Which Party Ruined the Economy?

Here’s a quick, hopefully thought-provoking post.

Under Pres. Reagan there was a large expansion in the size of the federal government. Who had control of Congress during those years? Democrats. Pres. Clinton gets credit for having a good economy and balancing the budget but who is responsible for making and passing budgets? Congress. Pres. Clinton did the politically expedient thing and worked with the Republicans in Congress to get the budget balanced (although, the budget would prove to be unsustainable because it was based on unrealistic expectations of future tax income; the balanced budget was in trouble starting in late 2000 and early 2001 when a recession hit).

We had a good economy in the 1990s with Republicans in charge of Congress and with a Democrat in the White House. Things went south with the Internet bubble burst in 2000 and 2001. That was the start of a recession made much worse by the events of 9/11. Thankfully, the “Bush” tax cuts (Republicans were still in control of Congress) were passed. They helped shorten the recession. What was not good was passing them and increasing our federal spending. The economy was going along quite well until the housing market crashed in 2006-2007. This was one of the main factors resulting in the biggest recession the U.S. has faced. I’m not going to blame any political party for the recession but I have to point out that Democrats (and many Republicans) helped put in place government housing policies in the 1990s that were factors in the housing bubble burst. Further, Democrats were the ones opposed to regulations Republicans were trying to put in place that might have reduced the housing market crisis. Both parties are culpable for their actions or inactions though.

In 2006 (2007) Democrats took control of the House and Senate. In 2007 the recession officially started. Things were bad with the Republican Pres. Bush and a Democrat majority in Congress. They passed some bailout policies that were weakly effective at best and harmful at worst. Then Pres. Obama took office in 2009 (2008 election). He nearly had a Democrat supermajority in Congress with which to work. It seemed the perfect time to get things done to help the economy but instead of focusing on the economy, or at least trying to stay out of its way (there were other bailouts, some that seemed effective – the auto bailouts – but most have no measurable effects other than a huge deficit), Pres. Obama and the Democrats passed an environmental bill (which no one had the opportunity to read before it was passed) and a gigantic health insurance bill (which also was not read before it was passed).

In 2010, after about 2 years in office, Pres. Obama said he was serious now about the economy. Things were still bad. In 2010 (starting tenures in 2011), Republicans took control of the House and gained seats in the Senate. In 2011 the economy finally started to improve after Democrats no longer had complete control of Congress. It’s still rough but getting better.

What I think is interesting is that the economy seems to flourish when Republicans are in charge of Congress and it seems to flounder when Democrats are in charge of Congress. It also seems that our economy is finally starting to recover in spite of the worst efforts of many Democrats (and many Republicans who either went along or didn’t fight bills enough). It seems like the best course of action would have been either to do nothing or pass smaller, more focused stimulus measures. Tax cuts always work to improve the economy and are usually the best way to stimulate the economy. They just have to be accompanied by a reduction in spending. Basically, the government should get out of the way of the economy and provide focused regulations when necessary.

This post is biased. I wrote it this way on purpose to provide a counter-point to many arguments I have heard or read that praise Pres. Clinton for the good economy of the late 1990s, blame Pres. Bush for the 2007 recession, and praise Pres. Obama for the current economic improvements. There are many people who blame all good things on actions of Democrats and all bad things on actions of Republicans. That’s such a gross oversimplification of who things actually work that it’s not an effective argument (well, it is often effective because many people do not think critically and just accept it as truth). I wrote this post to show that I can argue just the opposite – that poor economies are the result of the actions of Democrats; after all, Congress is in charge of spending and passing laws and our economy suffered the most with Democrats in charge.

What’s the truth? Probably something in the middle (Democrats and Republicans are both responsible). Our federal government is too big and certainly too inefficient. I’d argue that the inefficiency (bureaucracy) is worse than the size of government. We need a Congress and a president who are willing and able to increase the efficiency of the government in part by reducing its footprint.

One thought on “Which Party Ruined the Economy?”

  1. The author of this blog post need not have equivocated regarding bias of this post. The author, having simply stated the history of who was in power when things went bad is not biased. It is doing the job that 90% of journalists will not do because it is their tribe (Liberal progressive Democrats) that have caused the vast majority of recessions as unintended consequences of their actions and policies in the name of social justice. Who has paid by far the biggest price for these collapses? The very people the LibDems noisily purport to defend, those on the lowest rungs of the economic ladder. The market collapse was indeed caused by LibDem polices/ laws which forced the creation of the subprime market wherein banks were FORCED to sell loans to people who could not afford to pay them back. A couple trillion dollars got invested in these bad loans. The history of this is all a matter of public record. The NYT and all other LibDem media outlets covered the entire history of the creation and nurturing of this time bomb. Now that it has gone off the LibDem journalists who covered the history steadfastly refuse to do the root cause analysis, preferring to scapegoat capitalism, just as Marx & Co. would do. So if you watch any LibDem analysis of the 2008 crash, or get into a discussion with a LibDem about same, you would do well to keep asking them: When they say it was the banks loading up on toxic assets that caused the crash, you should ask “Isn’t what makes these assets toxic the fact that they were ALL subprime assets?, and weren’t banks forced to lower their lending standards by congress by Carter/Clinton community reinvestment acts?”. That would actually be a major start in doing the root cause analysis. As for prospects of future damage caused by LibDems, it is guaranteed because they seem to be under the delusion that the magnitude of their good intentions somehow renders it impossible that serious unintended consequences can result from their policies. The fact that 90% of the media then runs cover for the LibDems keeps the voters clueless as to who caused the problem. We will not be done with this cycle of disasterous election outcomes and consequences of same until Liberal media bias is remedied.

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