* economic myopia in the electorate
Topics: Campaign2008
26 Jun 2008
From: Ervan Darnell
>Nine percent of respondents said the country's economic condition had improved since Bush became president, compared with 75% who said conditions had worsened.
[4]
91% of the country is wrong, and sadly many of them will be voting based on their folly, voting to make things worse because their comparison point is wrong.
Here's the reality check:
2001 GDP Q1: 9.8T (in 2000 $, seasonally adjusted)
2008 GDP Q1: 11.7T (in 2000 $) [0]
population growth: 0.883% [1] or 6% in 7 years. 11.7 * .94 = 10.9 Thus, we are on average 11% better off than when Bush took office.
Here's another source showing real per capita GDP growth:
2001 36,111 ( in 2002 $)
2006 39,682 (in 2002 $) [2]
2006 was the latest year for this data, but the economy has not been in recession since then: 2008 Q1 GDP : 0.6% in real $ [3]
The blame game is a broken one in several ways:
1) Whether the economy goes up or down in the short run is not exactly the government's fault, but rather how much it goes up or down compared to what it would have been. In particular, the economy looks bad now for reasons not related to Bush's policies (in any obvious way). His policies have hurt it on top of that, but measuring them by the current down tick is to miss the point.
2) People blame the President. Democrats are ecstatic about the current gloomy news just before the election. But if you want to play that game, the Dow has come down and oil prices shot up only after the Democrats took control of the House (which originates spending bills after all). Does that mean House Democrats are responsible for the current not-quite recession? Not really (in the long run their philosophy is responsible, but not the current set nor their recent policies). Why does the President get all of the blame? Probably another version of the same myopia that only looks at last few months instead of the last few years, it's easier to look at one person than several.
3) To say "Bush has hurt the economy" (as the rest of the article says) begs the question of "compared to what?" Compared to libertarian policies? Of course, but I don't think that's what people meant. Compared to Democratic policies over the same term? Probably not, but the relevant point is just looking at the absolute growth rate (which people get wrong anyway) doesn't answer the question of how the policies would have played out under the other party's control. The mortgage crisis in particular was something that ripened in its own season, no matter who was in control. The right question is would our GDP growth be 0.5% or 1.5% this year had Kerry rather than Bush been President this term, not "Is a declining GDP growth rate proof that the Dems are better than Bush".
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[0] http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=6&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Qtr&FirstYear 01&LastYear 08&3Place=N&Update=Update&JavaBox=no#Mid
[1] https://www.cia.gov/library/publications/the-world-factbook/print/us.html
[2] ftp://ftp.bls.gov/pub/special.requests/ForeignLabor/flsgdp.txt
[3] http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
[4] http://www.latimes.com/business/la-fi-poll26-2008jun26,0,7304218.story
====================================================
Ervan Darnell
ervan@kelvinist.com http://www.kelvinist.com
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