The Truth About Job Creation

With all the talk about relative job growth or losses under Bush and Obama I started wondering what the historical record was. One thing that sparked my curiosity was the record in the first six months of each Presidency. Reagan, Clinton and Bush ’43 all enacted major economic legislation including substantive changes in tax policy in their first year, but none accomplished their legislative goals until summer meaning that their tax policies whatever they were would have barely affected their first six month’s job performance. Based on the impossibility that those tax adjustments could have any effect on the economy I thought might be interesting to view the job creation record of each president starting with their 7^th month, basically charging the first six to the pervious guy, and then following through to the first six months of the following presidency.

For example, in the first six months of the Truman presidency, which began in April 1945 after the death of FDR, the United States shed 2.8 million jobs. According to the Bureau of Labor Statistics, 2.0 million jobs were lost in September ’45 alone. Six days after the bombs were dropped on Hiroshima and Nagasaki Japan surrendered. One month later, In September, 2.0 million were furloughed. However, the economy created 611,000 jobs in the three months that followed and postwar recovery was underway. In total the economy added 8.4 million jobs and the GDP grew 61% during the Truman Presidency.

In a period well before ideological extremism Eisenhower succeeded Truman. In the first six months the economy added just 350,000 jobs and for the full two terms it added just 3.5 million jobs. GDP growth slowed to just 39% for Eisenhower’s two term. After the dynamism of the Post-World War II jobs machine under Truman, the “Eisenhower Economy” merely hummed. Eisenhower, a technocrat more than an ideological force maintained the forward momentum of social programs established under FDR and Truman, had two lackadaisical terms, left the country hungry for younger, more dynamic, leadership and paved the way for Kennedy.

The GDP grew 13% in Kennedy’s three years in office. In the critical first six months of his administration the US economy created 234,000 jobs, a little less than 40,000 a month, but through the balance of his presidency it added about 100,000 per month bringing the country back to the dynamism of the Truman years, pretty much what he was hired to do. Job creation was solid under Kennedy, but not what would be unleashed under Johnson. The Kennedy Tax Cuts, which were relatively aggressive for their time and enacted before protecting the narrowest sliver of the electorate was a Republican obsession were actually approved by Congress in 1964, after his assassination.

Johnson in a little more than one term created almost 12 million jobs. The GDP grew 37% in the same period. Part of this legacy may be the so called 1964 “Kennedy’ Tax Cuts. But with all the pointing back to Reagan and Clinton as guideposts for the future, perhaps the Johnson administration and the Great Society programs enacted under him, not to mention the dynamic forces set free by progressive civil rights legislation are more instructive.

Poverty, in 1964 when Johnson declared a War on Poverty, had declined to 19% from just over 22% at the end of 1959, leaving one in five Americans on the economic fringes. In a burst of bureaucratic creativity and legislative action not seen since the depression, and perhaps never to be seen again, Johnson created the Job Corps, Head Start, the Vista Program which encouraged young people to engage and work in underserved communities, and a host of other programs. Medicare and Medicaid were enacted under revisions to the Social Security Act in 1965.

In addition to 12 million jobs created and 37% GDP growth in a little more than a five year period, the dramatic effect on Poverty was stunning. By 1973 Poverty rates had fallen to 11%. Though the population of the country grew from 1960 to 1970 by 20 million people, by the beginning of 1973, 17 million fewer Americans were living in poverty. Primarily because of Medicare, poverty among the elderly has fallen from 28.5% in 1964 to around 11% today. While it can be argued that the 1964 “Kennedy” tax cuts created a positive economic environment for Johnson’s grand experimentation, the mixed bag of results in succeeding years from Reagan (tax decreases; spectacular job growth), to Clinton (tax increases; spectacular job growth) to Bush (tax decreases; the shittiest economy in 100 years) seem to indicate that other motivations take a part in dynamic job creation.

Whatever tax policies are enacted, the Johnson and Clinton years make a case for policies designed to lift all boats. After nearly two decades of hostility to programs which benefited the poor, under Clinton poverty dropped from about 15% to about 11%. While Republicans point endlessly to the hot-check economy of the Reagan years for job growth, Clintons job growth numbers when taxes were higher are as good, and Johnson’s, especially considering the size of the population at the time, are stunning.

Following is a basic primer of economic statistics for each President since Truman. Take special note of ole Jimmy Carter’s stats. Better per year job and GDP growth than either Reagan or Clinton, and unlike Reagan he did not run up the national debt like a madman. A good way to F*** with your repub freinds I think is to ask them who had higher GDP growth? Carter or the sainted Reagan. Same with job creation per year.

Bush has the worst record since Hoover. He is worse by far in this analysis than any other President. Since the economic calamity came at the very end of his second term he has no one to blame but himself. Obama’s record is not good at all, but the deep hole of the 3.8 million jobs lost in the first six months of his presidency cannot be overstated, especially since these job losses were on the heels of 3.6 million jobs lost in 2008. In the Reagan recession-- which took place after Tax cuts were enacted by the way—2.8 Million jobs were lost in a 17 month period. Even as World War II wound down the losses were not as deep. 3.4 million jobs were lost from March to September of 1945, but in the following 18 months the economy regained more than 5.0 million jobs.

While an argument can be made that since Obama enacted substantive economic legislation in his first months in office the job performance should be all his, I think most reasonabale people can understand the effort to hang the entire mess around his neck is purely partisan. That being said, the following analysis also indicates that leadership matters. While I believe it is wildly unfair to judge the president from the vantage point of these past three years, I would still say that history will judge. When it comes to economic performance Obama has a long way to go. Going back to the point on poverty reductions under Johnson and Clinton and the corresponding growth in GDP and job creation, when was the last time you heard the president say something or suggest improvements in progams which serve the poor?

