability of their bills NO CHILD LEFT BEHIND, THE DRUG BILL….. on top of the Social Security and Medicaid issue!

You claim to be a CFO yet a low level accountant would know that President Bush and company are not telling the American people the real future liabilities.

Do you understand the growth is being financed with liabilities growing faster than revenue? Do you understand anything about credit risk?

That is the point of our CHIEF ACCOUNTING OFFICIER DAVID WALKER!

http://www.controlcongress.com

Clinton vs.Bush
I remember those years well.I was close to retiring in the mid ninties when the Clinton economy was supposed to be so good.As a union worker working out of the hall it was tough to get a job.Clintons economy was built on the over inflated dot. com busineses which were going under rapidly during the late 1990's.The Clinton adminisration spending was kept under control by a repub congress.The same group that overspent in the Bush years.It was Clinton that got NAFTA started.The said it would stop the influx of mexicans.Sure worked didn't it.

Union Dude
I do not disagree that there is plenty of blame to go around! At the end of the day people like FLETCH are only fooling themselves if they think you can run up future liabilities faster than tax revenue!


Konop
Konop, you love being led around by the bullshite people feed you. Facts don't matter to you, do they? You just love to harass the sense that Fletch has and ignore what is lost to you in world of economics. Go crawl back under your fantasy rock. Maybe I could knock you with it and get you some sense?

.COM
During the mid-90s you had people getting rich off paper companies producing nothing but greed.
Yes, the wages of these people where inflated. They are the same ones saying "I'm not makeing as much".. Get a clue, you aren't worth that kind of money.

Libs.
Elder's column, care to comment??????

Nee vs. GAO Chief David Walker
NEE

What do you and Fletch know that makes what the GAO Chief David Walker statement wrong that we are running up future liabilities faster than tax revenue?

Why would this not cause an Economic Disaster?

Please try to use facts not what you FEEL.

FLETCH FAILS AS BANKER


You demonstrate you do not understand the concept of future liabilities. I will try to help you understand the issue. The problem with your numbers is it does not factor future liabilities. BTW that is why in the business world you would have to disclose this issue. This is fairly common principle especially in the financial service industry which you say you are in.

An example would be the DRUG BILL. As more people are eligible you need more money. In the real world you would have to reserve for that. And if we did that it would be clear that are debt is running out of control. And this is just one area.

READ THIS FROM THE DAVID WALKER ARTICLE THIS MIGHT HELP YOU!

To show that the looming fiscal crisis is not a partisan issue, he brings along economists and budget analysts from across the political spectrum. In Austin, he's accompanied by Diane Lim Rogers, a liberal economist from the Brookings Institution, and Alison Acosta Fraser, director of the Roe Institute for Economic Policy Studies at the Heritage Foundation, a conservative think tank.

"We all agree on what the choices are and what the numbers are," Fraser says.
Their basic message is this: If the United States government conducts business as usual over the next few decades, a national debt that is already $8.5 trillion could reach $46 trillion or more, adjusted for inflation. That's almost as much as the total net worth of every person in America - Bill Gates, Warren Buffett and those Google guys included.

A hole that big could paralyze the U.S. economy; according to some projections, just the interest payments on a debt that big would be as much as all the taxes the government collects today.
And every year that nothing is done about it, Walker says, the problem grows by $2 trillion to $3 trillion.

READ MORE http://www.controlcongress.com

Bob Novak and Clinton Economy
The first order of business for anyone examining the Clinton economy should be to read the August 8, 2002 column in the Chicago Sun-Times by Robert Novak. It will open liberal eyes.

Fletch is Confused

What do you think would happen to our economy if we stop paying out all the entitlements?

BTW could not pay for the entitlements if we were reserving the proper amount for the future,
Now how are we getting away with this?

We are bowering money and passing the debt onto our kids.

Fletch if you understood anything about banking you would no this is not sustainable. And that is what DAVID WALKER IS SAYING!

How can you say the economy is health when it is based on enron type accounting?

In fact the government would not pass any legal accounting standards!



Yes, people think the economy
is in bad shape because the press keeps telling them it is in bad shape. As I recall, the press did the same thing during the Clinton years. They never had anything good to say about the economy until the 2000 election. Then the Clinton economy was great.

