Gallup Poll presidential approval ratings are very closely linked to economic conditions during a U.S. president’s term in office – with the notable exceptions of Richard Nixon and Lyndon B. Johnson.
Since the economy is nearly always a top election issue, as it has and will be during Hillary Clinton vs. Donald Trump, do you believe you can distinguish one president (or party) from another based solely on economic data from different periods?
The data in the chart shows some commonly used economic metrics for the terms of the past 10 presidents (1961-2016). See if you can rank them – 1 though 10 – based on actual economic performance and not on their charisma, involvement in wars, personal shenanigans or party affiliation.
Be forewarned, the data in the table are not in chronological order! (The answers are listed upside down below the chart.)
Clearly much has happened since John F. Kennedy. Health expenses as a percent of GDP have risen from 5 percent to 20 percent, and defense spending has fallen from 50 percent of the federal budget to 15 percent.
Meanwhile, entitlements such as Medicaid and Medicare have surged to 65 percent of total appropriations. Entitlement spending now equals 27 percent of U.S. wages, just as the number of retirees is set to double.
The goods-producing sector has declined by half, as has union strength. Real weekly earnings have been stagnant since Nixon. CEO compensation is now 400 times that of a line worker, while price-adjusted household income has fallen more than 5 percent since George W. Bush held the reins to the economy.
All employment growth has been in the service sector, and many of those jobs are low-paying positions. Furthermore, all income gains since Ronald Reagan have been concentrated in the top 10 percent of employees (who now account for 50 percent of total income and 66 percent of taxes paid).
In order to simply cope, many middle-class households have gone deeply into debt, just as the federal government doubled its own IOUs since Barack Obama’s term began.
The developed counties – not just the US – are all suffering from a severe debt hangover. The human inability to delay consumption, driving debt up and savings down, has both slowed overall growth and ironically helped contribute to the increase in wealth at the top of the income pyramid. The bottom 90 percent of households is simply borrowing from the top 10 percent.
While you shouldn’t blame any particular president, Congress or political party for our economic malaise, perhaps your own presidential economic “ranking” will help illustrate the fact that presidents are a product of their times – albeit on a downhill trend with regard to growth, debt and inequality.
I pose two questions: 1) Who were your top picks; and 2) Is it possible to go back in time?
Bruce Finnie of Graham is a consulting economist and holds emeritus status at Pacific Lutheran University.