Most of us in private sector business management are familiar with this little gem of wisdom:
Effective management requires effective measurement.
In other words, to guide a business entity effectively into the future, managers need objective measures that explain past and present results. Objective appraisal of the past requires objective measures of the past. Unsurprisingly, that’s not only true in the business world, it’s also true when we try to draw inferences about past presidents' and administrations' effects on our nation's economic growth.
But it’s difficult to sustain a cool objectivity when we assess past presidents, isn’t it? Each of us has a favorite or two, and that makes it tempting to begin our thought process with the conclusion (“president X was the greatest...”), then go find the “objective” statistics that “prove” our point. Or we can do the converse: pick a president we dislike—usually because we favor a different ideology—then cherry-pick the economic stats to illustrate what a worthless jerk that guy was. [By the way, the thought process I’m describing has a name: Confirmation Bias. It’s human nature, we’re all guilty of it, it’s impossible to eradicate, but it’s important to at least be conscious of it.]
So, whether you’re a Bush-hater, a Liberal-baiter, or none-of-the-above, I’m going to arm you with some economic statistics that will enable you to steer your discussions about past presidents toward objectivity. (Or, should you choose to go over to the dark side, they’ll enable you to cherry-pick “just the right stats” to back up your point, thereby proving your ideological opponents to be the incompetents you always said they were.)
First I’ll explain why I chose growth stats from the BEA’s website. My schtick in the blogosphere is economic growth. The reason: It gets far too little attention in the media—in spite of its overwhelming importance. (Why? Is it politically incorrect to talk of “growth”? Do journalists think it’s something that just happens, something osmotic that we can’t do anything about? Do they ignore it because they think redistributing existing wealth should be higher on the agenda than creating new, incremental wealth? I don’t know, and I frankly don’t care; in MY blog, the primary topic will be economic growth.)
In any case, the Bureau of Economic Analysis does a terrific job compiling statistics about the state of our nation’s economy; their website is a goldmine. Based on my experience, the two best statistics for tracking our growth progress are real GDP (Gross Domestic Product) and real DPI (Disposable Personal Income).
The following graphic charts ten presidents’ worth of economic growth, explains why I zeroed in on the two statistics shown, and shows the two choices we have for attributing a timeframe of economic results to any given presidential administration. (Note: There are ten presidents, but only eight “administrations” in my analysis; 8 years of JFK/LBJ, and 8 years of Nixon/Ford account for the difference.)
Click to enlarge.
The next chart ranks the administrations highest-to-lowest, and assumes that a one-year lag is best for attributing economic results to presidents. Read from them what you want; these are the objective results.
Click to enlarge.
If you think any given president was responsible for the economic results that happened “on his watch,” starting with the year he was inaugurated, then you might want to give the following “Zero-lag” chart more weight (...I don’t, but you might, so here it is) . . .
Click to enlarge.
Lastly, here’s a full table of various real-growth statistics. Use it to keep your discussions objective, please. (If you’re one of the dark-side cherrypickers, don’t be surprised if this chart is used against you, to place your argument in a different context than you had intended.)
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