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Republican Economic Policies Don’t Add Up

Posted on Oct 6, 2008

By Arthur Blaustein

Most Americans have one eye on the nation’s financial crises and the other on the presidential election. And they are asking themselves, “Is McCain or Obama, the Democrats or the Republicans, better for the economic health of the country, as well as for my own financial well-being?” That is the defining question of this election.

A businessman who voted for Bush twice and Clinton in 1996, told me, “Barack Obama sounds really impressive and I have to admit that the goals of his social programs—particularly health care, education and the environment—seem good. But I’m worried the Democrats can’t manage the economy as well and they’ll get into my wallet.”

Many voters agree, and a recent poll shows that an overwhelming majority cites the economy as their top concern. For years the pollsters have found that most voters believe the Republicans do better with the economy. I’ve heard the businessman’s basic point—that the Democrats have better social policies but the Republicans are better managers of the economy—more often than I’ve heard Judy Garland sing “Over the Rainbow.” But is it true? Don’t count on this question being examined and answered in a full, open and honest debate.

Twenty-eight years ago—with the election of Ronald Reagan—we entered an entirely new phase of presidential politics. The focus since then has been on who can raise the most money and package the best media image, rather than who demonstrates the most competence and capacity to govern. Our country’s political, economic and social life has been reduced to a battle of 15-second sound bites and 30-second commercials, with results reported like a football score. TV news has turned democracy into “duhmocracy.”

Fortunately, we don’t have to depend on campaign slogans or advertising bucks to frame the debate. We can look to the record. Here’s the Economic Sweepstakes Quiz. The rules are simple. Guess which president since World War II did best on these eight most generally accepted measures of good management of the nation’s economy. You can choose among six Republicans: Eisenhower, Nixon, Ford, Reagan, Bushes I and II; and five Democrats: Truman, Kennedy, Johnson, Carter and Clinton. (No peeking.)

Which president produced:

1. The highest growth in the gross domestic product?
2. The highest growth in jobs?
3. The biggest increase in personal disposable income after taxes?
4. The highest growth in industrial production?
5. The highest growth in hourly wages?
6. The lowest Misery Index (inflation plus unemployment)?
7. The lowest inflation?
8. The largest reduction in the deficit?

The answers: 1. Harry Truman, 2. Bill Clinton, 3. Lyndon Johnson, 4. John F. Kennedy, 5. Johnson, 6. Truman, 7. Truman, 8. Clinton. In the Economic Sweepstakes, Democratic presidents trounce Republicans eight times out of eight!

If this isn’t enough to destroy the myth that the economy has performed better under Republicans, the stock market has also done better under the Democrats. The Dow Jones Industrial Average during the 20th century has risen 7.3 percent on average per year under Republican presidents. Under Democrats, it rose 10.3 percent – which means investors gained a whopping 41 percent more. And the stock market declined further during George W’s two terms. Moreover, since World War II, Democratic presidents have increased the national debt by an average of 3.7 percent per year and Republican presidents have increased it an average of 10.1 percent. During the same time period, Democratic presidents produced, on average, an unemployment rate of 4.8 percent; Republicans, 6.3 percent. That’s the historical record.

What about economic policies over the past 15 years? The Clinton-Gore administration presided over the longest peacetime economic expansion in our history. The national debt was reduced dramatically, the industrial sector boomed, wages grew and more Americans found jobs.

How has the Bush-Cheney team fared? In the past seven years, we have experienced the weakest post-recession job creation cycle since the Great Depression, record deficits, record household debt, a record bankruptcy rate and a substantial increase in poverty. We have gone from being the nation with the biggest budget surplus in history to becoming the nation with the largest deficit in history.

What is downright frightening is that Bush and John McCain seem to still believe an unregulated free market will solve America’s economic problems. Barack Obama, on the other hand, maintains that government has the responsibility to keep our economy on the right track. Obama says he will work toward reducing the debt and deficit. He pledges to help the middle class and the working poor by maintaining benefit levels and eligibility for the Earned Income Tax Credit. He will hold the line on our tax progressivity and fairness by rolling back the Bush tax giveaways to taxpayers earning over $250,000 annually. And Obama wants to target health care, education, affordable housing, alternative energy and the environment with critical investments.

