With the recent passing of what would have been Ronald Reagan’s 100th birthday — and with President Obama having  invoked his name — we have been treated to a steady stream of articles about our 40th president, most of them remembering him in the most glowing terms, particularly as it relates to his economic record.  There’s this piece by Larry “King Dollar” Kudlow and this one by Arthur Laffer, among many others.  But there are a few, like this one by Mike Kimel, author of the wonderful book Presimetrics (which I’ve temporarily put down to slog through the FCIC report) that, in my opinion, take a more objective view.  In fact, it was Presimetrics that motivated me to take my own look at  some data.

Reagan’s supporters have always glossed over the inconvenient truths about his economic record, as the aforementioned Mike Kimel points out:

By the time he left office, the national debt, which had been “approaching $1 trillion” had more than doubled to $2.7 trillion, and the stack of thousand-dollar bills that had been 67 miles high was now 193 miles high and rising fast. Interest payments on the debt—“over $90 billion” in 1981—were just shy of $200 billion in Reagan’s last year in office.

Using more relevant measures, real debt per capita (in 2008 dollars) grew from about $10,620 in 1980 to $19,860 in 1988, and from 32 percent of GDP to 51 percent of GDP over the same period. However you slice it, Reagan’s profligacy bore no resemblance to his promises.

Purely as a matter of academic interest, I believe that among the tailwinds I believe Reagan had was the country’s demographics:  The Baby Boom generation — some 76 million strong — was hitting its stride as Reagan took office, the oldest being about 35 when he took office, the youngest about 17.  I’ve not seen any studies on how much of an economic impact this might have had, but I would speculate it was not negligible.  Here is a chart showing just how big that pig in the python was in sheer numbers:

As noted, we’ll never really be able to quantify the influence of the Boomer cohort on the economics of the era, but common sense would tell us it provided some measure of benefit.  If anyone’s aware of some peer-reviewed work out there on this subject, drop a link or reference in comments — I’m very interested.  It’s interesting that the overwhelming body of work seems to be on the impact of an aging (retiring) Boomer population; precious little seems to have been done on how that cohort influenced our economy prior to their retirement years.

What I think might be instructive is an indexed look at Reagan and his successors (George H.W. Bush, Bill Clinton, George W. Bush, Barack Obama) in which I’ll level the playing field by rebasing many items to 100 at the beginning of each president’s term.  (Plug for FRED — the ability to manipulate, transform, mix & match data (~25,000 data sets) with FRED is truly one of the wonders of the internet and by far one of its best uses.  I cannot say enough about the work those folks do, and to their responsiveness when I have a question or encounter a glitch or problem.)

First up — since “Capital Markets” is one of TBP’s primary focuses — let’s take a look at the S&P500 by presidency.  I’ve set the dates on this graph in each instance to just after election day, which is to say the day we knew who would be the CEO of U.S.A., Inc.  In the case of the 2000 elections, I used December 13, 2000, the day after we knew the Supreme Court’s decision in Bush v. Gore.

Since it goes without saying that inflation touches just about every aspect of our lives, a look at CPI over the past 30 years seems appropriate:

And, since we generally measure our returns (particularly in capital markets)  on inflation-adjusted terms, I’ve indexed both the S&P500 and CPI to 100 at the start of each of the past five presidencies (essentially a combination of the two charts above):

Of course no discussion of the economy is complete without a look at GDP, here’s how that shakes out over the past 30 years:

Within his first term, Reagan produced a deficit that was 6 percent of GDP.  It was the highest the country had seen since the end of WW II.  He got it down to 3.1 percent by his last year in office.  (Note:  There is no indexing in the chart below.)

Government spending.  Huge issue right now, right?  If nothing else, Reagan was certainly a small-government expense cutter.  Or was he?  Here’s a rebased chart of Federal Government Consumption Expenditures divided by GDP and indexed to 100 at the beginning of each president’s term.

Reagan’s expenditures as a percent of GDP were elevated for his entire presidency.  George H.W. Bush managed to cut back somewhat, but it certainly is interesting to see who the real cost-cutter was.

Not only did Clinton cut the Federal Government’s Consumption Expenditures, he actually reduced the size of the Federal Government’s payroll:

(Note:  This series is from BLS.gov; FRED does not capture it.)

(The decennial spikes are, obviously, related to the influx/outflow of census workers.)

While Clinton cut the number of Federal employees, the economy surged in terms of private payrolls:

Reagan did preside over a period of significant dollar strength:

So, there’s a quick look at the past five presidencies in terms of Private Payrolls, Federal Jobs, the dollar, GDP, Government Expenditures, Inflation, Surplus/Deficit, the stock market, and an open question about how the Baby Boom generation may have figured into it all.  Hope it’s been informative — I think it most definitely tells a story about economic stewardship.