I am aware that some of the numbers presented are at some variance to articles and information I have seen posted elsewhere. I have for example seem Reagan’s job creation numbers touted as twenty million even though that is not what the BLS says. Job growth refers to Non-Farm employment in BLS nomenclature.

Truman

GDP Growth  61%                     
Average Annual GDP Growth 6.4%
Total Job Growth during Presidential Term 8.4 Mil
Ave Annual Job Growth 970,000

Job Growth Handoff (1^st Six Months Succeeding President) 358,000

Job Growth from Month 7 Of President Term to Month 6 of Following Term 10,953,000
Average Growth Per Month 129,000
Census Year 1940
US Population  142 Mil 
Job Growth as % Of Population 0.09%                       

Eisenhower
GDP Growth  39%                       
Average Annual GDP Growth  4.9%
Total Job Growth during Presidential Term 3.6 Mil
Ave Annual Job Growth 447,000
Job Growth Handoff (1^st Six Months Succeeding President) 234,000
Job Growth from Month 7 Of President Term to Month 6 of Following Term 3,455,000
Average Growth Per Month 36,000
Census Year  1950
US Population 151 Mil 
Job Growth as % Of Population 0.02       

Kennedy

GDP Growth 13%                       
Average Annual GDP Growth 4.3%
Total Job Growth during Presidential Term 3.5 Mil
Ave Annual Job Growth 1,219,000                                                                                                                            
Job Growth Handoff (1^st Six Months Succeeding President)  861,000
Job Growth from Month 7 Of President Term to Month 6 of Following Term 4,112,000
Average Growth Per Month 117,000
Census Year 1960
US Population  179 Mil 
Job Growth as % Of Population 0.07       

Johnson
GDP Growth  37%                       
Average Annual GDP Growth  7.4%
Total Job Growth during Presidential Term  11.9 Mil
Ave Annual Job Growth  2,377,000
Job Growth Handoff (1^st Six Months Succeeding President) 1,391,000
Job Growth from Month 7 Of President Term to Month 6 of Following Term 12,547,000
Average Growth Per Month 246,000
Census Year 1960
US Population  179 Mil 
Job Growth as % Of Population  0.14       

Nixon

GDP Growth  34%                       
Average Annual GDP Growth 5.7%
Total Job Growth during Presidential Term 9.4 Mil
Ave Annual Job Growth  1,682,000
Job Growth Handoff (1^st Six Months Succeeding President)   Minus 1,337,000
Job Growth from Month 7 Of President Term to Month 6 of Following Term 6,661,000
Average Growth Per Month  99,418
Census Year 1970
US Population 203 Mil 
Job Growth as % Of Population 0.05       

Carter

GDP Growth 37%                       

Average Annual GDP Growth  9.3%

Total Job Growth during Presidential Term  10.5 Mil
Ave Annual Job Growth 2,622,000
Job Growth Handoff (1^st Six Months Succeeding President)  546,000
Job Growth from Month 7 Of President Term to Month 6 of Following Term 8,994,000
Average Growth Per Month 187,375
Census Year 1980
US Population     226 Mil 
Job Growth as % Of Population   0.08       

Reagan

GDP Growth   63%                       
Average Annual GDP Growth  7.9%
Total Job Growth during Presidential Term 15.9 Mil
Ave Annual Job Growth   1,992,000
Job Growth Handoff (1^st Six Months Succeeding President) 1,120,000
Job Growth from Month 7 Of President Term to Month 6 of Following Term  16,509,000
Average Growth Per Month 171,969
Census Year 1980
US Population 226 Mil 
Job Growth as % Of Population 0.08       

Bush 41

GDP Growth 16%                       
Average Annual GDP Growth  4.0%
Total Job Growth during Presidential Term  2.5 Mil
Ave Annual Job Growth  636,000
Job Growth Handoff (1^st Six Months Succeeding President) 1,248,000
Job Growth from Month 7 Of President Term to Month 6 of Following Term 2,673,000
Average Growth Per Month 55,688
Census Year 1990
US Population 249 Mil 
Job Growth as % Of Population  0.02       

Clinton

GDP Growth 49%                       

Average Annual GDP Growth  6.1%
Total Job Growth during Presidential Term 23.1 Mil

Ave Annual Job Growth 2,883,000                                                                                                    

Job Growth Handoff (1^st Six Months Succeeding President) Minus 434,000

Job Growth from Month 7 Of President Term to Month 6 of Following Term 21,383,000
Average Growth Per Month   223,000                                                                                                   
Census Year  1990
US Population 249 Mil
Job Growth as % Of Population 0.09%                                                                                               

Bush 43

GDP Growth  16%      
Average Annual GDP Growth 2%
Total Job Growth during Presidential Term 2.1 Mil
Ave Annual Job Growth  43,750
Job Growth Handoff (1^st Six Months Succeeding President) Minus 3,876,000
Job Growth from Month 7 Of President Term to Month 6 of Following Term Minus 1,544,000
Average Growth Per Month Minus 16,083
Census Year  2000
US Population 281 Mil 
Job Growth as % Of Population Minus 0.01

Obama 

GDP Growth    8.3%                       

Average Annual GDP Growth 2.8%
Total Job Growth during Presidential Term Minus 1.4 Mil
Ave Annual Job Growth  Minus 427,692
Job Growth Handoff (1^st Six Months Succeeding President)                                        
Job Growth from Month 7 Of President Term to Month 6 of Following Term 2,486,000
Average Growth Per Month  73,118
Census Year 2010
US Population 308 Mil 
Job Growth as % Of Population Minus 0.02