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.

Basking in Obama’s Reflected Glory

Republicans will not be able to win this election. Obama will probably win the presidency. However, if McCain wins, many Democrats will automatically say that Republicans “once again” stole the election (although the only people trying to steal the election in 2000 were Democrats). This will start another 4-8 years of hatred between parties. Once again, everything bad from the economy to natural disasters will be blamed on Republicans (yes, there are quite a few people in the U.S. who honestly believe Pres. Bush was responsible for Hurricane Katrina – I’m not talking about the federal government’s response to the hurricane, I’m talking about the actual hurricane itself).

For many people (and I hear and read this a lot), Republicans can do no right and Obama can do no wrong. What’s funny is that fellow Democrats are basking in Obama’s reflected glory. It’s look like Democrats will have large majorities in the Senate and the House, turning our federal government into a single party system. Further, a number of Supreme Court Justices will be up for retirement soon and Obama, with the legislative branch on his side, could pack the court with whomever he wants. That could mean that all 3 branches of government roughly followed a single ideological system!

What I don’t understand is why voters want to increase the power of the ruling party in Congress when Congress has very low approval ratings (roughly 15%) and very high disapproval ratings (roughly 75%). That’s lower than Pres. Bush’s approval ratings! The Democratic ad campaign was successful in convincing many Americans that all the country’s problems are caused by Republicans. Yes, they are to blame for some of the problems, but certainly no more than Democrats are.

I’ve heard the argument that it would be good for the economy to have a Democratic president because if you look at the past 30 years, budget deficits and the national debt have gone up a lot when a Republican was in office (of course, we only have 12 years of those 30 where we had a Democrat president, so the sample is biased). However, Democrats often had the majority in the House and sometimes in the Senate while Republicans were in the White House. So maybe the problem was the Democratic legislative branch – after all, they make the laws and authorize the spending of the money.

However, most people don’t really think through the ramifications of having a single-party federal government (it’s pretty close anyway – Republicans and Democrats are more similar than different – but do we really want it to actually be one party in charge?). It’s a good time to be a Democrat.

Seating Delegates at the Democratic National Convention

I’m resuming my posts now that we are building up to the general election in November. Today the DNC started in Colorado. It’s receiving major press coverage on all of the major news sites. The media seem to think that we can’t get enough of the convention or politicians. It’s like it’s the Academy Awards; I guess the politicians at least do something fairly useful.

The Democratic Party decided that both Florida and Michigan will get to seat all of their delegates. Does the party have no morals or convictions? They clearly stated that anyone who broke the rules by having the primary too early would lose all of their delegates. Both Florida and Michigan knew the rules but went ahead with their primaries. A few people raised a fuss but those states knew the rules. Once Sen. Clinton started losing to Sen. Obama, her campaign started making a big deal about the “lost” delegates. Clinton only would benefit from having them seated. Her name was on both ballots but Obama’s wasn’t. From the start, neither Primary was even close to fair; they were heavily biased towards Clinton. Many people didn’t even vote because they knew their votes wouldn’t count.

A big fuss was made (“We want our votes to count; it’s not a Democracy if our votes don’t count”) and after much deliberation the Democratic Party decided to let Florida and Michigan seat half their delegates. What a farce! Just the other day they announced that both states would seat all their delegates. A double farce! States can break party rules and suffer no consequences. That’s not the foundation for a democracy. I’ve lost what little respect I had for the Democratic Party. It’s like having a law against murder but never pressing charges when someone murders someone else. There’s no accountability. On second thought, that pretty much is the official platform of the Democratic Party – pass your responsibility on to someone else. There is now nothing to stop a state from holding primaries early and when threatened with the loss of their delegates, all they have to do is point to the 2008 primaries and say, “Well, you let Florida and Michigan have their delegates so why can’t we have ours?” Where is their conviction? Where is their integrity? Apparently they don’t have any.