When commenting, in addition to Barry’s standing caveat, please keep in mind these very sound pieces of advice and commentary from Mike Kimel’s Rules to Write By (one of which — #14 — addresses a gimmick that makes my blood boil):

14. No magic lags. Be consistent in your use of lags. If your analysis says that Reagan is responsible for growth during the Clinton administration, he better be responsible for growth during the Bush 1 administration too. And if Reagan is responsible for events that happened four to twelve years after he left office, explain why he isn’t responsible for events that happened 13 years after he left office. Also, explain why some predecessor of Reagan’s isn’t responsible for growth during Reagan’s administration.

19. Regardless of what you want to believe, real economic growth during the Reagan administration was slower than real growth during the FDR, JFK, LBJ and Clinton administrations. Two of these administrations raised marginal tax rates and one cut them. What these administrations had in common was a vision for expanding the role of government.

Category: Cycles, Data Analysis, Economy, Markets, Politics

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

64 Responses to “Presidential Chart Porn”

  1. Petey Wheatstraw says:

    How Roman of us. Reagan has been deified by the right wing. The religion created around him has little basis in fact. The deity bears little resemblance to the man. Were he alive today, he’d be a RINO.

  2. JimRino says:

    So, you’re saying Bill Clinton was our best President in this time range?
    He followed the real Republican philosophy, and grew the nation?

  3. JimRino says:

    I feel sorry for Obama, it’s clear his stats are being skewed by the worst President of all time.

  4. Invicky,

    like JimRino is asking, What is the Upshot?

  5. Moss says:

    What exactly is the ‘real’ Republican philosophy that Clinton followed?

  6. AHodge says:

    nice recalling of facts
    another good one is reagan the biggest postwar tax hiker
    the greenspan social security commission raised those taxes huge, i remember mine going up about fourfold.
    yeah i know “its separate” blah blah blah
    it aint separate

    the economy doesnt know its separate
    its used in deficit measurement
    a tax is a tax

  7. WhipTail says:

    Reagan worshippers long ago co-opted Clinton’s accomplishments by claiming he simply benefitted from the policies Reagan put in place. They also conveniently forget that Reagan accomplished nothing in terms of advancing their conservative social agenda. The upshot here is that Republicans of the charted periods (and I’m including the Republican Congresses) are style over substance.

  8. Moss,

    Good Q:

    “…a tax is a tax.” –AHodge

    “Another major reason why crime is increasing is that crime pays, and in our tax-ridden, regulation crushed economy, many people cannot economically survive through low-end jobs. … ‘The income that offenders can earn in the world of crime, as compared with the world of work, all too often makes crime appear to be the better choice.’ In Washington, D.C., it costs $7,000 in city fees to open a pushcart. In California, up to eighty federal and state licenses are required to open a small business. In New York, a medallion to operate a taxicab costs $150,000. More than 700 occupations in the United States require a government license. Throughout the country, church soup kitchens are being closed by departments of health. No wonder so many people turn to crime and violence to survive.”
    – Jacob G. Hornberger
    American author, journalist, politician, founder and president of the Future of Freedom Foundation
    Source: Will You be Safer if Guns are Banned?, The Tyranny of Gun Control, 9-10 (1997).
    http://quotes.liberty-tree.ca/quote_blog/Jacob.Hornberger.Quote.C0B0

    http://www.thepriceofliberty.org/08/02/11/fffoundation.htm

    http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus&v%3Aproject=clusty&query=Jacob+G.+Hornberger+Future+of+Freedom+Foundation

  9. Petey Wheatstraw says:

    JimRino and MEH:

    The charts speak for themselves. Argue with the data or methodology, if you want to, or find something that rebuts them, if that’s what y’all want to do, but Clinton clearly takes the kudos based on what’s presented.

    As for Clinton being a Republican, that’s a hoot! If someone does well, he’s a Republican, if he doesn’t, he’s not. Funny, I don’t remember him running on that ticket. Also, if he was a Republican, Monica Lewenski would have been a dude.

  10. Petey,

    along these lines ..

    “…Does anyone really believe John Kerry is genuine. Our last Democratic President was one of the best friends corporate America ever had. Nafta, MFN for China, mega-mergers and enormous fraud on Wall Street, all went on during Clintonwatch.
    Bush or Kerry sounds like a choice of poisons. I think I order a Nader instead.

    Posted by Lou Campagna on Apr 30, 2004 at 10:28 PM
    http://www.inthesetimes.com/article/nader_on_the_radar/

    http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus&v%3Aproject=clusty&query=Clinton+NAFTA+China+MFN

    http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus&v%3Aproject=clusty&query=Clinton+NAFTA+China+MFN+Trade+Deficits

    LSS: you only get one, if you’re lucky, ‘Manufacturing Sector’ to hollow-out..

