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History Reveals a Pattern as DPC Hearings Look For Best Job Creation Ideas

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The Obama Administration inherited the worst economic crisis since the Great Depression. That crisis has been described as the "Great Recession."

Over the past year, we've made some good progress in digging out from under that mess. We prevented complete economic collapse, and indicators suggest that the economy is now on the mend.

Employment - jobs - remains a serious problem. Historically job creation has always been one of the last areas to recover, and that's the case with this recession, too. We are determined to focus on this area to get Americans back to work as soon as possible.

The recession may be waning, but talk of economic recovery is small comfort to Americans who have lost their jobs. Our country's unemployment rate now exceeds 10 percent. For every American who is out of a job, the unemployment rate feels more like 100 percent.

The Senate faces no question more important than how to get Americans back to work.

Senate Majority Leader Harry Reid (D-NV) asked Assistant Senate Majority Leader Dick Durbin (D-IL) and I lead an effort to develop legislation to create jobs as soon as possible. As part of that effort, I'm conducting a series of Democratic Policy Committee hearings to hear a broad range of ideas about what ought to be in that bill and to review what's worked in the past and what hasn't.

I certainly don't believe that any one party has all the right answers and the other party has none. I'm interested in taking a broad look around and getting the best ideas regardless of the source. I also want to make sure that we are challenging and really thinking through the job creation ideas we select.

It is important to look at the record. What's worked in the past? What hasn't?

Historically, the data suggests that Democratic policies have worked best to put people back to work and strengthen the economy. That's the record.

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Here are three simple charts that illustrate this.

This first chart shows the record of job growth of every administration from Herbert Hoover to George W. Bush.

As you can see, only the Hoover administration had a net loss of jobs. Every other administration had at least some net job growth.

However, there is a distinct trend here: every Democratic administration - shown in blue on this chart - has had a better rate of job growth than every Republican administration - shown in red. If you look at this as a series of peaks and valleys, you see that the peaks are blue, and the valleys are red.

The odds of this job growth pattern happening due to random chance is 1,700 to one.

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The next chart shows the rate of economic growth from the Truman to the George W. Bush Administration. This is the growth in the average annualized real GDP. And again, as you can see, there is a distinctive pattern: the greatest economic growth has come in the five Democratic Administrations.

Your browser may not support display of this image. Finally, here's a chart that shows the performance of the stock market over the years. From FDR through the current administration, the average growth in the S&P index has been 9.4% in Democratic administrations, and 4.3% in Republican administrations. And that does not include the Hoover administration, which would have essentially driven the stock market growth rate for Republican administrations to zero.

There is a pattern that has emerged over the years. In considering various job creation policy options, I think we want to take the historical record into account.

Senate Majority Leader Harry Reid has said the Senate will turn to the jobs bill Senator Durbin and I develop when it concludes its consideration of health insurance reform.

Getting Americans back to work is an urgent job. The hearings we're conducting at the DPC, which are taking a broad look at job creation ideas, are helping to ensure that when the Senate considers a jobs bill the ideas it contains have been carefully considered and even challenged.

We want a jobs bill that not only works, but that puts millions of Americans back to work as soon as possible. Thinking "outside the box" will help make that happen.