Presidents and Jobs (Average Private Payrolls Added Per Month Since Carter)

Given that Republicans are often billed as the pro-business party, shouldn't we find business booming under Republican Presidents? Shouldn't we find payrolls rising significantly from all that business expansion?

For President Reagan, to be fair, we should note that his early years were hurt by the same force that crushed payrolls under President Carter during April through July of 1980: the high rates with which Paul Volcker battled inflation. Double-digit prime interest rates diminished employment under both Presidents Reagan and Carter. While those unusually high interest rates may have been necessary to get control over inflation, those high rates severely slowed expansion and thus hiring. However, that doesn't remove the possibility that President Reagan's descent from Carter's payroll numbers hinted at the start of a Republican trend under Trickle-down policies. After all, the Bush I policies were largely a continuation of the Reagan policies. If we average together the Reagan and Bush I months, together they get 113.3 thousand jobs / month. That's less than either of Carter or Clinton. And it's also less than the rate of increase we've seen since the turn-around on 2/1/2010 under President Obama.

While these figures aren't conclusive proof alone, add them together with a few other factors such as that GDP growth has lagged under the lowest top marginal tax rates. It sure looks like Trickle-down (or Supply-side economic or Reaganomics) failed us in a big way.

Maybe we should stop accepting the notion that talking about lowering taxes and deregulating would actually be business-friendly. Maybe we should instead consider ways to return to the sort of sensible, progressive tax structures we had before Reagan lead us down the road to decline. Instead of calling it red tape, maybe we should consider regulation's value for helping business manage risk, compete on a level playing field, and have more predictable returns. And maybe we should get back to expecting serious infrastructure projects and demanding aggressive investments in our research and development programs to build our avenues for growth.

Notes on methodology: Generally speaking, the January in which the executive transitions from one branch to another will be almost entirely impacted by the outgoing President's policies and not those of the incoming President. As such, the average uses the change in monthly manufacturing payrolls starting with the change from the first full month of the President's term (i.e., from the February that is the first full month to the March thereafter) and going until the first full month after the President's term (i.e., the last change counted is from the January during which the President in question is last in office to the February thereafter). Data from BLS/FRED.

Presidents and Manufacturing

Average manufacturing jobs / month gained or lost for the past half dozen Presidents and since the turn-around on January 2010.

Notes on methodology: Generally speaking, the January in which the executive transitions from one branch to another will be almost entirely impacted by the outgoing President's policies and not those of the incoming President. As such, the average uses the change in monthly manufacturing payrolls starting with the change from the first full month of the President's term (i.e., from the February that is the first full month to the March thereafter) and going until the first full month after the President's term (i.e., the last change counted is from the January during which the President in question is last in office to the February thereafter). Data from BLS/FRED.

Trends in Manufacturing Payrolls

A bit of manufacturing job historical info:

• Peak: 6/1/1979 (shortly before Reaganomics) at 19.553 million manufacturing jobs
• Decline from 6/1/1979 to 2/1/2001 (first full month of Bush II's first term): 2.523 million jobs, a 12.9% drop
• Decline from 2/1/2001 to 2/1/2009 (over the course of Bush II's Presidency): 4.644 million jobs, a 27.3% drop
• Post Bush II floor: 1/1/2010 (less than a year after President Obama sworn in) at 11.458 million jobs
• Increase from 1/1/2010 to 8/1/2012 (turnaround to present): 512 thousand, a 4.5% rise

But When Did Those Jobs Disappear, Mitt?

The state of industry speaks for itself better than some candidates do. When Mitt Romney in Toledo on the 26th of September, 2012 said, "we see manufacturing jobs disappear", he neglected to mention that most of that disappearing happened during the tenure of a President who implemented the same policies that Romney himself is pushing. He also neglected to mention that under the current President they're not disappearing anymore. Under the current President, we've seen manufacturing jobs grow again.

In manufacturing in specific, manufacturing jobs moved mostly sideways through the first quarter of 2006, creeping to a peak in April of that year. From the April 2006 peak, 1.844 million manufacturing jobs were lost under the Bush II administration by the first full month of President Obama's term. From the floor in January 2010, we've recovered 512 thousand manufacturing jobs as of August 2012. There's still a long way to go, but adding half a million manufacturing jobs since January 2010 is growth, not "disappearing".

When It Went Wrong

When did things start down? Where was the bump in the road that triggered the Great Recession? In this election season, that question matters in the short term for trying to choose the folks most likely to not send us back down the same path. Partisans from both major parties would love to tell us things when wrong under the other party's watch, but only one side can say it accurately. So when did it start?

