My Response To Froma Harrop's Claim That "Democrats have better economic record"

Click here to read her article. Here is my response

Froma Harrop wonders why "Democrats don't trumpet their economic triumphs" in reference to stronger growth under their presidents ("Who has better economic record?"  Jan. 2).

Princeton economics professor Alan Blinder tried to answer this question in a recent paper called "Presidents and the Economy: A Forensic Investigation."

Blinder has long had ties to the Democratic party. He was an economics adviser to President Clinton. He also advised the campaigns of Al Gore and John Kerry.

Yet his exhaustive analysis led him to conclude that the better economic performance under Democratic presidents is largely due to luck. One big factor seems to be lower oil prices under Democrats.

Lower oil and energy prices are important because they allow businesses to produce more, so they hire more workers who then spend more. A virtuous cycle is created.

Blinder went as far to say that "Democrats would no doubt like to attribute the large D-R growth gap to better macroeconomic policies, but the data do not support such a claim."

So maybe Democratic leaders wisely recognize the complex relationship between policies and their effects, which may last or not come in until there is a new president. Also, Congress helps make policy. Presidents don't act alone.

Harrop says the economy has done well under President Obama. But the news is not all good. According to the Census Bureau from 2009-12, male median income is down 2.08%.  Females are down 5.13%.

Peter Ferrara of Forbes pointed out "Twenty quarters, or 5 years, after the recession started, the economy (real GDP) had grown just 3.2% above where it was when the recession started. By sharp contrast, at that point in Reagan’s recovery from the 1981-1982 recession, the economy had boomed by 18.6%, almost one fifth."

This may have affected employment. According to the Bureau of Labor Statistics, in 2009, Obama's first year in office and the year the recession ended, 59.3% of the adult population had a job. Now it is about 58.6%.

Harrop also mentions that under Obama the deficit as a percentage of GDP has come down. This is good news.

But, according to the Economic Report of The President, the national debt rose from 85.1% of GDP in 2009 to 107.7% in 2013. It only rose 6.8 percentage points in the first four years of George W. Bush's administration.

She mentions how the gap between the top 1% and everyone else grows more under Republicans than Democrats. But even under Clinton, whom Harrop says did well economically, inequality rose as measured by the rising Gini coefficient.

It went from .454 in 1993 to .466 in 2001. Under GW Bush it finished at .468 in 2009. Now it is .477 (from the Census Bureau). So lately it is rising more under Democrats.

She is right that we had budget surpluses the last four years under Clinton. But for most of his presidency, Congress was controlled by Republicans. Economist Alan Reynolds has said, “The unexpected revenue windfalls in President Bill Clinton's second term were largely a consequence of lower tax rates on capital gains.”

Then Harrop touts the rising stock market under Obama. But it seems like Democrats usually say that the rich gain the most from this.

Let's remember how complex cause and effect are here. Kennedy cut taxes. Maybe that helped in the 1960s. Maybe Reagan's tax cuts of the 80s helped Clinton. Or maybe it was deregulation (much of which was started by Jimmy Carter).

We should not rush in and proclaim one party better than the other. We should instead try to find the best policies.