McCain wants to privatize Social Security and probably Medicare, although he gets dangerously vague about this at election time. To finance government spending in the wake of his tax cuts for the wealthy, Bush has borrowed heavily from the Social Security Trust Fund. At the same time, the United States owes huge amounts to foreign investors. McCain and George W. are mired in the failed economic policies of Republican predecessors. In 1980, Bush I called supply-side policies “voodoo economics.” But he embraced these “trickle-down” policies in order to become vice president and then president. Reagan and both Bushes’ royalist economic policies of the 1980s and the past seven years were failures—a fool’s paradise built on the sands of borrowed time and borrowed money. The consequences were staggering debt, industrial decline, shrinking wages, four painful recessions, increased poverty and structural unemployment. The reckless Reagan-Bush-Bush spending and borrowing has brought us to the brink of social catastrophe and economic depression.


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By JHS, October 24, 2008 at 6:59 pm Link to this comment
(Unregistered commenter)

Not since the mid-70s is the American public willing to listen to any economic deviation from the Friedman/Reagan supply side gospel.
In my lifetime I have felt like a outsider in my own country. Called a Socialist by friends and family members and worse by Republicans.

I feel a 800 pound gorilla being lifted off my chest as the supply-siders are forced to admit that their economic theory is very flawed.
More importantly a large part of the middle class of the country is listening and appear to be receptive to responsible and well targeted Keynsian measures to put money into the hands of “consumers” the people who actually drive a 21st Century economy not based on Elites, Robber Barons and money changers. The only way that “consumers” and labor has a say in the economy is to “Redistribute” some of the fruits of the economy to the consumers and workers.

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By Tony Ciallella, October 10, 2008 at 3:45 am Link to this comment
(Unregistered commenter)

When will humanity the USA the Western developed world really awake?

In 2008 and after 2000 years of so called human evolution and learning, when will human beings understand that we are privileged to have been given life?.

We continue to amass knowledge and yet we deny understanding.

We know so much yet we understand so little!

Its not about money and wealth stupid!!

We are here for each other, not to just accumulate and amass money and wealth we are here to support and help each other to evolve and enjoy life together and not at the expense of one another.

As humans (and mother earth plunges) inexorably into the abyss of more stupidity and ignorance we are destroying mother earth with just too much excess consumption far more than we individually need and certainly cannot take with us!.

It’s not about just the USA ..its about wake up world, because each and ALL our time and our lives are limited and finite!! 

What a sad legacy we are leaving for our children and grand children and the humans of the future. 

Perhaps what we all need to wake up to ourselves is this!!

a damned good economic DEPRESSION to level the playing field of life and get us all back to our senses. I hate to think that history will repeat itself again and we now start to create greater conflict and greater wars to solve this crisis.

The greater power of spirit and life is at work, as these so called powerful wealthy and powerful, money ladened humans cannot be entrusted with this irresponsibility any more.

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By felicity, October 8, 2008 at 10:51 am Link to this comment

I’m still looking at the vast Pacific ocean out my living room window in hopes of seeing all those sunken ships rise to the surface at the next high tide. 

Didn’t the sainted Reagan promise that a high tide raises all boats?  Didn’t he promise that when the rich get richer everybody benefits?  Obviously the man had never seen a ship fathoms deep, broken up and mired in mud. Rising tides only raise ships that are afloat.

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By samosamo, October 8, 2008 at 6:34 am Link to this comment

Authur Blaustein,

Why don’t you just called a spade a spade? And in this case call a republican a crook or a thief or a terrorist.
I mean, with the money flow going out of the taxpayers pockets and into the CONSERVATIVE’s pockets via the military, homeland security, corporate give aways, what the hell else can it be called? Anything else than GRAND LARCENY is sanitized doublespeak that the neocons have adapted so well from George Orwell’s ‘1984’. For them money means power and by George Orwell, they are gonna take it.
And after listening to Bitch Pelosi’s speech on the vote down of the first bailout attempt and the hypocracy and lies in that little doublespeak talk where the taxpayer would NOT be picking up the tab, wll just add her name to the BLUE DOG list, again.
There are a very few democrats and republicans that should remain in congress but the vast majority should be ousted ASAP. But the american public has been dumbed down so efficiently that the chances of that happening is very slim.

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By lichen, October 7, 2008 at 10:21 pm Link to this comment

As Naomi Klien’s recent speech on Democracy Now! has shown, the rapid followers of Milton Freidman’s “free market” methodology have brought poverty, human rights violations, and misery wherever they went, whether democrats or republicans.