To begin answering that question, we can't just look at GDP or unemployment alone. While those may tell us when things really got bad, they don't tell us when the problem started. To get a better idea of when the problem started requires focusing further back than when it became obvious to everyone. The overall economy was hammered by a financial crisis, but that financial crisis didn't just spring up on its own. The financial crisis was triggered by a stumbling housing market. So when did housing tumble off the cliff?

Housing fell off a cliff in 2006; in 2007/8, it was just still falling from 2006.

Building permits peaked on September 2005 and then proceeded to fluctuate through January 2006. Housing starts peaked in January 2006. Then after January 6th, both building permits and housing starts tumbled off that cliff, followed soon after by residential construction. Between the January 2006 peak and the start of the 110th Congress in January 2007, housing starts dropped by 38% and residential construction dropped by 15%. The housing industry was collapsing throughout 2006 and bringing layoffs starting with housing and spreading into related domestic industries such as window and cabinet making. Following on housing's decline, manufacturers new orders hit choppy waters in 2006, . By the end of 2006, the effects weren't yet enough to seriously shake unemployment or turn GDP negative, but the decline did start to show in other measures and a slackening of quarterly GDP growth. The annual growth in consumption per capita for 2006 started back down from what we'd seen in 2005.

Demand/person slowed down in 2006 ... before getting to an actual drop.

Put it all together it's really only a technicality that the recession didn't hit until late 2007. In fact, the economy was already in rough shape in 2006, with really lousy growth evident over the 2nd and 4th quarters of 2006, to the point of quarterly GDP growth just barely staying out of negatives.

2006 wasn't technically recession; but it was darn close.

Clearly, the first wave of what became the Great Recession was well under way during the watch of the 109th Congress (2005-2006) under President Bush II, even though we hadn't reached technical recession yet. What happened during the 110th Congress was just that it became clear that the problem -- which was already under way -- was spreading from housing into finance and from there to everything else. The curtain covering over the problems was pulled away in 2007-2008, but the trouble was there before the curtain pulled away. Republicans held majorities in both Houses of the 109th Congress, as they had for almost all of the time since 1995 (except for a slim Senate flip in part of the 107th Congress). By 2006, Republican policies had held sway in both the executive and legislative for years and they were still in control. While there's room for debate as to how much involvement government had in the creating or allowing the mess, the weight of evidence says that if one were going to blame governance, the party to blame for that mess is Republican.

Clint Eastwood at the RNC: Bashing W?

OK, they didn't intend him to make comments that any reasonable observer would take as a slam of the most recent Republican President, did they?

That sure sounded like a slam on Bush II. Did Eastwood forget that it was a Republican President who took us into Afghanistan and oversaw most of the length of the operations there? If one were going to make a dig against the wisdom of going into Afghanistan, the only administration that can reasonably be a dig against is the Bush II administration.

"But we did it ..." Yes, Republicans did that.

While perhaps it could have been handled differently, there were valid reasons for going into Afghanistan despite the way it turned out for Russia. Going after Al Qaeda at their training camps was one of W's more reasonable actions, something which can't be said for the Iraq diversion. But whether one finds it wisdom or folly, going into Afghanistan was most certainly on the plate of Bush II.

Unemployment Rate Changes Put In Perspective

Let's put the levels of unemployment at this point in the Presidential cycle into perspective.

The above chart tracks the point changes  in the unemployment rate since the first full month of each of  the current and previous Presidents' terms. For President Obama, the numbers show unemployment brought back down to where it was as his watch was just getting started. For President Bush II, the numbers at the equivalent point in his first term show unemployment significantly worse than where it was as his watch was just getting started.

Grunwald Clarifies Exactly Where Ryan Stands

Highlights from Grunwald on Ryan in "Paul Ryan and the Stimulus: A Match Designed to Make My Head Explode":

"Funny, Ryan somehow forgot to mention that he was one of those proponents. He had voted for the Bush stimulus, along with the Bush tax cuts, the Bush wars, the Bush security spending binge, the Bush prescription drug benefit, the Bush highway bill that included the Bridge to Nowhere, and the Bush bank bailout. Fiscal conservatism!"

and

"Republicans never explained how $715 billion worth of tax cuts and spending could be good public policy while $787 billion worth of tax cuts and spending was freedom-crushing socialism. In the minority, they didn’t have to. And Paul Ryan? As usual, he fell off both sides of the horse. He voted for the ideological tax-cut bill that would have increased the deficit, and the political spending bill that would have increased the deficit. And then he railed about Obama and the Democrats increasing the deficit."

Grunwald, of course, gave more detail around the above, but those're the real biting crux of it. For all of his reputation, Paul Ryan really turns out to be about nothing more than GOP partisan politics. His records shows that he's got the typical Republican history of ranting about Democrats and deficit spending out of one side of his mouth while voting for Republican budget-busting policies with the other.