Clinton gets all of the credit for the economy when in fact he had nothing to do with it at all. The good economy and reduction in deficits had more to do with the Republican congress who cut the rate of spending than it had to do with Clinton.

At least with Bush you had a tax cut that he pushed that resulted in the economic turnaround.

The deficit spending that is going on now will inevitably result in inflation as it always has in the past.

Fletch
What is it with this guy Konop? I think he is confused. Fact or fear? He chooses to sniff the fear rather than use the facts. You're spot on.

Liberal Spending Fletch
You avoid the real question. How can the economy be healthy if they government was reserving correctly against future entitlements we could not make the payments nor finance it?

And as you know the economic engine would get killed the moment the checks stop going out for entitlements?

A logical well trained banker would say that we are fueling the economy with no way to pay back the debt! And you think this is a “HEALTHY” formula for the economy!

IT IS REPUBLICANS LIKE YOU AND NEE THAT ARE KILLING THE PARTY!

On Bush Approval Polls
If George Bush were to dispense a pill to all of us that guaranteed everlasting life, he'd be accused of torture and his approval ratings would decline even more.


Union Dude
Thanks for echoing my thoughts. My husband was "downsized" twice during the clinton good time years. We lost a bundle in the late 90's. Thanks to those great years and having to start over twice while being in our late 50's (at that time) we were not able to retire when we had hoped. So, I can't wait to see and feel the huge tax increase the dems are dumping on us. Why no coverage in the msm??

Fletch
I see you've dragged your John doll over here, too. Whatever you're paying him to make you look good, it's working.
Having him post as a "conservative" is especially creative.

Redhead
One more Republican who is killing the Party!

Do you and Fletch CHANT OUT OF CONTROL DEBT IS GOOD?



During Clinton Years
Many forget that the NY Times, Wash Post and other news outlets wrote articles of how an internet or high tech business good be successful without ever earning a net profit. More folks got rich on IPs from selling paper wealth that was soon worthless than any rich person has increased their income during the 2000s.

Many forget that ENRON and the like did most of their "business" during the 1990s under the Clinton-Reno watch. They didn't suddenly get crooked in January, 2001.

The Clinton economic years were and are a liberal fantasy. If the economy did well it was in spite of the Clinton Administration. It is sort of like the halcyon days of peace, flowers, sex and drug 1960s. The only wonder is how baby boomers survived.

John
You are pretty "thick". If I understand the crux of your argument, it's that the current economy can not be good because we have a looming crisis 10-20 years down the road if congressional spending continues at current levels. I'm trying not to laugh here, but is that your argument?

Fletch and Nee
You can't win against Konop. He's like the child that sticks his fingers in his ears and screams so he can't hear you. A better argument with him is to ask him what exactly he would have the government do. What is his plan for the economy in 10-20 years? We all agree that government spending is way too high but that doesn't mean that the economy is going to collapse tomorrow. Tweaks on spending and balancing the budget can be achieved without running around like some lunatic.

John Konop
Here is the even funnier part of your arguments:"A logical well trained banker would say that we are fueling the economy with no way to pay back the debt!" You think that the entire economy is dependent on the government? What a hoot. Sure there are policies that help steer it, but entreprenural activity and market forces are more a factor on government policy than vice versa.

SELLING OUT THE FUTURE
apoplectic

The argument by people who understand how accounting works is that if we put aside proper reserves for the future debt for entitlement we would not have the money or the ability to get the debt.

In fact this is the concept that put JIMMY HOFFA in jail. He was not putting away money for the PENTION FUND in the future. In the real world you would go to jail for how the government accounts for our debt.

The reason FLETCH will not answer my question is because he knows this is not a “healthy” economy! He also knows that we are living off debt and if we wait much longer our options will be to cut off entitlements and or raise taxes substantially. This would hurt the economy!

I realize you are part of the ME generation who thinks for now and not his children’s future. But let us get to the bottom line you are selling out your kids for short term gain.

BTW this is what the GAO CHIEF DAVID WALKER IS SAYING!

Tell me how David Walker is wrong?

John
What Fletch has been trying to explain to you is that commitments for future entitlements can not and will not be met. This fact has no bearing on the current state of the economy. For example at some point congress will raise the retirement age. This will not cause an economic collapse, it just means we'll be working longer. Other "entitlements" will similarly at some point be changed. Non of this has anything to do with the state of the current economy. As Fletch has tried to point out to you, the only measure of "runaway debt" is as a percentage of the GDP. It is no different than your own debt to income ratio.

