Every once in a while during the campaign, its nice to look at the facts.
Arguments and speeches can be debated, but the facts remain.
Take a moment to consider the facts about economic performance under Republican and Democratic regimes.
McCain/Palin are the Republican "change" candidates. With respect to the economy, the "change" they promote is a continuation of George Bush’s tax breaks for the highest of income brackets. This is the basic Republican theory of "trickle down" economics, where more money is given to the wealthiest, who might then hire additional chauffeurs or invest in overseas hedge funds. The belief is that eventually the money will "trickle down" to the lower classes, and the economy will grow. This is in stark contrast to an Obama "bubble up" plan where middle class families get a tax break, perhaps spend the money on consumer goods, and cause the economy to grow and more jobs to be created. The Obama plan has a progressive tax rate system similar to the one in effect during the Clinton years.
In this debate, McCain and the Republicans never seem to be called upon to offer any evidence to support their arrogant assertion that continuing the Bush tax cuts will save the economy, or that the Democratic plan would be harmful.
The time has come when the Republicans must explain recent history. Why "stay the course" on Bush tax cuts for the wealthiest Americans in light of the performance of the economy under Bush? If you are promoting a plan that seems to have failed, you have to explain recent history.
So let’s look at just a few measures of economic performance under Bush, and compare them to the prior eight years of a Democratic presidency. If the key to proper management of the US economy is a system of tax breaks for the highest income bracket, how are these facts explained?
Dow Jones Industrial Average
This is one of the great indicators of the performance of the largest US companies (particularly as measured by wealthy Republicans who invest and set the stock prices).
On January 20, 1993, the date of Clinton’s inauguration, did you know that the Dow stood at 3,241.95?
On Clinton’s last full day in office, January 19, 2001, the Dow closed at 10,587.59.
That represents a gain of 226% in eight years.
After Bush’s first full business day in office, January 22, 2001, the Dow closed at 10,578.24. And on August 13, 2008, the Dow closed at 10,917.51. That is a gain of a little more than 3% over 7 ½ years. Even if the Dow returns to levels of 11,500 by election day, that would still represent only slightly over a 1% annual return. Not as good as a savings account (in a bank that didn’t fail), and terrible in comparison to most major foreign markets, foreign currencies, oil, gas, copper, gold, platinum and other commodities.
The numbers on the Dow can be verified at:
Dow Price History
The Dow doesn’t tell the whole story, but I ask the Republicans to explain their "stay the course" strategy in light of these facts.
Unemployment Rate
Another excellent measure of the performance of the economy, in the eyes of the average American worker, is the unemployment rate. How did the "trickle down" theory perform for the working man? Here are the facts as published by the Bureau of Labor Statistics
BLS unemployment statistics
In 1992, the Democrats inherited a 7.5% unemployment rate.
By year end 2000, the unemployment rate was reduced to 4.0%.
The Republicans got their man, and their tax plan. And by August 2008, the unemployment rate grew to 6.1% August 2008 unemployment.
In other words, under the Democratic tax structure, unemployment was cut 47%. The Republicans came in and saved the country from the Democratic tax structure, and the "trickle down" plan resulted in a 52% increase in unemployment.
The unemployment rate isn’t the whole story, but I ask the Republicans to explain their "stay the course" strategy in light of these facts.
Federal Budget Deficit or Surplus
The main article of faith amount the "trickle down" crowd is that tax cuts make the economy grow, bring in more tax revenue and therefore reduce the federal budget deficit. So how did this one work out?
Let’s look at the facts, as reported by the Bush White House in the 2009 Budget:
Budget Surplus or Deficit
In 1992, Clinton inherited a $290.3 billion dollar budget deficit.
The deficits were turned to a surplus, and a Republican President and Republican Congress were bequeathed a $236.2 billion dollar budget surplus, with forecasts for further surpluses.
After eight years of Republican Presidency, six of them with a Republican Congress, and the tax cuts for the wealthiest, it is now estimated that the 2008 budget deficit will be $410 billion.
The budget surplus or deficit is not the whole story, and maybe there is some wonderful and complex reason why these magical tax cuts didn’t help on employment, the deficit, or the Dow, but I ask the Republicans to explain their "stay the course" strategy in light of these facts.
US Dollar
What happened to the value of the US Dollar under the Democratic and Republican regimes? The incontrovertible facts are that the dollar became stronger under the Democrats and weaker under the Republicans.
Foreign exchange rate history
1/20/93 .64750 British Pounds, 125 Japanese Yen
1/20/01 .6837 British Pounds, 117.24 Japanese Yen, 1.0703
8/13/08 .5252 British Pounds, 110 Japanese Yen, .6712 Euros
Number of Families Below the Poverty Level and Poverty Rate
There are many who believe that a society can be judged by looking at how the least privileged are treated. How did the poorest of families fare under the Democratic and Republican taxation and economic regimes?
Census Bureau on Families Below Poverty Level
Year number of poor families Poverty Rate
1992 8144000 11.9
2000 6400000 8.7
2006 7668000 9.8
(No more recent figures than 2006)
Under the Democrats, the poverty rate was reduced by more than 25%, but the Republicans the poverty rate increased by 11% by 2006. By the time statistics for 2008 are available, the number will be substantially higher.
Gasoline Prices
We are all aware of the painful increase, but what are the facts for the Clinton and Bush years?
According to government statistics, here are the national average prices for regular gas during the Clinton and Bush terms:
Clinton
$1.16 January 18, 1993
$1.45 January 15, 2001
Increase over eight years: 25%
Bush
$1.45 January 22, 2001
$3.76 August 11, 2008
Increase over 7 ½ years: 159% (or, as George Bush might say, "Mission Accomplished").
Gas price history can be verified at:
Gasoline Price History
These are not the only measures of economic performance, and I invite you to add your own.
I only wish there would be a little time during the campaign where the press would report the facts, and then ask one simple question:
Why?
I would love to listen to McCain’s explanation. I would give him no time limit. He can spend the next 50 days fine tuning his explanation.
I believe it was Henry Ford who once said, "Its time to elect a Democrat so we can start living like Republicans again."