The problem with economic debates is that they almost always occur before anybody really knows anything. Case in point: Last fall, the nation was engaged in an intense discussion about President Bush’s economic performance. The press was reporting something they called a “summer slump,” and John Kerry was saying that George W. Bush would be the first president since Herbert Hoover to have a net loss of jobs during his term. But with the economic data all in for 2004, the summer slump and the Hoover claim can be thrown out with the election-year trash.
For the July-through-September period last year, the economy grew at a rapid 4 percent rate. As for employment, it turns out to be empirically and irrefutably false that the president lost jobs during his first four years in office, as Hoover did, and empirically and irrefutably true that Bush’s election-year jobs-growth rate was one of the highest on record.
In 2004, the American economy produced 2.2 million jobs, which is the highest rate of job creation since the top of the bubble in 1999. BuzzCharts believes this is a far-better jobs performance than the one Clinton can claim for the end of his second term. Why? The Bush jobs growth occurred without the characteristics of a jobs bubble. In 1999 and 2000, jobs growth corresponded with slowing — and even shrinking — corporate profits. For the most part those new jobs were being compensated out of investment capital, that was being spent down, as opposed to new profits.
Economists can debate about the president’s performance over a four-year period. Do we use the 114,000 net jobs created (after benchmark revisions) on corporate payrolls as the measure? Or do we use the Labor Department’s broader household survey, which includes the self-employed and shows job growth of 2.4 million over four years? BuzzCharts believes the broader survey is the better indicator. We also believe that in evaluating the president’s supply-side economic policies, it should be taken into account that he had the misfortune of being elected near the beginning of an inherited recession and that his entire tax cut was not implemented until after the midpoint of his first term. The next four years will decisively determine whether the Bush Boom is the real deal.