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By markCapitola, October 7, 2008 at 9:30 pm Link to this comment

Blaustein notes in a well-written article, key point:

  | But he [Bush 42] embraced these “trickle-down” policies in order
  | to become vice president and then president. Reagan and both Bushes’
  | royalist economic policies of the 1980s and the past seven years were
  | failures—a fool’s paradise built on the sands of borrowed time and
  | borrowed money.

Probably correct.  Why? :-

1> Borrowed money, specifically excessive leverage, is the root cause
  of the problems we are seeing. 

  The US gov’t, by borrowing more is not the solution.  Practically,
  more debt most likely, longer term, is going to crater the dollar
  further, increase deficits (both internal and external) and increase
  inflation. Somewhat obvious, really, based upon a large, growing
  body of historical evidence.

2> “trickle-down” economics, best case, by definition, you end up
  with a trickle. QED a failed policy, even when the policy
  supposedly works, at its very best.



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By John F. Butterfield, October 7, 2008 at 2:41 pm Link to this comment

Reagan lied. The economy died.

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By floydw, October 7, 2008 at 1:41 pm Link to this comment

Crisis is composed of both danger and opportunity. The danger at present is that we will continue in our attachment to anachronistic narratives and unproductive abstractions. Such narratives and abstraction are an essential part of the discourse responsible for current circumstances.

A radical transformation of narratives and the ideas providing their currency is essential to transcending the vicious cycles and decay that is rapidly deposing our socio-economic system.

In light of this reality, I recommend Charles Eisenstein’s essay Money and the Crisis of Civilization for your consideration. Ideas with real currency! As Milton Friedman observed, ideas have consequences, and when crisis hits, we are dependent on the ideas we have “lying around.”

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By yellowbird2525, October 7, 2008 at 11:06 am Link to this comment

as for the democrats: Clinton went & bribed the heads of Mexico & Canada to get Nafta thru & NAU which Bush Sr could NOT do; BOTH parties WORK for the CORP GREED, and FAIL TO EVER ADDRESS SOCIAL NEED. Henceforth, we have civil war in Mexico; cuz they went down to take over the land & water rights there. HELLO! and what of Iraq? SAME there; SAME enforced SlAVERY to the Corps which goes on in the USA; SAME in Austrailia, & France, & Italy; oh, INDIA has civil unrest because THEY did not “bow” to the LUST OF GREED of the Corps of the USA. What do you THINK is going on in Colombia? people SHOT & MURDERED who tried to work on SOCIAL NEED instead of CORP greed; Clinton brought back $800,000 for Hillary’s campaign who was “against” it supposedly. Now they are trying to claim the TRADE AGREEMENT there was signed by Congress in 2006. Betcha it is the SAME Corp GREED from USA using military there under “heading” of WAR on DRUGS: but ‘don’t let the people know that they went there POISONING the trees, land, water; killing millions to obtain for THEIR greed land & water rights. Let them THINK that it was “for a good cause” ending POVERTY like the LIE that was given by the 2 USA ambassadors plotting overthrow of Govs in S America who didn’t take BRIBES from the USA. We the people are “presented” it is for “the greater good”::::::::::: of THEIR pocketbooks only. CERTAINLY NOT for the people THERE or HERE. You have proved you utter & sheer incompetency to GOVERN or RULE anyone anywhere anytime in any way shape or form.

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By yellowbird2525, October 7, 2008 at 10:58 am Link to this comment

gerald d: and THIS is exactly why our politicians are bribing the heads of other countries to “do it their way” cuz hey hey hey NONE of them have EVER had to pay for their deeds; and the stupid people of this country cannot even SEE the graft & corruption & “nothing gets done” for the PEOPLE or the PLANET, and they are busy shouting rah rah rah lets FORCE this MONSROSITY they call “democracy” onto EVERYONE while the people & planet suffer. *****hello does anyone have an iq on the PLUS side in the USA? IF these stupid prostitutes who ONLY move or do anything if they are PAID: WHY do we want ANY OTHER COUNTRY & PEOPLE to SUFFER? and millions are DEAD in nations all over this WORLD you are not even TOLD of half of what is done by GREED followed up by the mighty army of the DECEIVED! WHAT do you THINK is freedom? My neighbor’s idea is that she is FREE to go to a store. Holy mackinoly folks! do you THINK they cannot do this in CHINA?

