Wednesday, August 25, 2010
GOP vs. Dems: Who's Best For the Economy?
GOP vs. Dems: Who's Best For the Economy?
The choice for voters in this year's fierce fight for congressional control will come down to a single question: Which political party -- Democrats or Republicans -- will do a better job coping with crippling unemployment and a devastating deficit?
To Democrats, the answer is obvious. Just look at the recent record. Bill Clinton took the White House at a time of financial turmoil and during the course of his eight years in office steered the nation to sharply lower unemployment while turning deep deficits into budget surpluses.
Liberals believe the good times ended abruptly with George W. Bush, who turned the nation from the grandeur of its Clintonian golden age to the fiscal wreckage that characterized his two terms of conservative misrule.
As President Barack Obama plaintively inquires on the campaign trail, "Why would anyone want to go back to the economic policies that got us into this mess in the first place?"
Though endlessly regurgitated by mass media, this melodramatic (and highly partisan) storyline amounts to a misleading simplification of the historical record.
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.
All this highlights the huge stakes in the upcoming congressional elections.
A change of power on Capitol Hill can influence the economic direction of the nation at least as decisively as a shift of control in the White House. After all, it's the Congress, not the president, that makes final decisions on spending and taxes.
In terms of current partisan battles, neither side counts as blameless or masterful. Within 10 years of winning congressional majorities, the Republicans eventually lost sight of the party's traditional values of fiscal responsibility and spending restraint, contributing to their electoral fiasco in 2006. But the resurgent Democrats quickly outdid their GOP predecessors in terms of reckless expenditures while watching unemployment shoot up dramatically.
In other words, those who insist that continued Democratic congressional control will improve prospects for job creation and deficit reduction cling to a naive misinterpretation of the past. They ought to examine the actual record of the past two decades and begin to reconsider their assumptions.
To read another article by Michael Medved, click here.
Posted by Brett at 11:19 AM