  11. Petey Wheatstraw says:

    MEH:

    Not that Clinton wasn’t a corporatist, just arguing flavor.

  12. Invictus says:

    @Petey

    Also, if he was a Republican, Monica Lewenski would have been a dude.

    Awesome. Nothing more to add.

  13. darth beta says:

    Convince me the executive branch of government influences the economy more than legislative (wasteful pet projects, tariffs, trade)(yes, I know of the veto power), judicial (lawsuits and regulation), state governments (property taxes, education, public workers, ects), regulators and the Fed (monetary policy)?

    The problem is presidential worship…..

  14. jack says:

    very interesting. i would also be interested in any peer reviewed studies on the baby boomers. i have read a few books on the topic. most of them argued that the major economic impact would have been during the years when they started hitting their peak earning (tax revenue) and spending (GDP) periods, which is typically in their 50′s. They started turning 50 in the early 90′s. they clearly didn’t have the impact on the market that harry dent thought they would, but i would agree with you that the economic impact is not zero.

  15. Moss says:

    Reagan was a great personality, an actor by trade in fact. The Republican philosophy is predicated on acting, false pretense. They are masters at deception.

    So again I ask what exactly is a real Republican philosophy and who best exemplifies that. The sad true is that they are all RINO’s since the label of Republican is superficial. Now we have Conservatives, Tea Partyers, Liberationists etc.

  16. Greg0658 says:

    1st LOL @ Petey9:45
    2nd – nice charts Invictus – and Thanks – worth the cable bill today
    3rd – I could repost my words only view – won’t (except Clinton sold the factory)
    4th – we gotta get off the fluffypuffpuff economy here in the USA and make the real stuff again before its to late
    5th – thanks for the Census work – it was fun to be part of it (not well ya) – I’ve spent it – maybe a rebate is coming when I finish all the paperwork – I’ll spend it (if) right here (wait maybe Canada – tough – thats how it goes round)

  17. Irwin Fletcher says:

    Not an accurate method to judge presidents.
    Presidents inspire people ,communicate vision that affects things for years and years.
    Most of what they do has a future impact, not current.
    Reagan was president when I was in college and he literally inspired me to become an entrepreneur.
    I started my first company in 1990 (two years after he was out of office) but we didn’t have thousands of prospering employees until around 2002. So GWB would get the credit for that? But it had nothing to do with him, or his weak leadership. It was born from RR inspiration back in the 80′s in my college years (formidable ages) and wasn’t seen in fruit until 14 years after he was out of office.

  18. socaljoe says:

    Fiscal policy is more a function of congress than it is of the president. Either way, fiscal policy is very much a Keynesian response to the prevailing economic conditions, which themselves are a product of preceding policies. In the early 80′s, as today, the federal government resorted to deficit spending in response to prevailing recessionary conditions.

    In any case, we need to focus on the issues of today… not argue over which way to re-write history.

  19. Greg0658 says:

    6th – “also be interested in any peer reviewed studies on the baby boomers” .. ok that was missed – tell me tell me true … is it better for The Economy for me to reduce ALL my Stuff to base materials and recycle them into the recycleable garbage system OR sell them as 2ndHandTrinkets on the likes of CraigsList and Ebay?

  20. Matdaddy says:

    Very interesting Invictus. I started playing with the Baby Boomer cohort in my head–if by turning 65, the Baby Boomers will sink the US economy, then why didn’t they do more to expand the US economy by turning 35?

    Maybe Reagan’s “accomplishment” was not so much that he presided over a modest expansion, but that he turned a tsunami into a neap tide.

  21. Greg0658 says:

    Fletch please tell the nature of this business in general which grew employees 14 years after Reagan

  22. DeDude says:

    Great stuff I will bookmark this one. I love facts whether they support or challenge dogma. The spinsters will off course spin it to support their dogma but the facts will still just stand there and shake its head at them.

  23. dr.j says:

    These comments are simple minded.

    Perhaps all of you have forgotten, but any president works with the Congress. They preside, not rule. No president can take much credit for the economy. Why isn’t Tip O’Neil responsible for the results of the Reagan years and Gingrich responsible for the results of the Clinton years?

    You can’t blame Clinton for the bubble, the hiring boom it encouraged, the capital gains tax receipts that stemmed from it or the slow down that followed it.

    This blog has just become a site for political ranting. No chart “speaks for itself”, otherwise global warming could be blamed on the increase in Blogs, ownership of bull dogs or the increase in apple-tini consumption.

    Coincidentally, they have all gone up in the last 20 years. They are not related, though.

    But wiser people understand that charts and stats can sometimes be misleading.

