Prologue: The solitude and serenity associated with walking a dog are supposed to clear your head to make room for the processing of new ideas. This morning it backfired. On our daily stroll to view the wild life on the creek behind our home, I wondered how the Democrats could make a case against Trump’s claim of unprecedented economic success, especially after a day when the Dow closed at an all-time high. The answer: Precedent.
Coming into the 2020 election, you can bet the farm Donald Trump and the GOP will be touting the over-stimulated economic growth over the past two years, focusing on two data points. First, the U.S. stock indices are at an all time high even though the recent spike in stock prices is due to indications of a weaker economy and a pending Federal Reserve decision to further juice economic activity with lower interest rates translating into a reduced return on investments from bonds and other long term financial instruments. The second is the fact, on Monday, the current economic expansion reached 121 consecutive months, the longest in the nation’s history.
I can see it now, White House and Republic National Committee (RNC) propaganda, “If you like economic growth, vote GOP.” Call it the Larry Ellison effect. Ellison started touting Oracle, the company he founded, as the world’s largest supplier of connectivity equipment before they were even in the top 10. And enough potential customers, minus any proof otherwise, made Ellison’s words a self-fulfilling prophecy.
Such is the claim the GOP as the party of economic growth. On Monday, Axios published a chart of the 12 post WWII economic expansions. And once again, the facts (damn them) do not support the RNC’s or Trump’s claim.
- There have been three expansions lasting more that 100 consecutive months since 1945.
- The first (106 months) started in February, 1961 and lasted until December, 1969. During that period John Kennedy and Lyndon Johnson were in the White House 95 of those 106 month. It ended during the Nixon administration after only 11 months.
- The second (120 months) began in March, 1991 and ended in March, 2001. Of the total time span, Bill Clinton accounted for 96 months while George H. W. Bush and son W. made up the other 24 months.
- The most recent and longest (currently 121 months) began one month after Barack Obama took office despite being handed the worst economy since the Great Depression (Donald, that’s what I call real carnage). While the recovery may have been slower than some had hoped, it remained intact for the remaining 95 months of his presidency. To date, the expansion has continued during Trump’s first 26 months in office.
Notice a pattern? In each case, whether a Democratic president was handed the beginnings of an expansion (Clinton) or it started during their time in office (Kennedy and Obama), growth continued unabated for the following eight years. The first two times they were handed over to a Republican administration (Nixon in 1969 and W. in 2001) the expansions vanished in 11 months and three months, respectively. The verdict is still out on Trump, but signs suggest, if a Democrat is inaugurated on January 20, 2021, he or she will be handed a negative growth economy.
But Dr. ESP, anyone can make a case with anecdotal information. Okay, try this on for size. Since 1945, Democrats have held the White House for 384 total months of which 362 or 94.27 percent of the time there was a rise in gross domestic product (GDP). In contrast, a Republican president has occupied the White House for 461 months during which GDP was positive for 343 months or 74.40 percent (including Trump’s 26 for 26 start).
Just imagine you were forced to choose one of two opportunities to double your life savings. One choice had a 94.27 chance of success. The odds of winning for the alternative are 74.40 percent. Only a fool would select the latter. QED.
For what it’s worth.
Dr. ESP