THE BLOG
09/29/2011 02:43 pm ET Updated Nov 29, 2011

Republican Proposals for Job "Growth" Won't Work -- and Here's the Proof

There they go again, Republicans will shout -- more Bush bashing. No, this discussion of job creation under our former president is not an attempt to blame him for our current dilemma, at least not all of it. Nor am I trying to rescue him from the ballgame-attending semi-obscurity to which he has been deservedly returned. Neither is it an effort to excuse the pitiful performance of job growth to date during the anemic economic "recovery" under President Obama. However, it is an attempt to remind everyone that our country conducted a near-perfect eight-year laboratory experiment in precisely the policies that today's Republican leadership in Congress -- and the party's pygmy tribe of presidential candidates -- espouse as exactly what will lift the country out of its present employment miasma.

And what were the results of this experiment? Because of consistent Republican mendacity on this subject, with references to "how many Americans have lost their jobs since Obama was elected," or -- only slightly more honestly -- "How many Americans have lost their jobs since Obama's inauguration," the facts (mortal enemies of most Republicans) have become completely lost. So I thought it might be helpful if the actual data regarding employment, particularly in the private sector, under Pres. Bush and subsequently under Pres. Obama, were made known.

Key to this analysis is the imposition of a standard lag factor for each President, as the economic performance of the country surely doesn't reflect the policies and views of a new President from the day he assumes office. In both cases, I have used an eight-month lag, making September 30th of each President's inaugural year the moment when the results become his responsibility. Prior to that, they fall to his predecessor. In this way, additions or losses of jobs from Jan. 20 to Sept. 30, 2001 properly belong to Mr. Clinton; while those from Jan. 20 to Sept. 30, 2009 fall into Mr. Bush's column.

Under these strictures, here is how the data shake out:

President George W. Bush 9/30/01 9/30/09 Change

Private Sector Employment 110.8 million 107.8 million -3.0 million

Public Sector Employment 21.1 22.3 +1.2

Total Employment 131.9 million 130.1 million -1.8 million

President Barack Obama 9/30/09 8/31/11 Change

Private Sector Employment 107.8 million 110.1 million +2.3 million

Public Sector Employment 22.3 20.8 -1.5

Total Employment 130.1 million 130.9 million +0.8 million

Source: Bureau of Labor Statistics, Employment, Hours, and Earnings from the Current Employment Statistics survey (National)

While of course the Obama record is nothing to brag about, it is the Bush record that is unique -- he is the only eight-year U.S. president to preside over net job losses (with Herbert Hoover the only one to do so for four years.) But what is most striking, in light of present-day Republican rhetoric, is the George Bush record on private sector employment. What is it that will spur job growth, per the broken records from Messrs. Boehner, McConnell, Cantor and Ryan? Why it's lower tax rates on "job creators," a far less heavy hand of government regulation and the elimination of that old right-wing bugaboo "uncertainty." These tired slogans also constitute nearly the entire "jobs program" of most Republican presidential candidates as well.

The results from that eight-year experiment are utterly conclusive. Under eight years of Bush, tax rates for upper-income earners, on capital gains and on dividends plummeted. Government regulation became either non-existent or downright pro-industry. And the only certainty was that the Federal government was in the bag for corporate and moneyed interests. The result? A net loss of 3.0 million private sector jobs over an eight-year span. (There is small but amusing irony in the fact that this anti-government President presided over a 7% gain in public-sector employment.)

But it is not the net loss of those 3 million private sector jobs under Bush that it is so disturbing. It is the composition of the job losses that speaks so loudly to the crisis of America's middle class. While we are all overly inured to hearing about the collapse of manufacturing in the US, its true dimensions are still not widely understood. In September, 2001, at the beginning of the Bush era and before his various tax and social policies were implemented, America had 16.2 million manufacturing jobs. By September 2009, when we can no longer fairly ascribe the economic ups and downs to Mr. Bush, that figure had fallen 28% to 11.7 million manufacturing jobs. For more than one-quarter of America's manufacturing employment to disappear in just eight years is simply stunning.

So which sectors of employment took up some of this slack? Unsurprisingly, it is low-wage, non-union jobs, ones that are almost certain to lack pension plans and likely to have limited healthcare benefits. "Health Care and Social Assistance" has risen 22% in that same eight-year period, from 13.2 million to 16.1 million jobs. "Accommodations and Food Service" (another sector marked by all of the negative employment aspects delineated above) saw its jobs total rise 8%, from 10.4 million workers to 11.3 million, in an otherwise declining labor market.

Turning to the 23 months since President Obama took office, the woes of the employment sector have received the constant attention that they somehow escaped under President Bush. The overall picture may be dismal, but there are some slightly less gloomy spots. Reversing the Bush pattern, in Obama's nearly two years, private sector jobs have risen 2.3 million, while public sector employment has actually fallen by 1.5 million. This has produced the minuscule net gain of 800,000 total jobs under Obama. However, total US manufacturing jobs have risen by 200,000. Is this statistically significant? No. But that it has risen at all rather than fallen is of some modest significance.

The ongoing debate on "job creation" obscures the fact that government has limited tools with which to actually create jobs--except by doing the kinds of things that are anathema to most Republicans. But nearly all Republicans devoutly believe (yes, Faith is a critical part of such belief) that classic broad tax and regulatory policies favoring accumulated wealth and untrammeled corporate power can provide the environment in which innovation and economic growth will almost organically occur.

So how do they explain the years 2001-9? Can they simply ignore eight years of inarguable job-loss data from the reign of George W. Bush, when fiscal and monetary policy was also at full throttle? The simple answer is they can -- especially when no one on the Democratic side is posing the question in a direct and compelling way.

But this set of data proves that the tired, tiresome and dangerous collection of Republican shibboleths concerning job creation is simply a pack of bald-faced lies. Of course it would help if President Obama and the Congressional Democrats were doing an even half-way effective job of pointing out the self-evident fallacies behind those right-wing nostrums -- and then forcefully presenting this sort of simple evidence that shoots them down.

P.S. There is still more dramatic counter evidence to Republican claims as to what types of tax and regulatory policies produce job growth: the Clinton years. Of course there were some positive factors at play in the 1990's that proved evanescent, and we face a variety of global problems today that were far less burdensome 20 years ago. But that hardly makes this stunning set of employment statistics irrelevant:

President Bill Clinton 9/30/93 9/30/01 Change

Private Sector Employment 93.0 million 110.8 million +17.8 million

Public Sector Employment 18.8 21.1 + 2.3

Total Employment 111.8 million 131.9 million +20.1 million

No one is suggesting that raising marginal tax rates on very high earners and bringing capital gains and dividend tax rates closer to those paid by wage earners will, in and of itself, produce job growth. But what the Clinton record shows is that, right-wing ideologues loudly to the contrary, they do not inhibit job growth, while clearly helping to reduce the deficit that these selfsame ideologues claim to care about. (I won't mention issues of fairness, as they make no such claims there.)

Two not-so-minor addenda: Over Clinton's two terms, manufacturing jobs in America also fell, but from 16.9 million to 16.2 million, a 4% decline -- not the calamitous 28% drop experienced under President Bush. And as for that seemingly robust growth in public sector employment, it was entirely at the State and Local levels, where total workers increased by a fairly staggering 17%. At the Federal level, Al Gore appears to have really "re-invented government," as total civilian employees fell 9.4% from 1993 to 2001.