  24. FrankInTheFalls says:

    Too many Republicans in the mix. Where is Jimmy?
    Why are we stopping with Reagan? Put Jimmy in there
    and see what it looks like for some balance.

  25. WFTA says:

    Vindication is at hand.

    Absolute proof that William Jefferson “Bill” Clinton was the United States’ greatest president. And he knew how to party! Sweeeeeeeeet!

  26. wunsacon says:

    >> among the tailwinds

    How about lowering interest rates down from 12%? Over just the 2000′s alone, we’ve seen what bubbles the Fed can engineer. So, I suspect this factor was as significant as him running bigger annual deficits.

    Reagan = Keynes^2

    Better to be lucky than smart.

  27. jaymaster says:

    This is complete chart porn masturbation. Looks good and feels good, but means nothing.

    Like social joe said above, Congress (and the House especially) controls the purse strings. All the president can do is beg, cajole, and plead, and ultimately veto (which none of them seem willing to do anymore).

  28. “This is complete chart porn masturbation. Looks good and feels good, but means nothing…”

    x2

  29. Petey Wheatstraw says:

    Reagan ushered in a new era. While he was President, I saw him give a speech at the National Association of Religious Broadcasters annual trade show (I was, freshly out of school, selling portable exhibit systems).

    You couldn’t cut the hypocrisy in that room with a knife — you’d need a chain saw.

    That’s how I remember him.

    As for legacies of individual Presidents, they are enduring. Much of what we’re going through now can be traced back to the Reagan revolution (although, as I said earlier, much of the current wingnuttery we’re experiencing is built on the highly romanticized, deified Gipper religious history — not what actually happened at the time).

  30. Lukey says:

    At first blush, I’d say the best economic performance (Clinton’s) apparently coincided with a reduction of government employment and spending (mostly from the peace dividend but also his welfare reform). One could probably make an argument that much of that resulted from the fall of the Soviet Union during the Reagan Administration and the attitudes he helped propagate regarding the negative aspects of the proliferating welfare state. I might further add that this makes it quite likely that the left leaning economists who now claim that we can’t dare cut the size and scope of government, lest the economy suffer from some bureaucrats losing their jobs or transfer payment recipients being cut off, might be barking up the wrong tree.

  31. Hugh says:

    I agree with wunsacon on this one.

    Reagan got rid of inflation. Or better, he didn’t stop Volcker from getting rid of inflation. There was a really tough recession followed by good growth.

    Clinton just had to keep the growth going – which he pretty much did. Unfortunately in the Slick’s last years we got the internet bubble – and things haven’t gone well since.

    As a Brit it’s amazing to see the importance you guys place on the President…. A more rational analysis would have taken into account such minor matters as tech advance and the Cold War. But apparently here the President counts for more than anything else.

  32. Petey Wheatstraw says:

    jaymaster Says:

    “. . . Congress (and the House especially) controls the purse strings. All the president can do is beg, cajole, and plead, and ultimately veto (which none of them seem willing to do anymore).”
    ____________

    Maybe Invictus can find charts of Congressional majorities to overlay onto these. Then maybe taxes vs. revenues vs. spending. That would be interesting.

    The President has the bully pulpit. The President sets policy. The President leads the nation. We have been led down a rat hole, and it started with Reagan.

  33. Petey Wheatstraw says:

    Hugh Says:

    “Reagan got rid of inflation. Or better, he didn’t stop Volcker from getting rid of inflation. There was a really tough recession followed by good growth.”

    Reagan borrowed growth from the future. His prosperity was financed with debt. That is his legacy.

  34. darth beta says:

    For some perspective- Federal expenditures est 2011 $3819b – State and Local expenditures est 2011 $3361b.

  35. CT Crew says:

    Chart porn – doesn’t address end of the cold war and the resulting peace dividend on Federal expenditures, should show the effect of Republican’s taking over Congress and Bill Clinton’s triangulation away from e.g. health care reform to irrelevancy after the Lewinsky scandal.

  36. Chad says:

    I don’t think Invictus is suggesting the President is the only economic factor (in fact he specifically suggests the population boom might be part of it). Of course, congress, tech advances, population explosions, etc. are factors, along with the President (and probably bigger than the President).

    This post is probably meant to target the idiot “believers” who put belief before facts. It is meant to challenge the excessive demi-god worship of Reagan, not prove that the only economic force that matters is the President. Relax people. Of course, Invictus knows congress has a hand in this.

    @ Petey

    “Also, if he was a Republican, Monica Lewenski would have been a dude.”

    Awesome.

  37. Presidents are given far more credit and blame for domestic economic performance than is deserved. Reagan wasn’t a great (or lousy, depending on your perspective) president because of the economy. He was a great president because of international relations, which is truly a president’s most important job. He engaged the fight for world hegemony with the Soviet Union and won.

