Since the economy is the most important issue to voters by runaway margins, the 2010 midterms will turn on the voters’ understanding of economic theory.
The fundamental divide between Republicans and Democrats on economic theory is between John Maynard Keynes and Friedrich Hayek. You don’t have to know any thing about economic theory to know that Keynes believed that the government is a fundamental intractable partner in the nation’s economic well being and Hayek believed that it isn’t. Upon that slender thread of voter understanding, the nation’s electoral vote will hang on November 2nd.
Is there some objective method to measure the validity of the two theories? Why, yes, yes there is. The real life measure of the nation’s economic well being for the average American is whether he has a job he can keep, and whether he can get one if he doesn’t.
Statistics on the number of full-time workers in the nation’s workforce and the number of fulltime workers added each year are available from 1945 to the present. Since Democratic Presidents generally employed Keynesian economic policies during that period, and Republican Presidents generally employed Hayek policies, we are able to compare how the nation’s workforce, and its economic well being , fared under each economic theory.
We first assign a Job Growth Rating to each President. The Job Growth Rating is the average annual percentage growth in the number of jobs during each president’s tenure. The rating is a number calculated by dividing the number of jobs added to the economy during a president’s term in office by the number of jobs in the workforce at the beginning of a Presidents term. The resulting quotient is then divided by the number of years the president held office.
The Job Growth Rating, then, is a career number. The higher a President’s Rating, the more jobs his economic policies produced. It directly reflects, therefore, the impact the President’s economic policies had on the average American.
So many variables impact job growth and decline, job numbers for a single month or even for a year prevent a fair analysis of the effect of government’s economic policies on those numbers. This necessitates a longer view, and so we look at the 63 years between the end of World War II, and the beginning of the Obama administration.
During that time, we have had 11 presidents, 6 of whom were Republicans and 5 were Democrats. As noted, the Democratic Presidents were Keynesian and the Republicans followed some variation, consciously or not, of Hayek principles.
Over this length of time the variables of job growth tend to even out. (We cannot yet assign a Job Growth Rating to Obama’s economic policies because he has been in office only 21 months, during which it is impossible to even calculate an annual average job growth. Like a baseball player considered for the Hall of Fame, a career batting average is what determines admission rather than one or two good or bad years).
So, under which presidents did the economy fare best based on job growth? Well, take this quiz first, because it requires fact, not opinion, for the correct answer. (All questions refer to the 11 presidents who served between 1945 and 2008. Remember, the higher the Job Growth Rating, the more jobs were created.)
Q. Lyndon Johnson’s War on Poverty was widely considered a failure. How many of the 10 other presidents had a higher Job Growth Rating than Johnson?
A. None of them
Q. Harry Truman lost the 1946 midterms to Republicans who attacked him as weak, incompetent and dangerous. How many of the 6 Republican Presidents who followed him had a higher Job Growth Rating?
A. None of them
Q. Richard Nixon once famously said "We are all Keynesians now", and he employed limited Keynesian theories to his economic polices. His statement would be vilified by Republicans today and he would probably be thrown out of the party. How many of the other 5 Republican Presidents had a higher Job Growth Rating than Nixon?
A. None of them
Q. Ronald Reagan’s economic policies are considered the gold standard by present day Republicans. How many of the 5 Democratic presidents hold a higher Job Growth Rating than Reagan?
A. All of them
Q. Jimmy Carter’s presidency is widely considered a failure. How many of the 6 Republican Presidents have a higher Job Growth Rating?
A. None of them
Q. Bill Clinton signed a tax bill in his first year of office that raised taxes primarily on the highest income Americans, which Republican claimed would destroy jobs and bankrupt America. How many Republican Presidents had a higher Job Growth Rating than Clinton?
A. None of them
Q. George W. Bush believed that high income taxpayers would create jobs if given lower taxes and less government regulation. Bush gave them both. How many of the other 10 presidents have a higher job growth rating than Bush?
A. All of them
Q.. Under two American Presidents, the economy produced more than 10 new jobs for every 10-person increase in the nation’s population. How many were Republican?
A. None of them
Q. Under four American Presidents, the economy produced fewer than 4 new jobs for every 10-person increase in the nation’s population. How many were Republicans?
A. All of them
Q. Under 3 presidents the economy produced more than 2.1 million jobs per year in office? How many were Republican?
A. None of them
Q. Under 4 American Presidents the economy produced fewer than 750,000 jobs per year. How many were Republicans?
A. All of them
Q. Under which two presidents did the economy produce fewer than 2 jobs for every 10- person increase in the population?
A. The two Bushes
Q. Besides George Bush who holds the lowest Job Growth Rating among the other 10 presidents?
A. The other Bush
Q. The 1950s are often looked at with nostalgia. Only two presidents had a lower Job Growth Rating than Dwight Eisenhower. Who were they?
A. The two Bushes
Lest you think these facts have a liberal bias, they are taken from statistics compiled by Rupert Murdoch’s Wall Street Journal:
Name of President
Line 1-Jobs created
Line 2-Jobs at end of term
Line 3-Jobs at start of term
Line 4-Payroll expansion
Line 1 a- Job Growth Rating
Line 2 a- Jobs created per year in office
Population growth
Line 1 Line 2 Line 3 Line 4
Lyndon Johnson 11.9 million 69.2 million 57.3 million 20.80%
Line 1a Line 2a
4.026 2,300,000 11.3 million
Jimmy Carter 10.5 million 90.9 million 80.4 million 13.10% 3.275 2,600,000 9.8 million
Bill Clinton 23.1 million 132.5 million 109.4 million 21.10% 2.638 2,900,000 25.2 million
Harry Truman 8.4 million 50.2 million 41.8 million 20.10% 2.594 1,100,000 N/A
Richard Nixon 9.4 million 78.6 million 69.2 million 13.60% 2.365 1,700,000 12.3 million
John F. Kennedy 3.6 million 57.3 million 53.7 million 6.70% 2.436 1,200,000 8.2 million
Ronald Reagan 16.0 million 106.9 million 90.9 million 17.60% 2.200 2,000,000 17.3 million
Gerald Ford 1.8 million 80.4 million 78.6 million 2.30% 0.952 745,000 5.1 million
Dwight Eisenhower 3.5 million 53.7 million 50.2 million 7% 0.875 438,000 23.3 million
George H.W. Bush 2.5 million 109.4 million 106.9 million 2.30% 0.575 625,000 12.5 million
George W. Bush 3.0 million 135.5 million 132.5 million 2.30% 0.288 375,000 22.0 million
Separate logic from emotion; separate fact from opinion. Tune out the horse-race pundits, the haywire politicians, and assorted talk show blowhards . Think for yourself. Draw conclusions. Vote. Please.