The Democratic Economy

Former Fed Vice Chairman Alan Blinder makes a pretty convincing argument, that no matter where you are on the income scale, you do better under a Democratic President.

The stark contrast between the whiz-bang Clinton years and the dreary Bush years is familiar because it is so recent. But while it is extreme, it is not atypical. Data for the whole period from 1948 to 2007, during which Republicans occupied the White House for 34 years and Democrats for 26, show average annual growth of real gross national productof 1.64 percent per capita under Republican presidents versus 2.78 percent under Democrats. That 1.14-point difference, if maintained for eight years, would yield 9.33 percent more income per person, which is a lot more than almost anyone can expect from a tax cut.

What’s even more remarkable is the differential at different income percentiles (chart above) in terms of wealth generation. Though the very rich (95th percentile) do slightly better under Democrats, the very poor (20th percentile) do remarkably better, thus shrinking the income inequality that builds up under Republican Presidents.

Needless to say, McCain vows to continue the Republican tax cuts for the wealthy that the last four Republican Presidents have favored.

Elections matter.

0 Responses to “The Democratic Economy”


  1. Stacey Derbinshire

    Nice writing style. I look forward to reading more in the future.

  2. Stacey Derbinshire

    Nice writing style. I look forward to reading more in the future.

  3. Jason Dragon

    Too bad the president does very little. to effect the actual economy. I think the boom time of the 1990s and the bust of 9/11 had MORE to do with this than any activity the president did during that time. The boom of the 1990s was mostly due to investments made in the 80′s and technology that was unrelated to anything a president did.

    Jason Dragon
    http://blog.capitalactive.com/

  4. Jason Dragon

    Too bad the president does very little. to effect the actual economy. I think the boom time of the 1990s and the bust of 9/11 had MORE to do with this than any activity the president did during that time. The boom of the 1990s was mostly due to investments made in the 80′s and technology that was unrelated to anything a president did.

    Jason Dragon
    http://blog.capitalactive.com/

  5. Jon Taplin

    Jason- They tracked this back to 1945. You Republicans can’t weasel out of that one.

  6. Jon Taplin

    Jason- They tracked this back to 1945. You Republicans can’t weasel out of that one.

  7. Rick Turner

    Sure they can, Jon. That’s what they do; it’s their essential nature.

  8. Rick Turner

    Sure they can, Jon. That’s what they do; it’s their essential nature.

  9. Jason Dragon

    They tracked it based upon who is the president at the time the effect happens. But if the president can do anything it still takes a few years for it to happen. Such as the pain caused by Carter was not fully felt until Reagan. But his leadership turned it around by the time he left office. I am simply saying that these numbers are misleading and fairly meaningless. Many of the stats the media uses are.

  10. Jason Dragon

    They tracked it based upon who is the president at the time the effect happens. But if the president can do anything it still takes a few years for it to happen. Such as the pain caused by Carter was not fully felt until Reagan. But his leadership turned it around by the time he left office. I am simply saying that these numbers are misleading and fairly meaningless. Many of the stats the media uses are.

  11. Rick Turner

    Jason, would you say the poor got richer and the rich got poorer over the past thirty years or so?

  12. Rick Turner

    Jason, would you say the poor got richer and the rich got poorer over the past thirty years or so?

  13. Tennessee Williams Shakespeare

    Jason

    Where did you get that wonderful echo chamber?

    TWS

  14. Greg

    Check out this graph of the Debt. The 1940s through the 1970s were pretty much stable, less than a trillion dollars, but once we hit Nixon in the 1970s it starts ascending, then woop, not so much with Carter, then it ramps up again with Reaganomics there, even worse with Bush-1, then a miracle happens with Clinton, it reverses until it almost levels out, then Bush-2 and Bam!, straight up into the stratosphere. Maybe once Barack is in we should extend the term limits?

    website source

    There are more interesting snippets on this site, such as:

    Mr. Clinton took a more progressive approach and, as Roosevelt had done, turned the Hoover model upside down. Instead of making the rich richer in the hope that they would spend that money and thus create demand and therefore jobs, he created a tax environment that encouraged the creation of jobs directly. It was an economic environment where everyone could get rich, not just a few, and it worked. Lots of jobs and lots of new millionaires were created while Clinton was in office. More new millionaires were created during the Clinton administration than at any other time in our history.

    The Democratic tax environment obviously has something to do with the wealth of the middle classes.

  15. Guy

    “Such as the pain caused by Carter was not fully felt until Reagan. But his leadership turned it around by the time he left office.”

    Your post before this one said the president does very little to effect the economy. So, you’re full of BS either way.

  16. Johanna

    Just wanna say, interesting reading. :)



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