President Obama and his defenders have kicked off a new talking point in the final days of the campaign to persuade us that current government policies are better for job creation than Bush era policies, and higher tax rates will result in more jobs than the Bush tax rates. The talking point is:
More private sector jobs have been created in 2010 than the entire Bush Administration.
As the chart shows, the number of private sector jobs was about the same at both ends of the Bush Administration enabling the Democrats to now say no jobs were created. But that simplistic political slogan doesn’t account for all that happened over those eight years, and hides the fact that there was a four year period of strong job creation, much stronger than anything we’ve seen this year.
Rather than deceptive slogans the voters deserve a sincere effort to discover what government policies are best for job creation, starting with a sober review of the downs and ups of the Bush years.
- Job losses began the month Bush was sworn in. A total of 1.8 million jobs were lost in 2001 due to the dot.com recession and the 9-11 terrorist attacks.
- In late 2001 Congress enacted a schedule of tiny incremental reductions in tax rates to be phased in over four years. This proved ineffective and job losses continued through 2002 and into 2003.
- In May of 2003 Congress abandoned the incremental schedule and enacted new, substantially lower tax rates for all brackets. These rates are still in effect today and are known as “the Bush tax rates.”
- Job growth began four months later, in September, and continued for 51 months for a total of 8.1 million new jobs.
- In 2008 the mortgage crisis brought on another recession and 4.4 million jobs were lost in Bush’s final year.
Obviously, 2008 was an economic nightmare. But contrary to what Obama would have voters believe, there is simply no connection between the tax cuts of 2003 and the mortgage malfeasance that caused the economic crisis, the recession and the massive job losses of 2008 and 2009. Nor is there any evidence that raising tax rates now will somehow help create more jobs or prevent another financial crisis.
The Democrats’ claim of superior job creation comes from comparing the best nine months of the Obama Administration with the entire eight years of the Bush Administration. But that’s an apples to oranges comparison. Apples to apples would be:
- Compare the entire Obama Administration so far, beginning with enactment of the stimulus in his third week, with the entire Bush Administration. Obama’s record so far is a net loss of 3.8 million jobs Vs Bush’s net loss of about 700 thousand jobs.
- Comparing the best nine months of each Administration gives Obama credit for an increase of 863,000 private sector jobs while Bush gets credit for 1.8 million private sector jobs.