Bush vs. Clinton: An Economic Performance Index

[one...two...tree 2,762]

(this was published in 2004, but still relevant)

By Robert D. Atkinson and Julie Hutto

According to public opinion polls, most Americans feel the U.S. economy has been moving in the wrong direction. Indeed, an analysis of several important economic indicators shows they're right. In apples-to-apples comparisons of annualized data, these indicators of the country's economic well-being show mostly negative change during President George W. Bush's administration, compared to mostly positive change during President Bill Clinton's administration. Presidents obviously do not control everything that happens on their watch. But it is fair -- and entirely appropriate -- to judge how they play the economic hands they are dealt. Bush's economic policies have diverged dramatically from Clinton's, and PPI believes the disparities in economic outcomes under each administration are attributable at least in part to those policy choices.

This chart compares economic performance under the two administrations on a number of especially important fronts:

Methodology

This index provides a broad view of the economy over the last 12 years by focusing on: (1) things that effect people's everyday lives, such as health insurance and homeownership; (2) measures of economic outcomes and performance, rather than inputs or intermediate variables like inflation rates; (3) percentage changes, rather than total changes in such things as the number of jobs or the dollar value of per capita gross domestic product (GDP); and (4) average annual changes -- to account for the fact that Clinton was in office for eight years, and Bush has been in office for three and a half.¹

For the most part, the numbers in the chart correspond to the annual compounded rates of progress for each indicator.² The indicators have also been inverted in some cases, so that positive scores represent moves in the right direction, and negative scores represent moves in the wrong direction. For example, poverty declined by an average of 2.29 percent in the Clinton years (a move in the right direction), and it grew by 4.33 percent annually in the Bush years (a move in the wrong direction). To make the decline a positive number and the growth a negative number, we have changed the indicator to poverty reduction. Thus, Clinton's score is plus 2.29 percent, and Bush's is minus 4.33 percent.³

What the Indicators Mean:

Our Fiscal Future

• Debt Reduction Relative to GDP⁴

  The national debt is the net amount of debt held by the federal government ($3.9 trillion in 2003).⁵ It increased under both administrations (in today's dollars). But under Clinton the debt rose more slowly and GDP rose faster than under Bush. The result is that the ratio of debt to GDP went down an average of 3.89 percent per year during the Clinton years, but has gone up an average of 0.94 percent per year during the Bush years.

• Trade Deficit Reduction Relative to GDP⁶

  The trade deficit increased during both administrations. It increased by 0.52 percent of GDP per year under Clinton and by 0.37 percent per year under Bush.⁷ This is one of two indicators where economic performance under Bush appears to be better than it was during the Clinton administration. But underneath that data is a less flattering story for the Bush years. The trade deficit grew at the rate it did under Clinton for two main reasons: because the first Bush Administration's recession had cut imports to an artificially low level, and because the economy was expanding rapidly. People were confident, so they were buying a lot of imported goods. Businesses were growing, too, so U.S. factories were importing materials to manufacture their products. Throughout this period, export growth was very strong. In the Bush years, the trade deficit has been a product of a different, and less healthy dynamic: U.S. exports have dipped dramatically relative to imports.

Employment

• Jobs⁸

  One of the most important measures of economic well-being is the number of people with jobs. The number of jobs in the economy increased 2.38 percent per year under Clinton, but it has decreased 0.17 percent per year under Bush.⁹ While it's clear that the economic downturn in 2001 was not Bush's fault, the sluggishness of the recovery is unprecedented in the period since the federal government began issuing detailed employment reports in the 1940s. There have been 1.7 million jobs created since September 2003, which may sound like a lot, but that number falls short of the 1.8 million jobs that must be created per year just to match population growth, and it falls far below the 3.7 million jobs that the administration predicted would be created when the president signed his 2003 tax cut into law.¹⁰ This slow job growth is largely attributable to both the failure of the administration's fiscal policies (which targeted tax cuts to stimulate savings rather than spending) and the failure of its trade policies (which have done a poor job of opening foreign markets to spur export growth, and have not created the conditions for an orderly decline in the value of the dollar, which would have helped ease the trade imbalance).¹¹

