Another Inconvenient Truth: The U.S. Economy
Significantly Better Under Democrats
Republicans have always
extolled the virtue of fiscal conservatism as if it were an
indisputable law of nature. But in this case, a different law applies.
That's Steven Colbert's famous law of political reality:
"Reality Has a Well Known Liberal Bias." It turns our that for
at least the last 60 years the economy has always done
significantly better under Democrats. This has been a well known fact for many years, but it has
almost no recognition in the mainstream media, in spite of the
alleged liberal bias.
The graph shows that, except for the
top 5 percent, everyone's income grows more under Democrats than
Republicans, and the poor and middle class do much better. Even
the top earners do almost as well under Democrats as
One might consider this an anomaly or statistical fluke, but it
has proved to be consistent at least since the end of World War
II, spanning five Democratic and six Republican presidents. Kevin
Drum discussed the consistency of these results in a 2005 post
Washington Monthly blog:
Skeptics offer two arguments:
first, that presidents don't control the economy; second, that
there are too few data points to draw any firm conclusions.
Neither argument is convincing. It's true that presidents don't
control the economy, but they do influence it — as everyone
tacitly acknowledges by fighting like crazed banshees over every
facet of fiscal policy ever offered up by a president.
The second argument doesn't hold water either. The dataset that
delivers these results now covers more than 50 years, 10
administrations, and half a dozen different measures. That's a
fair amount of data, and the results are awesomely consistent:
Democrats do better no matter what you measure, how you measure
it, or how you fiddle with the data.
The facts are hard to dispute;
indeed, the historical record is now so stark that diehard
Republicans are probably starting to wonder if there is a curse.
Over the period for which modern statistics are readily
available, Democrats have outperformed Republicans by almost
every traditional measure of economic performance (per capita
GDP growth, unemployment, inflation, budget deficits).
Yes you read that right:
"almost every traditional measure of economic performance." You
name it, Democrats do better.
Thanks to their pro-business approach and the anemic recovery, Republicans would seem to have a clear path to grab the economic mantle heading into the 2012 race for the White Houe.
According to McGraw-Hill’s (MHP) S&P Capital IQ, the S&P 500 has rallied an average of 12.1% per year since 1901 when Democrats occupy the White House, compared with just 5.1% for the GOP.
Likewise, gross domestic product has increased 4.2% each year since 1949 when Democrats run the executive branch, versus 2.6% under Republicans.
Even corporate profits show a disparity: S&P 500 GAAP earnings per share climbed a median of 10.5% per year since 1936 during Democratic administrations, besting an 8.9% median advance under Republicans, S&P said.
Due to their “tax-and-spend” reputation, investors expect Democratic administrations to underperform Republican ones and be “poison to any portfolio,” Sam Stovall, chief equity strategist at S&P Capital IQ, wrote in a note. “History shows the opposite to be true, however.”
They halfheartedly try to weasel around this incontrovertible fact by suggesting that it's the result of the economic stimulus effect of Democrats' profligate spending. But the truth is it's Republicans who are the big spenders.
Economist Larry Greenberg
provided a handy summary in 2008 on his
Current Thoughts blog:
With twenty years on each side and since some
of the ups and downs of the U.S. business cycle lie beyond the
direct control of policymakers, one would expect similar results
in the two groups. Not so. Instead, one discovers below a
significant advantage when a Democrat occupied the White House
in each of the five categories.
% Per Annum
In 2008 Tommy McCall in the
New York Times looked at investment performance under
Democratic and Republican administrations since 1928. Again
Democratic performance was much better. $10.000 invested under
Democratic administrations would net $300,671 over 39.9 years,
while the same amount invested under Republican administrations
would net only $11,733 over 39.7 years (including the
Hoover administration) or $51,211 over 35.7 years (excluding the
Given all of this, it's not surprising that
poverty decreases under Democrats and increases under
Democratic Short List crunches the data:
Examining the Census data, what I found was
this: during the 20 years of Republican administrations, each
year on average the number of Americans living below the poverty
line rose by 416,400, while during the 20 years of Democratic
administrations, each year on average this number fell by
829,900. I then applied the analysis suggested in Michael
Kinsley's article: I credited each year's performance to the
previous year's administration. In this analysis, during the
years credited to Republican administrations, the number of
Americans below the poverty line rose 371,095 on average each
year, while during the years credited to Democratic
administrations, this number fell 845,421 on average each year.
Rachel Maddow summed it up nicely on September
11, 2010, on her MSNBC program, including an interview with Ezra
The lesson from all of this is that the Republican
supply side, borrow and spend economic policy simply doesn't
work. The evidence is conclusive.
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