    Roosevelt was similarly great for his leadership in World War Two. Very little of anything in the way of domestic economic initiatives Roosevelt championed did much to change the trajectory of the domestic economy. It took the massive stimulus of fighting a world war to finally energize the economy to grow past its previous highs. Economic growth in the decades immediately following the war could be directly attributed to Roosevelt’s leadership in winning it.

    The same could be said of economic growth in the decades following victory in the Cold War relative to Reagan.

    Bush I was a feckless president because all he understood about the presidency was being commander in chief. He got that the president’s most important job was international relations, but didn’t know how to purposefully manage without conjuring contrived foes to defeat (Noriega, Hussein). He suffered domestically because at the end of all wars, the Cold War being no exception, there is a structural decline in economic activity due to the reallocation of resources from military to civilian use.

    Clinton was a great president because he understood that America had no existential threats and thereby needed little in the way of force projection around the world. Sometimes the best leader is the one that knows when to do nothing. Clinton also understood (domestically) that stability in governance promoted economic growth perhaps more than anything. And you’ve got to love that he actually balanced the budget at a time of growth without war, wherein even Keynesians would agree that government should be running surpluses.

    Bush II was a feckless idiot with an Oedipal complex whose existential need for purpose resulted in disastrous military adventurism. He didn’t feel presidential except when commanding troops to kill and destroy on his behalf, and he needed to prove he was a bigger man than his daddy. Iraq killed two birds with one stone for him.

    It’s too early to make a call on Obama so far as international relations are concerned. Perhaps doing nothing, or just continuing what Bush started, is comfortable for him. But if the unrest in the Middle East flares too much higher, he may be forced to assume the role of commander in chief in order to save his domestic agenda. The American economy depends on the free flow of Middle Eastern oil. If supply is in danger of severe disruption, Obama may get the chance to prove his leadership chops in a real way.

  38. Invictus says:

    @No one in particular, just a general observation

    I notice that the generic response to challenges to Reagan’s economic supremacy usually revolves around the claim that it’s really congress, not the president, that should get the credit/blame. Except, of course, when it comes to Reagan’s economic supremacy, in which case he’s due all the credit. Funny how that works.

    @Irwin Fletcher @ 10:10

    Please refer to Kimel’s Rule #14, which I cited.

  39. CT Crew says:

    “Clinton was a great president because he understood that America had no existential threats and thereby needed little in the way of force projection around the world” so he kicked the Al Qaeda can down the road, Embassy bombings, 1st WTC, USS Cole etc??

  40. elmerfudd says:

    Has this site ever criticized a Democratic politician or policy?

    I think a large intellectual stumbling block for the simple masses and partisan bloggers is the one darth beta mentioned – ‘The problem is presidential worship…..’

    A couple notes about Clinton – his payroll reductions were almost entirely DoD personnel cuts, which began under Bush I (I was one of them) as the collapse of the Soviet Union let to a logical and needed reduction in force structure (for Reagan, the opposite occurred). This was, in essence, a historical gift. Many would argue that the higher growth rates during the Clinton years were another historical gift, as his presidency coincided with the IT revolution, which accelerated growth above the historical norm (and frankly, should have lowered bureaucratic staffing levels, all other things being held equal), as well as government tax receipts. Incredibly, a divided Congress was unable to spend the largesse in a timely fashion. That problem did not last very long.

    Or you can believe the wizard feeling your pain and getting bj’s behind the Oval Office desk was adroitly pulling the economic levers and driving the growth of 280,000,000 person economy.

  41. IS_LM says:

    Very little of anything in the way of domestic economic initiatives Roosevelt championed did much to change the trajectory of the domestic economy.

    This statement is completely wrong.

  42. VRWC says:

    Here is what liberals ignore about the Reagan era; Granted that he was primarily responsible for the defense buildup…. He made a passing attempt to hold the line on non defense spending but failed…. Apportion the blame for that between Reagan and the Democratic Congress as you will, but the spending rise that Reagan drove was in defense.

    The argument that gets ignored is that there was a defense buildup AND THEN a peace dividend that followed after the collapse of the Soviet Union.

    So take a look at defense spending over the entire period, the total numbers are quite remarkable;

    In 1980 we spent $303B on defense…. 81 thru 89…. $317B, $339B, $366B, $381B, $405B, $426B, $427B, $426B, $427B respectively….

    If you subtract $303B from each of those numbers, you get a rough approximization of Reagan’s defense buildup…. the total is $787 Billion.

    Now, using the 1989 level of $427B as the high mark…. subtract the lower defense spending totals for a rough estimate of the peace dividend as the Cold war ended… I use nine years so it is an even comparison….