• Full-time vs. Part-time Jobs¹²

  The change in the number of jobs does not provide a complete picture of employment in the U.S. economy. Not only did the Clinton years produce many more jobs than the Bush years have, but they also produced more full-time jobs compared to part-time jobs. This is an important indicator because in an economic slowdown many displaced and new workers resort to part-time work as a second-choice option. Granted, some people might prefer part-time work because they have children or attend school. But, overall, a decrease in the ratio of full-time to part-time jobs implies that a greater share of workers have less stable work with fewer benefits. The ratio of full-time to part-time work rose under Clinton by 0.11 percent per year, but it has decreased at an annual rate of 1.67 percent since the beginning of 2001. In fact, the ratio of full-time to part-time jobs has not only reversed direction, but as of September 2004 it has fallen below what it was before Clinton took office.

• Jobs with Good Wages

  The economic well-being of American workers is determined not only by whether they have jobs -- ideally full-time jobs with benefits -- but also by how well their jobs pay. This indicator is a weighted index based on the change in the number of jobs in different income quintiles under Clinton and Bush.¹³ A positive value represents job growth biased toward higher paying jobs, which reflects an upwardly mobile economy. A negative value represents job growth biased toward lower-paying jobs, which reflects a more downwardly mobile economy. The score of 4.70 during the Clinton administration means that the economy produced significantly more jobs in high-wage quintiles than in the low-wage quintiles. In contrast, the score of -1.0 during the Bush administration substantiates reports that new jobs created under Bush have generally paid worse than the jobs that have been lost. For example, from 2000 to 2003, the economy added 540,820 jobs in the lowest-wage quintile. Meanwhile, 451,440 jobs were lost in the middle quintile and 357,900 jobs were lost in the two highest quintiles.¹⁴

• Americans with Health Insurance¹⁵

  Since most working Americans with health insurance get it through work, changes in the share of Americans who have health insurance is another indication of the quality of jobs in the economy. Under the Clinton administration, the share of Americans covered by health insurance went up 0.12 percent annually. Under Bush, there has been a 0.55 percent yearly decrease. Even more striking is that 5 million more Americans were without health insurance in 2003 than in 2000 and 3.8 million fewer Americans had employment-based health insurance.¹⁶

Incomes

• Productivity¹⁷

  Productivity measures the amount of economic output that each hour of work produces. It is an important indicator of economic performance because high rates of productivity traditionally correlate with strong growth in living standards. The most accurate measure of productivity covers non-farm businesses. During the Clinton administration non-farm business productivity grew 1.83 percent per year. During the Bush administration, it grew by an average of 3.76 percent per year. This is one of the only bright spots in a period of otherwise lackluster economic performance, and it is a measure that suggests hope for the economy in the coming years. But it is important to note that the late 1990s saw both productivity growth and job growth, producing a double benefit for the economy. During the Bush years, productivity has grown while jobs have not. Whether the nation can maintain the robust levels of productivity growth we have enjoyed since 1996 depends in large part on whether we put in place the right policies, including investments in research and development, and the skills of the workforce; promotion of the digital economy, including high-speed broadband deployment; and fiscal discipline to keep interest rates low.¹⁸

• Per Capita GDP¹⁹

  Simply comparing the annual growth of GDP under each administration would be misleading, because the population continues to grow. Per capita GDP -- in other words, how much output there is each year relative to the total population -- is a more accurate measure. While per capita GDP rose 2.42 percent under Clinton, it has risen just 1.62 percent per year during the Bush presidency. In large part, this is because fewer people are working.

• Median Household Income²⁰

  Median household income is the best measure of American families' well-being because it shows the true economic mid-point of the population. By definition, half of all households make more than the median, and half make less. (Average household income figures are bad measures of overall well-being, because a small percentage of very rich families can skew the picture, making everyone appear to be richer than they are.) Median household income has fallen an average of 1.15 percent per year under Bush. It rose an average of 1.65 percent per year under Clinton.

