Historical U.S. Job Creation – Under Democratic and Republican Presidents and President Obama
It is widely recognized that unemployment is one of most crucial, if not the most crucial problem facing the American people today. From about 4.5% in early 2008, the unemployment rate in the United States began a sharp climb, which peaked at a little over 10% in October 2009 and has remained unacceptably high ever since, never falling below 8.8% during this time.
Historic differences in the Republican vs. Democratic approach to unemployment
From the time that Franklin Roosevelt (FDR) ran against President Herbert Hoover in the Presidential election of 1932, the Democratic and Republican parties have held very different views on how to approach employment issues. The Republican Party has consistently adopted a laissez-faire economics approach to unemployment, while the Democratic Party has generally held the view that it is the responsibility of government to create jobs.
The contrast was never greater than when Roosevelt ran against Hoover in 1932. Hoover, under whom the Great Depression began, was adamantly opposed to government intervention to end the Depression – and indeed, he steadfastly avoided government intervention, no matter how bad things got. FDR on the other hand strongly believed in government intervention on behalf of the American people.
FDR took office in March 1933. Unemployment rate stood at nearly 22% when FDR took office. It declined steadily during his presidency, so that by 1939 it was about16% - not good, but quite an improvement, as noted in the graph below.
Consider how that translated into job creation. During the 80-year period from 1929-2009, Hoover’s presidency was the only one during which jobs were actually lost – though George W. Bush’s two terms came mighty close to zero job growth, and Obama’s first term may end up in the red as well. Job growth during this 80-year period exceeded 4% during only two of the twenty presidential terms – FDR’s first term (5.3%) and his third term (5.1%). Job creation during his second term (2.6%) was tied for 7th of the 20 terms.
During the whole 80 year period from January 1929 through January 2009, the annual job growth record of every Democratic presidential administration was superior to the record of every Republican presidential administration. The huge difference between Democratic and Republican presidential administrations abruptly disappeared (so far) with the Obama presidency (January 2009 – present). More on that later. Here is the approximate record of average annual job growth, from best to worst, from 1929 to present, with Democratic presidents indicated in blue and Republican presidents in red:
Reasons for the superiority of Democratic presidents on job creation
There is no question that the consistent superiority of Democratic presidential administrations compared with Republican presidential administrations is related to the basic differences in philosophy regarding the role of the federal government in job creation.
The Democratic Party’s traditional perspective FDR has the best job growth record of any presidential administration in U.S. history. Yet, probably no figure in American history is despised as much by conservatives as FDR, who was accused in his day of being a Communist by many a conservative. Cass Sunstein, in his book, “The Second Bill of Rights – FDR’s Unfinished Revolution and Why We Need it More than Ever”, describes the philosophy that motivated Roosevelt to fight for his radical (at the time) programs to benefit the American people:
To Roosevelt, human distress could no longer be taken as an inevitable by-product of life, society, or “nature”; it was an artifact of social policies and choices. Much human misery is preventable. The only question is whether a government is determined to prevent it…. Foremost was the idea that poverty is preventable, that poverty is destructive, wasteful, demoralizing, and that poverty is morally unacceptable in a Christian and democratic society.
Consequently, FDR introduced the concept of economic and social rights, which had not gained much traction in the United States until his Presidency. FDR’s Presidency and fervent advocating of these rights coincided with circumstances (The Great Depression) that made their need glaringly apparent to a large proportion of American citizens.
Among the rights that FDR fervently believed in and aggressively supported was the right of every American to a decent paying job. This was manifested in his programs to create millions of federal jobs, which were major factors in the declining unemployment rate and record-setting job creation during his presidencies, as explained by Stuart Rosenblatt in “The FDR Jobs Program that Saved the Nation”:
In 1935, Congress appropriated $5 billion directly for the Works Progress Administration (WPA)… Did this break the bank? By no means. In fact, the investment increased the productivity of the economy as a whole, and therefore yielded more “payback” to the economy, including through taxes, than it took.
Roosevelt’s method for establishing a Second Bill of Rights was through more than twelve years of advocating for these rights and putting them into practice through executive orders and pushing Congress to enact legislation. Perhaps more important, by the end of FDR’s Presidency large segments of the American population accepted many aspects of his Second Bill of Rights as legitimate rights – for example, the right to a good education.
