Presidential GDP Dance Off: Clinton vs. Trump
We follow up on the “Reagan vs. Trump” head-to-head battle of GDP numbers with Trump vs. Clinton. Once again, the ref stopped the fight.
We follow up on the Reagan vs. Trump GDP comparison with a look at the booming 1990s of Clinton and how those years look vs. the Trump story line.
Clinton can boast the envious history of being a rare two-term President who did not face a recession or a quarter of economic contraction.
Exceptional equity and credit markets characterized the Clinton years with median GDP growth more than a point higher than Trump (in GDP land, 1 point average over 8 years is a lot of dollars).
Clinton posted 10 quarters above 5% and Trump posted zero while Clinton posted 5 years of 4% handle annual GDP growth rates with Trump posting zero 4% and zero 3% annual GDP growth years.
The above chart is meant as an objective frame of reference for people to consider as they listen to the avalanche of qualitative and overhyped nonsense on Trump’s economic performance.
Part 1 framed Ronald Reagan economic growth vs. Trump (see Presidential GDP Dance Off: Reagan vs. Trump 7-27-24). We thought it a worthwhile exercise given the rhetoric making the rounds and what is at stake after Trump claimed the following during the GOP Convention (for the umpteenth time):
“The best economy in the history of our country, in the history of the world. We had the greatest economy in the history of the world. We had never done anything like it. We were beating every country, including China, by leaps and bounds. Nobody had seen anything like it.”
The picture is simple enough. In a range of advanced financial theories, higher numbers are often considered higher than lower numbers. It takes years of training. Then second grade arrives, and the learning curve gets steeper.
We see a slew of very strong quarters in the Clinton years and no negative numbers. We see 10 quarters are 5% or higher and a 7% quarter. The stock markets ran to all-time highs and the deregulation of the banks and convergence with the securities industry helped drive a lot of economic activity through increased leveraging of corporate America. We have covered those topics in other histories, but the main point for Clinton is that the numbers are vastly superior to those experienced under the 4 years of Trump.
Good results take bipartisan cooperation…
We don’t believe that the White House resident can control all the moving parts, but that is Trump’s schtick so we are running with it in the Presidential Dance Off for the purpose of answering his “greatest ever, ever, ever” rap.
The numbers generated during the Clinton years easily tell the story above. High growth rates and not a single quarter of contraction. Looking back across the decades, Eisenhower had a tough recession in 1958. Kennedy rolled into one in 1961 and the Nixon/Ford years had two recessions and one with an oil embargo. Inflation soared in the Nixon/Ford years. Carter ended with a recession and brutal inflation.
Reagan started with a recession and Volcker inflation war before his two terms played out. George HW Bush was hit with one starting in the summer of 1990. George W Bush faced some mild 2001 noise and then ended his second term with a recession (see Business Cycles: The Recession Dating Game 10-10-22). Obama started his first term with a recession as he was mired in the bank systemic crisis he inherited from Bush. Trump was hit with COVID. Biden still has not had a recession (yet). That leaves Clinton as one who ran the table.
Clinton saw the 1994 Republican revolution roll into 6 years of split Washington control, so checks and balances were alive and well. The bipartisan realities of legislation in the 1980s and 1990s offer a reminder that it works better that way when both sides can work together. The “cult model” is based on that being anathema since cooperation dilutes the power of the wannabe dictator. Those types might get two years to try their hand at absolute legislative control before they get derailed. The worry is this time the follow-through will be more immediate with Trump looking to seize the levers of power unchecked with an assist from the Supreme Court.