    1990 thru 98…. $409B, $358B, $379B, $358B, $338B, $321B, $307B, $305B, $296B respectively…. subtract each of those from $427B and you get a total peace dividend of….

    $772 Billion.

    $772B divided by $787B = 98.094%….

    The peace dividend, which enabled Clinton and the Republican Congress to balance the budget was 98% of the build up.

    Yes, there are caveats…. Defense spending would have risen anyway without Reagan…. I haven’t factored in inflation…. and of course we can have a long and pointless argument about whether the Soviets would have fallen anyway, but I don’t think you can deny that at a minimum Reagan sped up the process.

    But nobody ever looks at the buildup and the reduction in total and the bottom line is that our most important enemy did vanish in the wake of the buildup, and so, in a rough way, the defense buildup paid for itself.

  43. darth beta says:

    The insidious problem is political parties……. They set an agenda to stay powerful and in control not to act in the interests of their communities.

    Explain to me why in the year 2011, with all our communication technology we as a nation can not vote on issues over the internet?

    Do we want tax cuts?- every body log on and vote…..Are we tired of dealing with the middle east, every one log on and vote. Do we want less government- more? Log on and vote….

    Arrogance is a weakness that plagues our leaders, that a selected few shall understand what is good for many. That those in power are smarter than those not.

    Government should implement the peoples wishes, not set the agenda.

  44. darth beta says:

    Lastly, can we get back to the finance- I need investment ideas, not redundant political chatter.

  45. VRWC says:

    You also ignore the fact that during the Clinton years, interest rates peaked on Election Day 1994 with the republican takeover, and something close to 95% of the stock market rise that occured during Clinton’s presidency occured after that same date.

    Not that I hold the republicans any more responsible than Clinton for either the tech boom that fueled GDP growth or the gusher of tax receipts that followed in its wake, thus enabling the balanced budget in the first place.

  46. JimRino says:

    Are these charts saying I can’t have a one dimensional view of the world? That I can’t ignore facts if they conflict with my bias?

    You’ve brought up:
    - Volker
    - Greenspan
    - Congress
    - Foreign Policy
    - Sex
    - Nafta
    - Reagan’s deficit spending.

    Now my head hurts.
    I need to go here for a minute:
    http://www.excedrin.com/index.shtml

  47. Brendan says:

    A couple of thoughts:

    1. I wonder how the privatization of government work affects the payroll numbers. Obviously there was quite a bit during Reagan since deficits went up while government workers stayed flat (and the well known expansion of the military industrial complex during his tenure). Federal workers shrunk under Clinton, but were most of those jobs simply transferred to private industry?

    2. The size of the boomer generation is only half of the story, the often ignored other half is the dramatic increase in two-worker households. Even though women (primarily) have been strongly increasing their presence in the workforce for 65 years now, it’s only been in the latter half that both parents of the “typical” middle-class nuclear family keep working after having kids – thus an explosion in daycare. Add to that, having kids later in life and the size of the boomer (and bounce) are clearly only a part of the story.

    3. @The Curmudgeon @ 11:02 – Clinton didn’t truly have “no existential threats,” at least not significantly less-so than the other presidents on the list. But win (Kosovo), lose (Blackhawk Down) or draw (targeted bombings of Iraqi missile systems instead of full fledged war), he just handled them better from a resource perspective than the other presidents on the list, IMHO. I think that may be what you were trying to say, but that’s the way I see it. BTW, I’m not in the Clinton fan-club, but this point is often missed and one I happen to agree with Clinton’s approach on.

  48. Brendan:

    “Existential threat” means threat to the continuation of our existence, such as only the Soviet Union presented, so everyone that has governed since about 1989 hasn’t faced one.

    But I think we agree–I believe Clinton did a fine job at projecting that amount of force necessary to protect our interests, and efficiently, and felt no need to prove his manhood by picking on some penny-ante dictator.

  49. beaufou says:

    Reagan and Clinton macroeconomic outcomes are similar.
    Lower taxes and a large budget deficit produced a growth rate of 3.4% under Reagan.
    Higher taxes and a budget surplus generated growth of 3.6% under Clinton.
    They share lower interest rates and roaring stock markets, we know who the winners ultimately are because the end result of the last 30 years looks like this:
    http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph

    So much for ideology and partisan politics.

  50. Brendan says:

    @The Curmudgeon:

    Ahh, you mean the old definition, not as it has been redefined to include every country that has a few terrorists running around (they could have a stockpile of dirty bombs after all) or made up WMDs. My mistake! I was assuming the current political definition.

