“The ideas that [Republicans are] putting forward have been tried. We tried them between 2000 and 2008, and it resulted in the most sluggish job growth that we’ve ever seen, resulted in all kinds of phony financial profits and debt, and resulted in the worst financial crisis and economic crisis we’ve seen since the 1930s.”
— President Obama during a campaign event in New York City, May 14, 2012
President Obama campaigned in New York City earlier this week, trying during a reception at an art museum to convince wealthy donors that he’s done the best he can to repair the broken economy he inherited. His message included a warning that voters shouldn’t trust the ideas Republicans have pushed during this election cycle.
It’s hard to argue that certain regulatory policies from the George W. Bush and Bill Clinton eras didn’t pave the way for the financial crisis and the severe recession that kicked in just before Barack Obama entered the White House. But deciding who deserves the most blame for today’s slow economic growth is up for debate.
We’ll set aside the issue of what caused the downturn — that argument could last forever — and focus instead on the president’s bold claim that the policies implemented between 2000 and 2008 “resulted in the most sluggish job growth that we’ve ever seen.” Let’s take a look at the data to find out who has the worst record, even though we’ve said many times that no one person in power controls all the economic levers.
There’s no perfectly objective way of looking at employment numbers in this case, since people disagree about when to begin blaming Obama for the lackluster job growth of recent years and when to stop faulting Bush. Then there’s the question of when to start the clock on Bush, since he inherited a bit of a recession himself.
We sliced the numbers at least a half dozen ways and realized that Obama and Bush could both win the award for worst jobs record, depending on what timetable we used. Here’s a sampling of the various results we came up with:
Obama worse than Bush
Bush’s entire tenure: +11,400 jobs per month
Obama’s entire tenure: -14,300 jobs per month
Bush worse than Obama
Obama’s tenure minus Great Recession: +71,000 jobs per month
Bush’s tenure plus Great Recession: -19,200 jobs per month
Bush’s best scenario
Starting after the “Bush tax cuts” that Obama criticized
June 2003 through end of tenure: +55,500 jobs per month
Obama’s best scenario
Counting only the period of steady job growth
March 2010 through April 2012: +136,000 jobs per month
As you can see, neither president has a great track record, but neither of them has a clear advantage over the other. Let’s look at the methods we used in our analysis.
To start, we compared the first and last month of each president’s tenure, relying on data for total nonfarm employment from the Bureau of Labor Statistics, which has tracked these numbers back to 1939. Bush averaged +11,406 jobs per month during his tenure, while Obama averaged -14,300 through April 2012.
In this regard, Bush’s numbers are better than Obama’s. But they’re puny compared to those of his predecessors, who mostly averaged at least 92,000 jobs per month.
In fairness, Obama’s first term hasn’t ended yet, so there’s still time for him to reach positive territory. Furthermore, it may not be fair to start the clock during Obama’s first month in office, since his policies had little or no time to have an impact on the tumbling economy at that point.
The president’s numbers improved considerably when we started counting his jobs beginning at the end of the recession in June 2009. Bush’s numbers obviously went down when we added that extra time to his column. The final score: Obama +71,000 per month, Bush -19,000.
As for those best-case scenarios, we noticed that Bush’s better years included a stretch of unbroken job growth that lasted more than three years after he signed the last of his big tax cuts in late May of 2003. We counted from that point to the end of his second term.
For Obama, his employment numbers have been almost entirely positive since March 2010. This constitutes his best period, despite three months of losses from July through September of 2010.
We’re not sure why the president mentioned the year 2000, since that was the end of a Democrat’s term in the White House. But if you include that year, the average job growth for Clinton-Bush was +25,740 per month, which is still better than the current administration’s record.
All these raw jobs numbers mean little outside the context of unemployment rates. After all, job growth has to keep pace with the expanding adult population in order for the gains to be sufficient. Think of it this way: Adding 1 million jobs would have had a far greater impact in 1902 than it would in 2012, because the workforce was smaller back in the day.
With that in mind, we looked at unemployment rates and found that Obama’s numbers are still worse than those of his predecessor. Bush’s average monthly unemployment rate was 5.2 percent, compared to 9.2 percent for the current president.
Let’s see what happens when we credit Bush with the entire period of the Great Recession, which ended in June 2009. He still fares better, averaging an unemployment rate of 5.4 percent, compared to Obama’s 9.3 percent after the economic downturn.
The only way the president’s claims make sense in the context of unemployment data is if he points to the numbers during his own term and blames them all on the policies implemented during previous administrations.
This logic is reasonable to a certain extent, considering the depth of the recession Obama inherited. But the president can’t shirk all responsibility for employment rates just because he started with a raw deal. After all, one could argue that the recovery should have begun sooner or that it ought to be stronger by now.
Obama’s campaign defended the president’s statement with a set of numbers we haven’t discussed yet: the data for private-sector job growth. As we mentioned in a previous column, this has become a favorite trick of the administration, because it ignores public-sector losses that have occurred since the economic-stimulus money ran out.
In terms of private-sector employment during each president’s tenure, Obama has averaged +875 new jobs per month, while Bush averaged -6,700. These are easily the worst two records since Franklin D. Roosevelt was president. Here’s the breakdown we were provided by the Obama campaign:
The Obama campaign had this to say about our analysis: “When the President came into office, we were losing seven hundred and fifty thousand jobs a month and on the brink of another Depression. But over the past twenty-six months, we’ve seen job growth in the private sector and over the last thirty-four months, the economy has added over three million private sector jobs. The President continues to fight every day to build an economy where hard work pays off and responsibility is rewarded.”
For those interested in even more data and comparisons, the Wall Street Journal created a nifty table in January 2009 comparing job creation for all presidents from George W. Bush back to Harry Truman.
You’ll notice that our numbers are a bit different from those in the chart. That’s because we account for Bush’s last month in office, for which data wasn’t available when the Journal produced its table. We also averaged the difference between the first and last months of each administration instead of counting gains and losses for every single month and then dividing. Regardless, the results are very similar, and they reach the same general conclusions.
The Pinocchio Test
There’s no doubt that Bush owns an unimpressive record on job creation. But Obama comes in either last, second-to-last or in the bottom half among presidents since the Great Depression, depending on which way you look at the numbers.
The president said that policies from 2000 through 2008 produced the “most sluggish job growth we’ve ever seen.” Perhaps so, but the worst numbers on record occurred under his watch.
Obama chose a poor metric for measuring past administrations. To make his point with jobs data, he has to point to his own numbers and completely disavow much of them, or else ignore public-sector losses. We came close to thinking this was worth Three Pinocchios, but ultimately decided he was not necessarily including his record in the statement. Still, it’s a very fine line. The president should be much more careful about making such a sweeping claim.
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