August 4, 2004
A Record of Recovery
ver the course of last week, we heard a lot from the Democrats about their record of economic achievement. So let's take the advice of a Democrat of yesteryear, Al Smith, the former governor of New York. His trademark phrase was, "Let's look at the record."
These charts show the rate of change in real gross domestic product and in employment from 1990 to last June. The shaded areas show recessions. The vertical lines show when President Bill Clinton took office and when he left. Because the economy has momentum, it's useful to look carefully at the trends in evidence at the time of presidential transitions. When you look at the record, a quick summary is this: President Clinton inherited prosperity; President Clinton bequeathed recession.
The 2001 recession was short and shallow, with employment - always a lagging indicator - the last part of the economy to rebound. The employment picture has been a little puzzling since the two main surveys - one asks existing establishments how many people are on their payrolls, and the other asks people in a large sample of households whether they have jobs - show slightly different patterns. In any case, by now a third piece of the record appears clear: the recession President Clinton left behind has turned into prosperity under
Thanks, Al Smith, for your good advice.
George P. Shultz, secretary of the Treasury from 1972 to 1974 and secretary of state from 1982 to 1989, is a distinguished fellow at the Hoover Institution at Stanford University.