Like Father, Like Son: The Economic
Indicators Head South
"The first Bush chose to stand pat as
the economy stumbled and unemployment rose in his last two years; his son
chose to put all his chips on a huge tax cut that blew a hole in the federal surplus,
may increase upward pressure on long-term interest rates and has severely
crimped his ability to aim targeted initiatives at such problems as the increase in
poverty or the decline in health-care coverage."
September 30, 2002
latimes.com E-mail story
Ronald Brownstein:
When it comes to the economy, the Bush family is
on an intergenerational losing streak.
Nearly halfway through his term, President Bush's
economic record is beginning to look a lot like that of
his father, former President George Bush. That isn't
good news for the younger Bush. Or for the
economy.
Most key measures of economic well-being for
average families declined under the first President
Bush. Then, after an unsteady start, almost all of
those same measures improved during Bill Clinton's
eight years in the White House.
Now, under the second President Bush, the trend
lines are pointing down again.
The pattern was dramatically underscored last week
when the Census Bureau released its annual reports
on income and poverty in America. Together, these
two studies provide the most comprehensive
snapshot of the economic well-being of American
families. On both fronts, the news was grim--and a
throwback to the economy's performance under the
first President Bush.
From 1989 through 1992, when the elder Bush held
the presidency, the number of Americans in poverty increased by 6.5 million,
according to Census Bureau figures. That was the largest increase in poverty
under any president in the last 40 years.
The new census figures showed that the ranks of the poor increased by an
additional 1.3 million during George W. Bush's first year in office. So, in five
years combined under the Bushes, the number of Americans in poverty has
swelled by 7.8 million.
By contrast, during Clinton's eight years, the number of Americans in poverty
declined by 7.7 million.
The same trends held on the median income, the best measure of how much
money the average family earns. Under the first President Bush, the median
income fell by 4.9%, from nearly $40,000 in 1989 to less than $38,000 in 1992.
Then, during Clinton's two terms, the median income increased 14.5%, to an
all-time high of $43,162. That represented the largest, and most broadly shared,
increase in living standards since the 1960s, according to Census figures.
Now the trend is pointing down again. The Census Bureau reported last week
that in 2001 the median income fell 2.2%, meaning that President Bush has
presided over the first significant decline in income for average families since ...
1991, when his father sat in the big chair.
The pattern doesn't stop there. Consider job growth and unemployment.
In four years, under the first President Bush, the economy created about 2.3
million new jobs. Under the second President Bush, the economy has lost roughly
1.5 million jobs through August, the latest month for which figures are available.
That means the economy has created only 733,000 total jobs in the 68 months
that the Bushes, father and son, have held the White House. That averages out
to 10,779 new jobs per month under the Bushes.
By contrast, under Clinton, the economy created an average of 236,635 jobs per
month--for a total of nearly 23 million new jobs during his eight years.
Unemployment tells a similar story. When Bush's father took office in January
1989, the unemployment rate stood at 5.4%. When he left in January 1993, it had
jumped to 7.3%.
Over Clinton's eight years, the unemployment rate dropped--to the point where it
stood at 4.2% when the younger Bush took the oath in January 2001. That
needle has reversed too. Unemployment now stands at 5.7%.
Or consider the federal government's finances. When President Reagan left
office in 1988, Washington's annual deficit stood at $155 billion.
Under the elder Bush, the deficit steadily grew, peaking in 1992 at $290 billion--
Washington's biggest ever. Under Clinton, the government's fiscal position
improved every year; by 2000, in Clinton's final budget, Washington enjoyed its
largest surplus ever: $236 billion.
Now, under pressure from war, recession and the cost of Bush's tax cut, these
numbers have reversed. In the 2002 fiscal year that ends today, the government
is expected to run a deficit of about $160 billion--the first shortfall since 1997.
Health care has moved in the same direction, if less dramatically. Under the first
Bush, the share of Americans without health insurance jumped from 13.6% to
15%. Under Clinton, the percentage fell to 14.2%, according to revised census
figures released today. But in 2001, under Bush II the share of Americans
lacking health insurance ticked back to 14.6%, with 1.4 million people losing
coverage, the census found.
By now, Bush fans are undoubtedly howling that presidents shouldn't receive all
the blame or credit for economic trends under their watch. That's fair enough.
Economic cycles don't necessarily respect the electoral calendar; the economy
already was improving when the elder Bush left office, and slowing when the
younger Bush arrived. And sometimes the decisions presidents make aren't fully
felt until after they're gone--like the 1990 Bush deficit reduction package that
provided a foundation for Clinton's efforts to eliminate the red ink.
But the choices presidents make matter too. The first Bush chose to stand pat as
the economy stumbled and unemployment rose in his last two years; his son
chose to put all his chips on a huge tax cut that blew a hole in the federal surplus,
may increase upward pressure on long-term interest rates and has severely
crimped his ability to aim targeted initiatives at such problems as the increase in
poverty or the decline in health-care coverage.
Besides, while arguments about blame may be intellectually intriguing, ultimately
they are politically irrelevant. Every president eventually owns his economy. The
buck really does stop in the Oval Office, especially when Americans have fewer
of them in their wallet.
This Bush will benefit for a long time from the judgment among voters that he's
effectively handling national security and the threat of terrorism.
But unless these economic trends reverse direction, sooner or later Bush may
find himself vulnerable to the gibe that Al Gore aimed at his father in 1992:
"Everything that should be going up is going down, and everything that should be
going down is going up." That's one bit of family history Bush would probably
rather not relive.
latimes.com *
Ronald Brownstein's column appears every Monday. See current and past
Brownstein columns on The Times' Web site: www.latimes.com/brownstein. |