  51. gd says:

    As usual, a lone voice in the wilderness has the explanation to it all:

    http://www.theonion.com/articles/embarrassed-republicans-admit-theyve-been-thinking,19248/

  52. econimonium says:

    @Petey: what? “Ushered in a new era”? Of what, lying? Of “voodoo economics”? Of being elected when you’re senile? I was a wide-eyed kid AT Regan’s second inaugural and it inspired me to think that the American electorate surely was the either the stupidest on the planet or the most ill-informed. It was clear to me at that tender young age that people were CLEARLY voting against their own best interests. The entire time was about all surface and no substance. THAT’S what Regan and his times were about.

    These data VERY clearly show the truth, like it or not. Frankly I’m with Barry when it comes to investing…my money and my personal political philosophy are almost never in line. But Regan’s time did inspire me too! I went on to business school and am now a C-level employee after the last 10 years on executive teams. And I remain as far away from what Regan espoused now as I saw clearly then. I believe I am a better human being for it. So in a way maybe you are right. Regan had a positive aspect. He was the reason that I first saw what Republicans were really about. And I’ve made a lot of money for myself and companies/investors by playing the game accordingly. No matter what my personal political philosophy.

  53. obsvr-1 says:

    @VRWC Says: … In 1980 we spent $303B on defense…. 81 thru 89…. $317B, $339B, $366B, $381B, $405B, $426B, $427B, $426B, $427B respectively….

    If you subtract $303B from each of those numbers, you get a rough approximization of Reagan’s defense buildup…. the total is $787 Billion….

    — Reply

    9 years of MIC buildup to take down the USSR super power — $787B

    1 year MIC budget to take out 300 cavemen with grenade launchers — $800B

    Seems the Pentagon and Wall Street are the big winners spanning all the presidents from Regan to Obama.

    ****

    Other points to remember — The information age really took off in 1982 with the introduction of the PC, this unleashed computing power to the individual and kicked off Silicon Valley and massive innovation.

    1995 – Internet transformed into the WWW with Mosaic, Netscape and the infamous Dec 7 release of the ‘free’ MS Explorer. This drove business transformation into cyberspace, explosive boom of web based innovation all culminating into the Busting of the Tech/Telecom bubble.

    This spans Regan, Bush 41 and Clinton eras.

    Bush 43 – 9/11 shocks country into a “Patriotic” push to expand the MIC to unprecedented levels. The “War on Terror” replaces the “Cold War”. Technology continues the promise of upward spiral in capability driving productivity. Wall Street under the cover of Anti-regulation, unwinding of glass-steagall, CFMA, Greenspan/Bernanke easy money unleashing the Financial WMD on America leaving in its wake the material for BR’s “Bailout America” and myriad other books on the 2008 – 20xx Financial Crisis.

    Obama – Extend and Pretend President, Leadership from the Lip adds amplifiers to the Regan/Bush/Clinton/Bush doctrines. Obama embodies the worse of all, flashing a smile, the cool and likable dude never leaving campaign mode.

  54. Soylent Green Is People says:

    Re-run the charts with Dem / Rep Congressional control, not President in power, then these charts will mean something.

    My .02c

  55. oracle3 says:

    Served on the SAG board when Ronnie was president of the union. My impression was that he was a New Deal guy who was totally committed to it. The perception of him as a conservative came only as a result of his anti-Communism and his stand against the Communist Party within the guild. Remember, Barry Goldwater thought he was a Communist and said s0 more than 0nce.

  56. L says:

    These sorts of things have always bugged me. This article implies that the president is virtually omnipotent and the entire US economy is due to him. How stupid! And usually it’s either a Republican or a Democrat putting these sorts of things together and I never trust them.

    So basically, the above correlations are meaningless without the bigger pictures going on at the time. I believe economic trends are way bigger and more powerful than any single person. Heck, they’re bigger than the president and congress combined, although I have to admit examining the interplay between the president and congress would have much more economic explanatory power than the simplistic “chart porn” Barry displays in this article. Correlation, most especially correlations in the margins, does not mean causation.

  57. obsvr-1 says:

    @myself

    … material for BR’s “Bailout America” and myriad other books on the 2008 – 20xx Financial Crisis….

    oops — Bailout Nation … sorry

  58. WoolyPasadena says:

    Nice graphs
    Americans are appallingly ignorant. Few realize how much wealth has been shifted up to the very rich in the last 30 years, see http://www.balloon-juice.com/2011/02/22/soak-the-super-rich/. To make matters worse, a February Kaiser Family Foundation poll showed that only 52% of those polled were confident that the 2009 Healthcare reform Act was still valid. Twenty two percent said that it had been repealed and 26% said that they didn’t know or refused to answer. Healthcare reform is important, whether we love it, hate it or want it improved as I do.