• Poverty Reduction²¹

  Poverty statistics are telling indicators of the country's economic health. The number of Americans below the poverty line fell 2.29 percent annually in the Clinton years, but has since gone up 4.33 percent annually in the Bush years.

• Homeownership²²

  No economic indicator can embody the American dream in quite the same way as homeownership. Indeed, one of the successes that President Bush frequently points to under his watch is the increase in homeownership. But while the home ownership rate has increased 0.37 percent per year during the Bush administration, that is a slowdown compared to the average increases of 1.94 percent during the Clinton administration.

Endnotes:

¹ Most of the indicators in this index do not include 2004 data, since the data are not yet available. The three exceptions are in the number of jobs, the ratio of full-time to part-time jobs, and per capita GDP. ² The indicators for jobs with good wages and the ratio of the trade deficit to GDP are not annualized in the same way as the others. (See explanations below.)

³ To determine the average annual growth in each indicator, PPI first calculated percentage change from 1992 to 2000 for Clinton and for 2000 to 2003 for Bush and then derived the percentage change per year on a compounded rate basis.

⁴ National debt figures are from the Congressional Budget Office, "The Budget and Economic Outlook: Fiscal Years 2005-2014," January 26, 2004: http://www.cbo.gov/showdoc.cfm?index=1821&...uence=0#table11. GDP numbers are from the Bureau of Economic Analysis:

http://www.bea.gov/bea/dn/gdplev.xls

⁵ This measure of debt is the most accurate figure because it is not skewed by government programs with their own sources of funding, such as Social Security and Unemployment Insurance.

⁶ U.S. Census Bureau, Foreign Trade Division, "U.S. Trade in Goods and Services - Balance of Payments (BOP) basis",

http://www.census.gov/foreign-trade/

statistics/historical/gands.pdf://http://www.census.gov/foreign-trade...rical/gands.pdf://http://www.census.gov/foreign-trade...rical/gands.pdf

⁷ Average yearly change in the trade deficit divided by average GDP in each administration.

⁸ Bureau of Labor Statistics (BLS), Current Employment Statistics,

http://data.bls.gov/cgi-bin/surveymost?ce

⁹ The index includes the most recent jobs numbers available (September 2004) from BLS.

¹⁰ "Strengthening America's Economy: The President's Jobs and Growth Proposals," Council of Economic Advisers, February 4, 2003,

http://www.whitehouse.gov/cea/

cea_growth_package_macroeconomic_effects.pdf://http://www.whitehouse.gov/cea/

cea_...mic_effects.pdf://http://www.whitehouse.gov/cea/

cea_...mic_effects.pdf

¹¹ PPI and others have estimated that approximately 1.2 million jobs have been lost due to negative trends in exports combined with rapid growth in imports of labor-intensive products. See Robert D. Atkinson, "Understanding the Offshoring Challenge," Progressive Policy Institute, May 2004:

http://www.ppionline.org/ppi_ci.cfm?

knlgAreaID=107&subsecID=123&contentID=252655://http://www.ppionline.org/ppi_ci.cfm...ontentID=252655://http://www.ppionline.org/ppi_ci.cfm...ontentID=252655 ¹² BLS, Current Population Survey (series reports)

¹³ Like the Trade Deficit/GDP ratio, the job quality indicator for wages does not simply equal average yearly change. Rather, it is a weighted index based on income quintiles, which compares the change in the income structure of job growth under Clinton and Bush. The analysis uses five income brackets based on the average salary of an occupation at the beginning of each administration, such that in the base year each income quintile represents 20 percent of total jobs. At the end of each administration, the percent of jobs in each quintile changed as people moved from lower-paid jobs to higher-paid jobs or vice versa. (For the Clinton years, PPI's analysis is based on figures from Erik Olin Wright and Rachel E. Dwyer, "The patterns of job expansions in the USA: a comparison of the 1960s and 1990s," Socio-Economic Review, 2003, v. 1, p. 289-325.) PPI then weighted the quintiles by multiplying the percentage point change in the highest quintile by 2, the second highest quintile by 1, the second lowest quintile by -1, and the lowest quintile by -2. The multiplier for the middle quintile was a neutralizing zero. These weighted growth figures were then summed to calculate a total index for Clinton and for Bush.

