Prosperity grows under Republicans

Two theories net different results

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"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness," said Charles Dickens (1812-1870) in one of the most celebrated passages in English literature. "It was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair."

"A Tale of Two Cities" illustrated how starkly different were the views in London and Paris of the French Revolution. There's a similar gulf between Democrats and Republicans on economic policy.

To get the economy moving again, increase spending, bail out failing businesses, invest taxpayer money in "green" technologies and redistribute wealth, Democrats think.

Reduce government spending and debt, lower tax rates, slash government red tape, Republicans think.

What is Light to Democrats is Darkness to Republicans, and vice versa. Both approaches have been tried. They've produced very different results.

The economy grew 1.7 percent in 2011, down from 3.1 percent the year before, the Bureau of Economic Analysis reported Jan 27.

The recession officially ended in June 2009. It took until last August -- 15 quarters -- for the gross domestic product to exceed pre-recession levels. That's three times longer than the average for the recoveries following the 10 previous recessions since World War II.

This recession was very bad, Democrats note. The only one comparable was in 1981-82.

Usually, the more severe the recession, the more robust the recovery. In the first 10 quarters after the 1981-82 recession, GDP grew 15 percent. The president then was Ronald Reagan. His economic policies were the opposite of Mr. Obama's.

The most dramatic difference is in job creation. About 790,000 jobs have been added since the Obama recovery began. In the first 10 quarters of the Reagan recovery, the economy gained 7.5 million jobs.

The unemployment rate declined from 9.5 percent when the Obama recovery began to 8.3 percent in January. But there'd have been no decline if the Bureau of Labor Statistics counted discouraged workers. Even though the working age population has increased by about 4 million, the labor force, according to the BLS, shrunk by 850,000. If the labor force were the same size as when Mr. Obama was inaugurated, the unemployment rate would be 10.9 percent.

In the first 24 months of the Reagan recovery, the unemployment rate fell from 10.8 to 7.2 percent -- even though the labor force grew by about 4 million.

The Obama recovery, such as it is, has come in spite of his policies. Much of the improvement in the unemployment rate that is not the product of statistical manipulation is the result of reforms instituted by Republican governors.

The four states where the unemployment rate declined most in 2011 -- Nevada, Florida, New Mexico and Michigan -- are all states where a Republican replaced a Democrat in 2010.

The six states where jobs grew fastest all have Republican governors and right to work laws. Of 28 states the Bureau of Labor Statistics said had statistically significant job growth last year, 17 have Republican governors.

Democrats control the state house and the legislature in three of the four states where unemployment rose.

Mr. Obama was blocked from implementing fully his economic policies when Republicans won control of the House of Representatives. To see what America would be like if he had, look at his home state of Illinois.

People in the Land of Lincoln pay a lot in state and local taxes, but government spends much more. Illinois is $128.4 billion in debt. Its credit rating is the worst in the nation.

Rather than cut spending, the Democratic governor and Democratic legislature raised corporate taxes 46 percent, income taxes 67 percent. Thousands of people and hundreds of businesses -- including Sears, Caterpillar and the Chicago Mercantile Exchange -- made plans to leave the state. The economy ground to a halt. Unemployment rose from 9.2 percent to 9.8 percent.

Many fleeing Illinois are headed for Wisconsin, where the business climate has improved from 43rd to 17th since Scott Walker was elected governor, according to Chief Executive magazine. Gov. Walker closed the $3 billion deficit he inherited without raising taxes.

The evidence makes clear which method makes the economy grow. But for Democrats, ideology and self- interest trump evidence.


Jack Kelly is a columnist for the Post-Gazette and The Blade of Toledo, Ohio ( jkelly@post-gazette.com , 412-263-1476).


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