The US Economy does better under Democratic administrations than under Republican administrations
This has been proved over and over - why don't people know this?
Time and time again, Democrats have had to restore a national economy that has been wrecked by Republicans. It's happening again, and the media aren't helping. All we hear is that surveys show the voters aren't happy with the economy and hardly anyone is telling the truth about the economy. Substack writer D. Earl Stephens has noticed and given us something to think about.
The United States economy is once again the envy of the entire free world, much of which is still gasping for air, struggling along in the turbulent wake of a once-in-a-century killer pandemic that the morbid, “pro-life” Republican Party would prefer we all just forgot about.
The U.S. dollar is strong, wages are up, inflation is down, and our jobless rate is historically low. Sure, we have a way to go to get back to the economy we enjoyed during Barack Obama’s Administration, before the ghastly Donald Trump became just the latest Republican to wreck it by handing over our hard-earned money to billionaires, and making it easier for them to line his slippery, 10-gallon pockets, while stepping on the necks of powerless consumers of all political stripes.
Stephens is right about this, and he goes on to describe the economies wrecked by previous Republican adminstrations. Qualitatively we can see his point. But the evidence is there quantitatively as well. Look at Josh Bivens’ in depth analysis, from just last month.
Since 1949, there has been a Democratic advantage in the average performance of key macroeconomic indicators measuring economic health, including: Gross Domestic Product (GDP) growth, Job growth, Unemployment rate, Growth in inflation-adjusted wages, Growth of market-based incomes per capita, Inflation, and Interest rates.
This Democratic advantage is across the board in all variables we measure but strongest in private-sector outcomes—notably, business investment, job growth, and the growth of market-based incomes.
Household income growth (adjusted for inflation) was faster on average and far more equal during Democratic administrations, and the Democratic advantage shows up for every group.
Don't take it from me. Take it from someone who has looked at the statistics, like Bivens. A study by Blinder and Watson in 2016 reached the same conclusion:
The US economy has performed better when the president of the United States is a Democrat rather than a Republican, almost regardless of how one measures performance…The superiority of economic performance under Democrats rather than Republicans is nearly ubiquitous: it holds almost regardless of how you define success. By many measures, the performance gap is startlingly large.
“But the inflation,” they say. “Horrors, the inflation!” Yes, inflation spiked after Covid when normal business was disrupted by shutdowns and other problems, causing the prices of goods and services to rise. Currently the long term average inflation rate is 3.28% and it has been declining. Over the long term (see Bivens) the management of inflation has been better under Democrats than Republicans since 1949, Truman's first term.
Food prices are of course close to home and are affected by inflation. But, Senator Elizabeth Warren has pointed out that because of hundreds of mergers over the last 50 years, just four grocery chains control ~72% of sales in U.S. cities & in grocery categories—like bread, pasta, beef, cereal—4 companies control more than 60% of the market. Does anyone think this might have something to do with the price of food? Can you spell competition and price gouging? Costs have come down as inflation has gradually slowed, but prices have not. Grocery giants Walmart, Kroger, and Albertsons are booking 20% gross profit margins. Food prices are very real for many people, but there is an element of partisan bullshit to it. Republicans cried bloody murder when egg prices were $4.82/dozen, but were silent when they went down to $2.14. Biden is not to blame for food prices. And inflation is actually lower under Biden than under Trump in healthcare, prescription drugs, and college tuition - huge portions of the economy.
Inflation is not the only or even the best indicator of a good economy. Again, from Bivens,
Real (inflation-adjusted) gross domestic product (annual % growth) is by far the most cited variable for assessing overall macroeconomic health. Gross domestic product (GDP) is the value of all final goods and services produced and sold in the United States—a measure of total economic activity and incomes. The Democratic advantage in this measure (1.2 percentage points) is very large. Given the $27.4 trillion GDP in the United States in 2023, just a single year of growing 1.2% faster would translate into an additional $330 billion in income that could accrue to U.S. families.
The United States has the highest GDP and the highest GDP per capita in the world, so on that indicator we are doing extremely well.
Since this is an election year, the big question is whether we are better off than we were 4 years ago. According to Forbes, the answer is yes. Unemployment has dropped sharply, and the labor market is generally much more stable than before the pandemic. As of February 2024, the unemployment rate had been below 4% for 25 consecutive months, the longest stretch like that in 50 years.
A larger share of workers received wage increases higher than inflation at the end of 2023 than at the end of 2019. Household wealth was higher at the end of 2023 than at the end of 2019. The home ownership rate has gone up, and the debt burden has gone down. Says Forbes:
The declines in debt also offset, to some degree, higher interest rate payments. The Federal Reserve reports that the debt service ratio — average debt payments to after-tax income — amounted to 9.8% at the end of 2023, slightly below the 10% at the end of 2019. Households have basically seen strong income gains amid a very quick economic recovery and a strong and stable labor market that have allowed them to reduce their debt burden over the past four years.
So, the answer is yes. By many measures, American families are better off now. Treasury Secretary Janet Yellen agrees. “The typical middle-class American household now has more wealth, higher earnings, and more purchasing power than before the pandemic.”
So why do so many Americans pine for the Trump economy? Up to 2020, people enjoyed the economy Trump inherited from Obama (better under Democratic presidents, remember?). People have forgotten the the badly mismanaged COVID epidemic, morgues set up outside of hospitals, a shuttered economy, and over a million deaths. We could also ask why so many Americans think an adjudicated, twice impeached rapist who had numerous bankruptcies, was convicted of defamation twice, had trouble making bail on a half billion dollar business fraud conviction, who is currently on trial for business and campaign fraud, and who is awaiting trial on dozens of other criminal indictments would somehow be a good businessman? He couldn't even get good economic advice - his former economic advisor, Peter Navarro, is currently in prison.
Americans are better off now than under Trump. The economy has done amazingly well since Covid and is continuing to improve. We need people to realize it.