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United States News Title: President Bush Is Crushing Obama On Post Recession Performance Experts Say the Great Recession Ended In Mid 2009....approximately 12 months ago. The jury is out but the President and his Treasury Secretary continue to tell us the economy is on the mend and the recession is over. Is it? There has been much debate recently comparing the effectiveness of the tax and spend policies of the Obama Administration to those of George W. Bush who focused on old fashioned supply side tax cutting to get the country out of the recession that began in November of 2001 and ended in July of 2003 according to the NBER. The NBER hasn't given its official blessing yet on picking the end date of the recent "Great One" but most pundits suggest that it ended mid 2009...this is of course applauded by the President and Mr. Geithner for obvious political reasons. If that is the case then it should be a worthwhile exercise to do an an apples to apples comparison of how the economy performed 12 months after the recessions end for each President...so lets do that and look at the economic data points for the respective Bush/Obama 12 month periods following each recession's end and compare the effectiveness of both President's stimulus policy strategies. Lets start with President Bush's record 12 months post the recession ended in July of 2003. In a note to clients around that time (June 17/2004 to be precise), I wrote.."...we have been getting more good news on the booming US economy"...some of the economic data points that I referenced at the time included: * initial jobless claims dropped 15k to 343k. * capacity utilization rose to 77.8% * industrial production rose 1.1% in May (strongest in 6 years) * factory production rose 6.4%, the biggest increase since April 2000 * housing starts strong at an annual rate of 2.12 million which surpasses previous years 1.85million, the most in 25 years. As well I wrote that on June 16th Richmond Federal Reserve Chairman Alfred Broadus indicated "inflation is under good control". At the same time there was much debate about the potential for aggressive Fed tightening to tackle strong economic growth catalyzed by aggressive fiscal policy in the form of tax cuts to pre-empt an inflation surge. The good news on the economy in the 12 month period following the recessions trough in mid 2003 didn't end there. I noted that: "consumers are spending at a 9% pace; companies are investing at a 9.5% rate on new equipment; manufacturing industries are producing at a 6.5% rate; technology companies are expanding at a 30% rate. As well, 1.4million new jobs were created (ed note not saved) in the previous 9 months, personal incomes up 5.7% over the previous 12 months, wage and salary growth up 4.8% and after tax disposable incomes up 4.3%". President Bush's aggressive tax cuts for individuals and corporations led to a rebound in GDP growth to 3.8% for the full year 2004 following the recession and stocks were up over 10%. Also...politically...President Bush's approval rating hovered around 50% for most of the year. Now, fast forward to 2010. We have a complete tly different picture 12 months following the end of the most recent recession. In fact...the policies implemented by the current administration have produced quite a different, more negative economic environment that Fed Chairman Bernanke describes as one with "unusual uncertainty". The failure of these stimulus policies have led many to fear the dreaded 'double dip". So lets look at President Obama's record one year post recession end: * Consumer confidence remains low * Stocks are hugging the flat line year to date * The housing market remains in the doldrums not responding to record gobs of stimulus money * Consumer spending and incomes are stagnating according to data released this AM * Bernanke is quoted as saying today that the economy is still short of full recovery * Treasury Secretary Geithner is saying today that unemployment will get worse before it gets better. * GDP growth slowed in the 2nd qtr to 2.4% from 3.7% in 1st qtr. * Growth in the manufacturing sector is moderating * Unemployment remains stubbornly high bordering on double digits at 9.5% * Jobless claims continue to average over 450k * Friday's jobs report is expected to show a second month of net job losses * The Fed may be getting desperate as the rumors of QE Part Deux escalate * Impression that the Fed is "pushing on a string" have surfaced * Flattening yield curve * Rising Deficits and Debt are a growing concern with increased entitlement spending * Confusion about impact of Fin reg and New Health Care legislation leading to "unusual uncertainty" which has catalyzed record levels of corporate cash sidelined * The dreaded double "D's" Deflation and Deleveraging are on the radar! * Capacity Utilization remains below 75% * President Obama's approval rating currently at low point of 41% according to latest Gallup poll Now, to be fair, President Obama did come into office at a stressful economic time after the real estate bust...but again, to be fair President Bush also inherited a looser economy following the Dotcom bust where trillions of dollars of wealth had also been wiped out. And then of course there was the uncertainty caused by the September 11th terrorist attacks. It is difficult to quantify the economic effect but suffice to say the initial negative impact on consumer confidence and investor sentiment was pronounced and the fiscal impact has continued to ripple through increased government spending on defense and homeland security to this day. What is important is the policy response from both Presidents and their success, or lack of it in putting the economy back on track...Bush responded with pro growth fiscal policy vs Obama's Keynesian approach....each quite different and so far 12 months following the end of the last recession the data suggests that President Bush's tax cutting policies were more effective then President Obama's big government tax/spend/re-regulate approach. The data doesn't lie. More importantly, just as the Bush tax cuts are about to expire, the Obama administration should reconsider their strategy of letting them sunset...and end the uncertainty and harm that this debate is having on the economy. Then, when the economy gets back on track and starts growing again.. we can revisit the concept of class tax warfare when everyone is flush and begin the vicious cycle all over again.
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#1. To: no gnu taxes (#0)
The employment to population ratio peaked in April 2001 and has never recovered that level.
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