¹⁴ BLS, Occupational Employment Statistics. These numbers only include jobs that fall into a BLS occupational category.

¹⁵ U.S. Census Bureau, Historical Health Insurance Tables, Table HI-1, "Health Insurance Coverage Status and Type of Coverage by Sex, Race, and Hispanic Origin: 1987 to 2003,"

http://www.census.gov/hhes/hlthins/historic/hihistt1.html

¹⁶ Ibid.

¹⁷ BLS, Productivity and Costs,

http://www.bls.gov/schedule/archives/prod_nr.htm

¹⁸ Robert D. Atkinson, "The Innovation Economy: A New Vision for Growth in the 21st Century," Progressive Policy Institute, October 20, 2003,

http://www.ppionline.org/ppi_ci.cfm?

contentid=252104&knlgAreaID=107&subsecid=123://http://www.ppionline.org/ppi_ci.cfm...mp;subsecid=123://http://www.ppionline.org/ppi_ci.cfm...mp;subsecid=123

¹⁹ BEA, National Economic Accounts, NIPA Table 7.1, "Selected Per Capita Product and Income Series in Current and Chained dollars."

²⁰ U.S. Census Bureau, Historical Income Tables, Table H-6 "All Races by Median and Mean Income: 1975-2003,

http://www.census.gov/hhes/income/histinc/h06ar.html

²¹ U.S. Census Bureau, Current Population Reports, Table B-1: "Poverty Status of People by Family Relationship, Race, and Hispanic Origin: 1959 to 2003," Income, Poverty, and Health Insurance Coverage in the United States: 2003, p40,

http://www.census.gov/prod/2004pubs/p60-226.pdf

²² U.S. Census Bureau, Housing Vacancies and Homeownership Annual Statistics (1995, 2000, and 2003), Table 9: "Estimates for the Total Housing Inventory for the United States."

http://www.census.gov/hhes/www/hvs.html

Robert D. Atkinson is vice president of PPI and director of its Technology & New Economy Project. Julie Hutto is a policy assistant at the Progressive Policy Institute.

http://www.ppionline.org/ppi_ci.cfm?knlgAr...ontentID=252964

[Otto 83]

have to nap after reeding all that..

[GaryC 7]

As Obama said, there are lies, damn lies and statistics.

[HAL 9000 96]

There seem to be a lot of .gov addresses there. Clearly someone is lying. Care to explain whom?

[Otto 83]

As Obama said, there are lies, damn lies and statistics.

Didn't Mark Twain say that?

[IAMX 3,055]

As much as I know the bias that comes with the posts, this one is very well sourced, extremely credible sources (how much more credible than the Census Bureau?) at that, and logically even if one didn't know the situation they would come out with the understanding that indeed the Bush years have been rife with economic woes.

And of course, Gary wouldn't dare blame a Republican so his post is certainly not surprising.

Edited September 17, 2008 by SRVT

[GaryC 7]

There seem to be a lot of .gov addresses there. Clearly someone is lying. Care to explain whom?

It depends on who is tabulating the stats and what party is in control. Stats can be made to say anything you want. What, now you trust the government?

[Dan J 277]

As much as I know the bias that comes with the posts, this one is very well sourced, extremely credible sources (how much more credible than the Census Bureau?) at that, and logically even if one didn't know the situation they would come out with the understanding that indeed the Bush years have been rife with economic woes.

And of course, Gary wouldn't dare blame a Republican so his post is certainly not surprising.

Yup, personal responsibility is a great rallying cry. Provided you or your party doesn't have to take responsibility for anything.

[Otto 83]

There seem to be a lot of .gov addresses there. Clearly someone is lying. Care to explain whom?

It depends on who is tabulating the stats and what party is in control. Stats can be made to say anything you want. What, now you trust the government?

