George Bush As Herbert Hoover? Oh Come On!

The ad says Bush has lost 2 million jobs ‘so far,’ implying that more losses are coming. In fact, the economy has been gaining jobs since July, when the total decline in jobs since Bush took office hit nearly 2.6 million. That figure has now declined to 2.3 million and is predicted to keep shrinking in months to come.The ad’s central claim – that Bush will finish his term with the economy employing fewer people than when he took office – probably will turn out to be correct – but barely. Private economists are projecting that the economy will continue to gain jobs over the next year, according to Blue Chip Economic Indicators, a survey of private economic forecasters. The average forecast is for a gain of 146,000 jobs per month, which would leave Bush at the end of his term with an economy employing nearly 400,000 fewer workers than when he took office. On the other hand, the most optimistic private economists see the economy gaining enough jobs between now and the end of Bush’s term to leave him with a gain. Ten of the 51 surveyed predicted an average gain of 213,000 jobs per month over the next year, which if continued through January 2004 would leave Bush more than half a million jobs to the good. That remains a minority view, however.

Whether Bush gains or loses jobs during his tenure, the fact is that unemployment has been – compared to past downturns –  relatively mild. In fact, the economy lost a smaller percentage of jobs in the Bush downturn than in seven of the ten previous downturns going back to 1945 when the federal government  began keeping the statistics on total non-farm employment. (see table)

And Bush’s unemployment rate, even at its worst level of 6.4% in June, was much lower than the previous four spikes in the jobless rate: 9% in the Ford administration (May, 1975), 7.8% in the Carter administration (July, 1980), 10.8% in Ronald Reagan’s first term (November and December of 1982) and 7.8% in the administration of Bush’s father (June, 1992).

Economists are virtually unanimous in saying that the tax cuts that have taken effect so far have created jobs. Federal Reserve Chairman Alan Greenspan, for example, said in a recent speech: “Economic activity perked up in late spring and then accelerated further this summer as tax cuts provided a substantial boost to the disposable incomes of households.” And when the Blue Chip asked economists why they had failed to predict the size of 126,000-job gain in October, the reason they gave more than any other was underestimating that consumers would spend such a large proportion of “additional after-tax income resulting from tax cuts.”

Comparing the Bush economy to Hoover’s Great Depression is just silly, and implying that tax cuts are not contributing to job growth deserves an “F” in Freshman economics.