Sluggish recovery, don't pin it on President Bush: Charts can tell the real story

As this off-year election ends and the Big Race begins, one area where the Dems should not get away with pillorying President Bush is the economy, even if the latest good news on growth isn’t sustained. Economics is often hard to explain, however, and people will go with their gut more than the facts. But Ross Perot showed that charts can get a message across to the general public.

Meditating on this stock chart of the premier index of stocks, the Standard and Poor’s (S&P 500) shows that the general downturn in investment prices began and neared its recent bottom in the last year of Clinton’s administration and the very first quarter of the Bush II Administration — well before any Bush economic agenda would have hit. (More attuned persons will remember that the Nasdaq crash was in April 2000 before Bush was formally nominated to run.)

The downward journey was predicted by non-right wing economists like Robert Shiller. The "irrational exuberance" driven by Clinton's excess strong dollar policy, absence of oversight of margin rates, and numerous other factors like the Y2K hyperspending, was due for a fall. The chart shows the expected fallback starting to happen while Clinton was President and Bush was still fighting to be a nominee.

Further we find a soft landing coming in this year at least one of whose factors appears to be the Bush tax cut. A tax cut returns to the productive economy real wealth, rather than artifical government spending. Given the still very high values in the current equities market, a soft landing and bounce is a significant accomplishment. Of course, economics is driven by many factors, and one can worry about tax cuts in light of greater war, security, health care, and Social Security spending.

Still, the charts show it: the broad and tech-based economic downturn resulted from Clinton-era excesses; Bush merely inherited the downward direction and appears to have helped halt it. More needs to be made of this to counter demagoguing from the left, but whether the charts can be persuasive in the face of a wall of worry about recovery is another question. Either way, employment worries and business investment worries come from the hangover of a Democrat Administration.

Posted by at November 5, 2003 10:13 AM