Top 10 Fun Facts on Past Presidents and their Economies
For Inauguration Day, we look back at the timeline from Nixon to today on Presidential economic performances.
Take my greatest economy ever…please!
We look back across time from the late 1960s to the current cycle with a look at economic growth highlights and lowlights.
The 1980s and 1990s were other worldly booms, so the idea that Trump had the greatest economy in history borders on hilarious.
The post-2000 period is about 2% US growth rates, so these days 3% is a great number unless bouncing off a contraction.
TOP 10 LIST
Ronald Reagan first term finish: Reagan topped the leaderboard in 1984 with a dazzling +7.2% GDP growth rate in what was a breakout year that unfolded 2 years after the double-dip recession of 1980-1982. The second leg of the earlier recession was especially ugly and protracted (16 months) and ended in Nov 1982. Reagan was a hard-core Cold Warrior and had the biggest tax cut in history relative to GDP (Trump had the biggest tax cut otherwise). Reagan had some ideas that would make him a “RINO” today such as immigrants were the backbone of America and assault rifles should not be over-the-counter items near the candy bars.
Clinton 1993-2000: Bill Clinton posted GDP growth over 4% for 4 straight years and for 5 out of his 8 years while Trump hit 3.0% once in his best year with two years of GDP growth in the mid 2% range and the COVID year of 2020 at -2.2%. Clinton’s performance had no recessions or contraction, bullish stock markets, and constituted the best two-term economic performance by far of any President from the Nixon period and later.
Biden 2021: Biden posted a +6.1% growth rate in 2021 for the second best year in annual GDP growth rates in the post-1968 rankings even if it came as a bounce off the COVID peak. All the stimulus came back to haunt Biden on supply-demand imbalances and inflation on its way to a brief June 2022 peak of 9.1% for CPI.
Clinton and Biden have no recession years: Avoiding contractions is easier said than done but you can at least hope to inherit the underlying factors to blame the previous guy. For example, Reagan could blame Volcker monetary policy started under Carter and Obama inherited the systemic crisis. GW Bush inherited a tech bubble in his first term that dropped into a 2001 contraction but then saw a systemic crisis and recession to wrap up his second term.
GHW Bush 1992: Among the most-underappreciated quarterly GDP streaks in history for four quarters was George HW Bush during 1992 with GDP growth rates over 4% for 4 quarters coming off the 1990-1991 cyclical pain and banking headaches (see UST Moves: The 1990-1991 Risk Factor Pig Pile 10-24-23). Bush got a lot of help from Greenspan, but none from the NBER Harvard/Cambridge economics crowd who did not declare until much later (Dec 1992) that the recession had ended in Mar 1991. Seriously, they waited until Dec 1992 to declare that the recession had ended in Mar 1991. Of course, that was after the 1992 election won by Clinton in the time of “it’s the economy stupid” (see Business Cycles: The Recession Dating Game 10-10-22). Bush could have used that decision before election day. Harvard put the screws to a Skull and Bones Yale guy on that one!
Nixon/Ford 1969-1976: Nixon has no shortage of notoriety for everything from political unrest during the Vietnam war to wage price controls to the gold standard exit and Watergate, but he and his second VP (Ford, who replaced Nixon when he resigned in 1974) put up three 5% handle GDP growth years in the period from 1972 to 1976. Unfortunately, that was wrapped around very rare back-to-back negative annual GDP years in 1974-1975 when inflation was ugly and gas station lines were long.
Carter and the 1979 inflation spike: People often forget that Carter had the biggest % increases in payroll across his term and had three years of GDP growth better than Trump’s best year (see Payroll % Additions: Carter vs. Trump vs. Biden…just for fun 1-8-25, Annual GDP Growth: Jimmy Carter v. Trump v. Biden…just for fun 1-6-25). The problems for Carter really kicked into gear in 1979, however, even though the record books show the 1980 inflation and recession (6 months) to be his undoing. The late 1973 and 1974 chaos in oil markets in the Middle East helped crush Ford as memories lingered into 1976, but the inflation spike of 1979 and the Iran oil crisis got it rolling for Carter. With Biden facing a similar fate in oil stress, sometimes people seem to forget that Russia invaded Ukraine in Feb 2022 and sent inflation spiraling on both direct (prices at the pump) and indirect effects (freight, raw materials, etc.). Everyone wants to blame a single stimulus package, which is both ignorant and politically motivated.
The post-2000 growth blues: When market watchers try to figure out why the 1980s and 1990s did not roll on into the new millennium, there are many views as to why 3% years are hard to find and 3% quarters are considered strong quarters. One reason on the shorter list of factors is the massive UST sovereign debt that has just kept on climbing and will do so again from here (see US Debt % GDP: Raiders of the Lost Treasury 5-29-23). The book This Time is Different was all the rage back in the sovereign crisis period that ran in shifts from 2010 into a peak case of nerves in 2011 and settled down by summer 2012. To me, the book said, “We have no idea what sovereign leverage (debt % GDP) causes problems or triggers a crisis.” That is of course of limited value even if it is a provocative history read. The part that did stick is that high systemic sovereign leverage leads to slow growth. Can’t argue with that! Yet Trump will take that leverage much higher as he did in Trump 1.0.
Obama GDP numbers were the weakest of the mix: I voted for the guy twice, but his GDP growth numbers were bad. Trump hit a 3.0% year once, but Obama came up empty on any 3% years. He had a contraction year in 2009 and can blame Bush, but he also had two 1% GDP years. He was inspiring, but his economic numbers were not. His first term was a tribute to how brutal the systemic crisis was and how badly the payroll ranks were decimated. Obama also faced 6 years of GOP split control of Congress after the 2010 midterms torched the Democrats in the biggest swing in the postwar era.
GW Bush brings up the rear: George W Bush set the course on wars and will be battling the history books in coming centuries on the Iraq War decision even as he rode to a post-9/11 approval rating of 90, edging out his father’s 89 record. In those days, wars rallied the sense of “patriotism over party” and “bipartisan beyond the shoreline” was still in style. That was before the reign of the draft dodger. The TMT implosion of 2001-2002 to start his two terms and the systemic crisis to end it left the 2000 to 2009 stretch as the “lost decade for equities.” Interestingly, he did put up two 3% handle GDP growth years (3.8% 2004, 3.5% 2005) that were both better than the best year for Trump and better than all of Obama’s years. Then again, those two years were part of the housing bubble.
Happy Inauguration Day! Let the games begin.