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By Larry Linn, October 7, 2008 at 10:57 am Link to this comment
(Unregistered commenter)

So McBush takes credit for warning about Freddie and Fannie, to close the door after the horses have left the barn. Where were President Chaney and Vice-President Bush? They said that the economy was “sound”. Sounds like B.S. How many Freddie and Fannie lobbyists are on the McBush Election Committee? I guess that when you own more houses than you can count, you do not understand or worry about the Residential Mortgage industry!

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By felicity, October 7, 2008 at 10:26 am Link to this comment

I’ll take the word of my 98-year-old mother who called me last night screaming, “Goddamn those Republicans, they’re at it again!”

There is something to be said about experiencing events first-hand - especially 98 years of experiencing them.

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By purplewolf, October 7, 2008 at 9:21 am Link to this comment

A lie repeated over and over again, a favorite Republican tactic, becomes reality to those of weak minds and little interest in self preservation. They want every move they make to be dictated to them as to what to do, what to believe in and never think for themselves or question authority. That is the only way they feel safe. And what threatens this safety? The falsehood of the idea Democrats will raise your taxes.

If these sheeple would open their eyes and wake up and really take a good look around for themselves, maybe then they would actually realize that the Republicans are the ones who have wrecked the economy with their reckless handling in running the country. You cannot keep cutting the taxes for the rich, allowing over 2/3 of the big corporations to pay NO taxes and spend like money is going out of style and the Republicans, but mainly as this current administration has done and not rack up some major debts similar to former Rep. Presidents like Ronald Reagan and Bush I, but far exceeding the debt limit that Reagan had.

McCains latest pile of tripe, heard last night on the news was that this entire Wall Street collapse is due to the Democratics being in rule of the last two years. Funny, but there were signs of this well before 2 years ago. It is always easier to point the finger at others for the mess one creates, this draws attention off of them and onto others. A very old practice of the guilty.

If by another fluke, AKA as cheating, McCains party does manage to steal a third election in a row, he will continue the tax cuts for the super rich and spend more and expand on the war front. He has already told the public countless times he knows nothing about economics. Do we really need another incompetent person leading America into the last throes of its existence?

Ask yourself: Are you better off today than you were 4 years ago? How about 8 years ago? If you can honestly say you are better off, then go ahead and vote Republican,and if they do cheat their way into the White House again, when the rest of America goes under, you can only blame yourselves, as you have allowed this to continue.

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By Optisizer, October 7, 2008 at 9:05 am Link to this comment
(Unregistered commenter)

I wouldn’t mind see the top three presidents for all those categories. Bet ya the dems still would be crushing the repubs…

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By Tubalcain, October 7, 2008 at 8:33 am Link to this comment
(Unregistered commenter)


This is what irks me is that they don’t push it forcefully & continually. It kinda of makes me think that they are in some kind of collusion together.Democrats should be ashamed.

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By tomack, October 7, 2008 at 8:24 am Link to this comment

This SHOULD be a large part of tonight’s script. Forcefully and continually presented.

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By Tubalcain, October 7, 2008 at 6:50 am Link to this comment
(Unregistered commenter)

Democrats have failed to drive the message that it was Republicans who caused most of this mess so the stigma of Democrats being bad economy managers resonates in the minds of many Americans. Why aren’t the facts that Mr. Blaustein points out all over the evening and 24 hour news shows? If Obama wins he will inherit a bad economy from Bush Jr.Admin, Republicans will then blame Obama the Black Liberal Democrat for everything that has happened. Democrats will sit there like lame ducks and not fight back because they believe they are better than that. The sad fact is that Americans are not the most informed so they believe whatever the MSM tells them be it a 24 hour “news show”, news papers,etc. Again, the message is that Democrats are tax and spend. So unless the Democrats work hard to reverse that stigma, it will always stay.

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By Big B, October 7, 2008 at 6:05 am Link to this comment

None of the presidents, from Truman until now, have had to face what the next president will have to deal with. Jimmy Carter had it bad, but it will seem like a walk in the park compared to the next four years.
The next president will have an economy in major decline, out of control spending, foreign wars, domestic crisis in healthcare and housing, an energy shortage, overpopulation, inflation, and an america divided along socioeconomic and religeous lines.
If it can fixed, it will take extraordinary government leadership and sacrifice by all citizens.
Do you think we have it in us?

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By GeraldD, October 7, 2008 at 12:33 am Link to this comment
(Unregistered commenter)



One Of The Crooks Will Probably Be The Next Attorney General Under Obama.  If That Happens, NONE of them will ever be brought to justice.

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