Yup...could take the same raw data and spin a whole different result.

[Dan J 277]

There seem to be a lot of .gov addresses there. Clearly someone is lying. Care to explain whom?

It depends on who is tabulating the stats and what party is in control. Stats can be made to say anything you want. What, now you trust the government?

Numbers are number and will always tell you the same thing. What the numbers mean will depend on the person interpreting it. The temperature outside is a statistic, but it might be hot for one person or cool for another.

As far as the government numbers are concerned, most of the data collection processes have remained unchanged during bush and Clinton. Its not hard to measure the number of jobs created or lost or the number of Americans with or without health care.

[Otto 83]

Numbers are number and will always tell you the same thing. What the numbers mean will depend on the person interpreting it. The temperature outside is a statistic, but it might be hot for one person or cool for another. Ahh but the temperature in the shade can be very different than the temp. in direct sun...

As far as the government numbers are concerned, most of the data collection processes have remained unchanged during bush and Clinton. Its not hard to measure the number of jobs created or lost or the number of Americans with or without health care.Process may/may-not have changed much, but questions asked certainly have.

[HAL 9000 96]

There seem to be a lot of .gov addresses there. Clearly someone is lying. Care to explain whom?

It depends on who is tabulating the stats and what party is in control. Stats can be made to say anything you want. What, now you trust the government?

Seem to be a lot of 'em. And they all agree. Perhaps there's something about certain gov sectors like the Census, CBO, EIA, etc, that you can read up on as being mostly independent of political affiliations since, surprise... they deal with numbers as they come in. Unless of course, the control comes in the form of people losing their jobs... which can also be documented.

Now, we do know that the Bush administration has repeatedly tried changing scientific numbers to fit a certain world view- but that's another discussion.

[aidan80 9]

(this was published in 2004, but still relevant)

By Robert D. Atkinson and Julie Hutto

According to public opinion polls, most Americans feel the U.S. economy has been moving in the wrong direction. Indeed, an analysis of several important economic indicators shows they're right. In apples-to-apples comparisons of annualized data, these indicators of the country's economic well-being show mostly negative change during President George W. Bush's administration, compared to mostly positive change during President Bill Clinton's administration. Presidents obviously do not control everything that happens on their watch. But it is fair -- and entirely appropriate -- to judge how they play the economic hands they are dealt. Bush's economic policies have diverged dramatically from Clinton's, and PPI believes the disparities in economic outcomes under each administration are attributable at least in part to those policy choices.....

I have to say as someone that's still very new to the political system in the US this post is very informative. It really does show the cold hard facts that Clinton was a superior president over the bush failure. Is it just me or do republican presidents tend to waste more, spend more and kill more than their democratic rivals while in office?

[IAMX 3,055]

(this was published in 2004, but still relevant)

By Robert D. Atkinson and Julie Hutto

According to public opinion polls, most Americans feel the U.S. economy has been moving in the wrong direction. Indeed, an analysis of several important economic indicators shows they're right. In apples-to-apples comparisons of annualized data, these indicators of the country's economic well-being show mostly negative change during President George W. Bush's administration, compared to mostly positive change during President Bill Clinton's administration. Presidents obviously do not control everything that happens on their watch. But it is fair -- and entirely appropriate -- to judge how they play the economic hands they are dealt. Bush's economic policies have diverged dramatically from Clinton's, and PPI believes the disparities in economic outcomes under each administration are attributable at least in part to those policy choices.....

I have to say as someone that's still very new to the political system in the US this post is very informative. It really does show the cold hard facts that Clinton was a superior president over the bush failure. Is it just me or do republican presidents tend to waste more, spend more and kill more than their democratic rivals while in office?

Actually, no, fiscal responsibility has long been a code of conduct for Rockefeller Republicans. However, the neo-conservative gangrape that started at Reagan has slowly wiped them out, leaving them with people who, as usual, preach something (in this case, fiscal responsibility), and, of course, they're dragged kicking and screaming from the closet and embarrassed in front of the public showing they lied. Go figure.

Edited September 18, 2008 by SRVT