When are people going to realize
that you do not run a govt like a business? Govt-Business comparisons ALWAYS scream out for the ignorance of the person making the comparison. I could write for hours on the subject but hell, the most glaring example of the fact that govt is not a business is that a business cannot compel the source of its revenue to cough up more revenue. Besides, people get WAY too caught up in "spending". I hate the overspending too but for an entirely different reason. Govt spending with rare exception is directly related to govt control/power. I want a govt that speaks to very few and limited issues and gives me the LIBERTY to live my life......smartly or stupidly. Getting into the weeds of non-sensical govt-business comparisons COMPLETELY misses the point.

For example, the reason to fix SS has NOTHING, repeat NOTHING to do with the economic effects and has EVERYTHING to do with the fact that it is an AMAZINGLY bad deal for the citizens of the U.S. and takes away OUR freedom to do MUCH better with that money.(or screw it up....whatever the case may be)It treats us as wards of the state and consolidates power at the fed level. When I list the reasons in my head to fix SS, the economic effects don't even make the top 10 list.

But hell, I will point out one OBVIOUS thing to the govt-business comparisons. VERY few people in D.C. seem to have noticed that they are ALMOST NEVER right when they predict future revenues or economic growth. If the economy grows at just a fraction of a percentage faster than is predicted, it swallows debt at an amazing rate. On the other hand, if it grows slower, it can accumulate it at just as amazing a rate. The GAO has so consistently underestimated economic growth and tax revenues that they are almost completely non-credible........regardless of who the president is.

Exactly
"the only measure of "runaway debt" is as a percentage of the GDP. It is no different than your own debt to income ratio."

I often note that the economically ignorant routinely confuse when to use raw numbers or percentages. IE, if I get a $100 a month raise today, you cannot say it is similar to the $100 a month raise my father got in 1980.

Similarly, the economically ignorant often don't realize when they do not have enough info to form an opinion. For example: if I told you that I had 50K in debt and my neighbor said he has 10K in debt, there are many who would immediately say that I had a debt problem larger than my neighbor's. Many wouldn't even ask how much my neighbor and I actually made........a REQUIREMENT to know a thing about the issue. I mean hell, if my neighbor makes 20K a year and I make 600K a year, I'm thinkin HE is the one with the problem!!!

THE ENRON CREW!
Fletch,Mrrob,apopletic with guys like you no wonder we had the ENRON mess!!!!!



GOD HELP US!!!

Market Economy
What ever happened to capitalism in this country. I do believe we all know if the government keeps its fingers out of the market place, we all would be better off.

ECONOMICS 101
RetMSgt

LET ME MAKE IT REAL SIMPLE FOR YOU!

Close to 70% of the economy is based on spending!

IF THE ENTITLEMENT CHECKS DO NOT GO OUT SPENDING WOULD DRY UP!


COMPANIES NEED PEOPLE WITH MONEY TO BUY PRODUCTS!

WE HAVE BEEN KEEPING THE GAME GOING BY BORROWING MONEY ON A YEAR TO DATE BASIS.

IF WE HAD TO PUT ASIDE MONEY FOR THE FUTURE REQUIREMENTS OF SOCIAL SECURITY, NO CHILD LEFT BEHIND, DRUG BILL……WHICH IS REQUIRED BY LAW IN THE REAL WORLD THE GOVERNMENT COULD NOT DO IT!

IN THE BANKING WORLD WE CALL THIS A HOUSE OF CARDS!

YOU GUYS CALL IT A “HEALTHY” ECONOMY!




John Konop is about as much a Banker
as I am a center for the Chicago Bulls. Well, that or if he IS a banker then he's about as good at it as the Bulls would be if I actually were their center!!! In any case, apparently he has concluded if he uses all caps it solidifies his arguments.

WHY THE GOP IS FALLING DOWN
Read your comments and you will see why fiscal conservatives like me have given up on you guys.

YOU GUYS HAVE KILLED THE CONSERVATIVE MOVEMENT!

Konop
It is clear to me that you have a very bad understanding of economics. Fiscal conservative my @ss.


DEBT DEBT DEBT DEBT
c5c5

You NECON-MEN think driving up out of control debt and selling off our Country brick by brick is conservative?
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