Monday, November 3, 2014

A Republican or Democrat Economy?

Republican or Democrat, which one is better for the economy? It is always an interesting question. Generally speaking, since the Republican party seems to represent “management” and the Democratic party, “labor” it seems logical to assume that the Republicans would be more pro-business and the economy would do better following their policies. That may or may not be the case. I think everyone will agree that when the economy is doing well, things are humming along and unemployment is low and jobs are plentiful. So the Unemployment Rate should be a good indicator. So how has the country done under the different administrations since the 1950’s? I start at the 1950’s because before that there are too many distortions such as World War II and the fact that the parties didn't really line up the same. For instance, Teddy Roosevelt was a Republican, however, he was considered a “Progressive” and an “Environmentalist” busting up monopolies and establishing the National Park System to preserve natural habitats which today would likely be leaning more in the Democratic party camp. Since the 1950’s I wanted to look at where the unemployment rate stood during the periods of leadership of our two political parties. Since we are looking at the effect of the party in power, lets look at the unemployment rate at the time each party took office. Here are the results from US bureau Labor Statistics for January of years noted: Eisenhower (R) 1953 to 1961. Unemployment went from 2.9% to 6.6% Kennedy/Johnson (D) 1961 to 1969 Unemployment went from 6.6% to 3.4% Nixon/Ford (R) 1969 to 1977 Unemployment went from 3.4% to 7.5% Carter (D) 1977 to 1981 Unemployment went from 7.5% to 7.5% Reagan/Bush(R) 1981 to 1993 Unemployment went from 7.5% to 7.3% Clinton (D) 1993 to 2001 Unemployment went from 7.3% to 4.2% Bush (R) 2001 to 2009 Unemployment went from 4.2% to 7.8% Obama (D) 2009 to present Unemployment went from 7.8% to 5.9% Weird, huh? When the Democrats are in power, the employment picture gets better or stays the same. When the Republicans are in power, the employment picture either gets worse or stays about the same. You would think the opposite would be true. Oddly, it is a similar situation for the deficit: You would think that conservative minded Republicans would hold the line on spending while the tax-and-spend liberals in the Democratic party would run up the bill. Nope. Recently, during the administrations of Clinton and Obama, the deficits were reduced versus when Reagan, Bush and Bush were in power, deficits skyrocketed. It makes it tough to know who to vote for, doesn't it?

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