    Democracy can’t work in our fractured, simplistic and hateful political culture. Let me remind people that it w as the US who had money to loan to European allies after World War I. They had trouble repaying those loans and kept hoping that the US would forgive them. When the depression came in the 1930s, Finland was the only country that repaid the loans in full. After World War II, we had borrowed a lot of money but were clearly world economic hegemon. About 75% of all word economic activity took place in the US in the late 1940s. There is a nation with great financial reserves that loans to the US, Japan and the EU today. That nation is China.

    The process of borrowing and increasing the money supply was compounded by deregulation, enthusiastically espoused by Jimmy Carter and every President thereafter. Population growth surely played a role in the temporary boom. However the Greenspan put looks much different from a 2011 Asian perspective than it looked to the US Chamber of Commerce in 2005. From the long term perspective, the Clinton economic team (which still holds sway in the Obama era) has a mixed record. Rubin, Summers & Rivlin pushed for the elimination of Glass-Steagall, they enthusiastically supported NAFTA and other offshoring. Offshoring, like the Greenspan bubble, looked good in the first years. But the jobs available to Americans today are increasing low wage, low benefit jobs. Ironically, claims of excessive regulation may be justified for small businesses that can’t afford to lobby Congress. The monopolistic corporations evade regulation in multiple ways, usually with governmental knowledge.

    There is a world-wide crisis of governmental authority today. People deserve pensions and healthcare; switching from defined benefit to defined contribution pensions won’t work because wages will continue to fall and Wall Street will continue to rip off the pension funds and individual investors. I can’t invest a million dollars to qualify for a Canadian limited partnership. Offshoring and the financial system are a cancer destroying the middle class, eliminating jobs for college grads and pushing us to Egypt’s current status. How much of our massive problem should be blamed on Carter, Reagan, Clinton etc? They all cooperated with the Chamber of Commerce in the hollowing out of America. Few of them realized the consequences of their actions.

  59. frodo1314 says:

    While interesting, this is all an exercise in futility. Reagan inherited an economic mess and spent in order to win the Cold War. Clinton was President during the internet boom which changed everything. Bush II had 9/11 and 2 wars afterwards, and then the economic meltdown. Without putting each President into each of those situations and seeing what would happen – obviously not possible – there is no point to any of this. To say one spent more than another or one presided over greater economic growth than another without being able to hold those very significant variables constant is absurd. I think I’ve read Barry make this arument numerous times regarding Mr. Market himslef.

  60. ben22 says:

    here’s something fun Invictus

    take that live birth chart and move all the figures back 9 months….I trust I don’t need to explain why

    then map that over a chart of the DOW…..

    this will help you see quickly the socionomic perspective on demographic causality.

    also regarding demographics, here are three studies that may be of interest:

    Bank Credit Analyst (1997, January and 1999, March), Toronto.
    Holt, Derek, Royal Bank of Canada, as quoted on Bloomberg, June 20, 1997
    Poterba, James M. (1998, october) “Population Age Structure and Asset Returns: An Empirical Investigation.”

    otherwise, thanks the for the post.

  61. Onthemoney says:

    Invictus,

    A couple of downloadable academic studies on boomer impact below.

    It has always astonished me that apparently rational people can invest any one man (RR) with the power to single-handedly turn an economy from basket case to ‘shining city on a hill’. Doesn’t it say far more about human beings and their touching but wafer-thin belief systems than about economic reality?

    You would think the fact that worldwide demand – in the shape of millions of new human mouths to feed, clothe, house and educate – exploded after WW2 throughout the US and Europe in the fastest, greatest demographic expansion in world history, would figure prominently in people’s thinking about our historic economic boom; you’d think people might join the dots, but it seems most would rather argue the finer points of Reagan’s tax policy. Astounding.

    ‘Demography and the long run predictability of the stock market’, Jean Geanokoplos, Cowles Foundation, Yale 2002;
    ‘Demographics and financial asset prices in the major industrial economies’, E. Philip Davis & Christine Li, Brunel University 2003

  62. DeDude says:

    WoolyPasadena; best comment yet, and thanks for the link.

  63. frodo1314 says:

    WoolyPasadena (and DeDue): I don’t know. I read your post and all I can think of is simply Darwinism.

    Protectionism won’t work, and we can’t expect good wages for work that can be done somewhere (anywhere) else for less.

    It’s American exceptionalism that allowed us to get the state of enjoying a standard of living greater than most (all?) other nations.

    Do you not live better off than your parents did? I do. I bet you most of us do.

    You know, farming was once a very lucrative way to live. That changed. Let’s extend that to an exampel today. Working on an assemblyline will no longer ensure comfortable middle class status. Sorry. Learn a greater, more valuable skill then (not you of course, the assembly line worker).

    It’s the way things have been going for centuries. Become exceptional again.