Thursday, August 9, 2007

Fred Thompson, An Economist He Ain't

In an attempt to cozy up to the right by proclaiming victory for Bush's tax cuts, Fred Thompson laid out his argument that the economy under Bush has actually been better than it was under Clinton. Now given that the economy was receiving a lot of press during the Clinton years, were it the case that Bush's economy was doing better and not getting any press that would be a fairly great story that was never told. As Fred says

Since the spring of 2003, the economy has had average growth of over 3%, 8.2 million jobs have been created, and the inflation rate has stayed low. The current unemployment rate, 4.6%, is a full percentage point below what it averaged during the 1990s, and there have been 47 consecutive months (almost four years) of job growth. In the last three years, workers’ salaries have risen by $1.2 trillion, or $8,000 per worker, and consumer confidence recently reached its highest level in almost six years.

People have pointed out that journalists were trumpeting economic statistics during the Clinton administration that were not as good as those we have now, hence the “greatest story never told.”

Notice anything odd about the statistics he sights? What stuck out to me is that he keeps referring to 2003-2004 as the starting point of the good economy under Bush. But Bush didn't get inaugurated in 2003, that happened in 2001. Now, what would the best way to make your economy look better than the previous administrations while at the same time ignoring the first few years of horrible economic performance of your own? If you said act like it wasn't yours, you win a prize. If you compare Bush's whole term to Clinton's whole term, you see there isn't actually a comparison at all. Let's take it one falsity at a time.

1 - Jobs - Since I'm too lazy to look it up, I'll take Thompson's 8.2 million since 2003 number. Clinton created over 22 million jobs in his two terms. 22 is more than 8.2, also between when Bush took office and 2003, jobs weren't created, they were destroyed, negative job growth, less jobs. In January of 2001 there were 137,778,000 people employed, it took Bush until October of 2003 to surpass that number and remain above it. The low point in Bush employment slide was 135,701,000 which is a loss of over 2 million jobs, that's a lot of people out of work.

2 - The unemployment rate - When Clinton took office, the unemployment rate was around 7.3%, in December of 2000, it was 3.9%. That decrease included 40 consecutive months of sub 5.0% unemployment. Now Bush has brought unemployment back down to 4.6%, but that is after pushing it back up to as high as 6.3%. So on the unemployment front we have Clinton with a 3.4% decrease, and Bush with a 0.7% increase, which is actually a 1.7% decrease from his original 3.4% increase.

3 - Wage/consumer confidence - Again we're looking at comparisons of numbers from early Bush to late Bush. While income has risen during the Bush administration, it's growth rate has slowed from that of the Clinton administration. During the first 7 years of the Clinton administration, income increased by about 2,440 billion dollars. So far in the Bush administration, the total growth has only been 2,239 billion. A seemingly small difference, but still a larger growth during the Clinton years (and the Clinton administration saw an additional 690 billion in it's final year, will Bush be able to match?). With consumer confidence again we see the comparison made to 2001-2002 time frame, during Bush's time in office consumer confidence has yet to hit levels attained by the Clinton administration.

When we sit back and take the whole economy into account, we are better off than we were 5 years ago, but are we better off than we were 8 years ago? Thompson is trying to reach to the right for support by saying that he thinks the economy is doing fine under Bush (just as Giuliani said he'd raise money by cutting taxes in the debate on Sunday). Which implies that he won't shake things up, more tax cuts for businesses and the rich, more national debt, but the same economic policies that have yielded far less success than those of the Clinton administration. But perhaps they don't teach you things like this on the set of Law and Order.

P.S. Here, and here is some more information comparing the two administrations' economic results, as if this post wasn't long enough already.

[Update - months later - I realized I didn't link back to the original Thompson column, the link is there now]


  1. You said "When we sit back and take the whole economy into account, we are better off than we were 5 years ago, but are we better off than we were 8 years ago?"

    Do you know how ridiculous that statement makes your argument look?
    Talk about reaching for negatives. The last five years are not good enough for you. Hell lets go back to the civil war and rag Lincoln.

    Don Jones

  2. I think you completely missed the point Don Jones.

    What this post seems to be arguing is that Thompson is saying "elect me and I will do the same Bush has done" and that isn't such a good thing.

    And for the record, Lincoln did GOOD things for this nation. Bush is just plain dumb.

    The fact that we are better off than 5 years ago means nothing, when the only reason we things got worse than 8 years ago in the first place is because of this presidents foolish, out-moded, and lethargic economic "strategy" that clearly didn't (doesn't) work.

    So a vote for Thompson would be more of the same. As a REAL LIFE fiscally responsible conservative, I will not cast my vote as such.

    Golly, I wish people would actually read posts before they comment on them!