The Republican Party’s traditional perspective In marked contrast, Republicans continually spout off the idea that the federal government has little or no role to play in job creation, other than to stand aside and let the private sector work its magic through principles of the so-called “free market”. Unfortunately, President Obama has internalized and supported these Republican concepts – which is without a doubt the reason why Obama has by far the worst job creation record of any Democratic president since official government records on job creation were first developed.
This is what Obama said on the subject in September 2010, in the midst of the worst job crisis in our country since the early years of FDR’s presidency:
See, I’ve never believed that government has all the answers to our problems. I’ve never believed that government’s role is to create jobs or prosperity. I believe it’s the drive and the ingenuity of our entrepreneurs, our small businesses; the skill and dedication of our workers that’s made us the wealthiest nation on Earth. I believe it’s the private sector that must be the main engine for our recovery.
I believe government should be lean; government should be efficient. I believe government should leave people free to make the choices they think are best for themselves and their families, so long as those choices don’t hurt others.
Well, good luck with that approach, President Obama. I suggest you get rid of your conservative economic advisors and look at the historical record of those presidential administrations that spouted your Republican philosophy.
Mr. Obama’s problem – and the nation’s – is that in the midst of the terrible economic turmoil that the country was in when he took office, he did not make full employment, meaning job creation in both the short and the long term, the nation’s absolute highest priority….
Such an effort, properly conceived, would have put millions to work overhauling the nation’s infrastructure, rebuilding our ports and transportation facilities to 21st-century standards, establishing a Manhattan Project-like quest for a brave new world of clean energy, and so on… There was every reason to use those enormous amounts of public dollars… for investment in projects and research that the country desperately needs and that would provide enormous benefits for many decades. Think of the returns the nation reaped from its investments in the interstate highway system, the Land Grant colleges, rural electrification, the Erie and Panama canals, the transcontinental railroad, the technology that led to the Internet, the Apollo program, the G.I. bill.
More on the Obama record on jobs
In defense of President Obama, it could be said that presidential efforts are not the only factor that impacts on job growth. Furthermore, Obama did make some effort, through his stimulus package, to boost job growth. There is much evidence that that program did create a lot of jobs, and it is probably something that no current Republican leader would have supported. There are undoubtedly reasons beyond Obama’s control that account for the fact that his job record is so far the worst of any U.S. president since Herbert Hoover.
But at the time he put through his stimulus package, with Democrats in full control of both houses of Congress, our nation’s best economists warned him that it was much too small. Yet, in the interest of “compromise” with obstructionist Republicans, Obama settled for that much too small stimulus. And not surprisingly, his poor record on the economy led to a Republican takeover of the House of Representatives in 2010.
Many Obama defenders have pointed out that he inherited one of the worst economies in U.S. history. That is true – but the economy that Obama inherited was not as bad as the one that FDR inherited in 1933. Obama is not responsible for the unemployment rate that he inherited. But he is largely responsible for the U.S. job growth record since he inherited that high unemployment record. Bob Herbert comments on what FDR had to say about the situation that he inherited:
During the Depression, Franklin Roosevelt explained to the public the difference between wasteful spending and sound government investments. “You cannot borrow your way out of debt,” he said, “but you can invest your way into a sounder future.”
Another Obama administration policy that has not helped with our job crisis is putting so-called “free trade” above job creation in our country. An article titled “U.S. to Train 3,000 Offshore IT Workers” explained:
Despite President Obama's pledge to retain more hi-tech jobs in the U.S., a federal agency run by a hand-picked Obama appointee has launched a $22 million program to train workers, including 3,000 specialists in IT and related functions, in South Asia. Following their training, the tech workers will be placed with outsourcing vendors in the region that provide offshore IT and business services to American companies looking to take advantage of the Asian subcontinent's low labor costs...
In recent months, President Obama reversed his campaign promises on trade issues – first by dropping his pledge to renegotiate NAFTA and then by pushing to pass NAFTA-style trade agreements with South Korea, Panama and Colombia…
Now look, I'm all for a robust foreign aid budget – we don't do nearly enough to help the developing world. However, using foreign aid money to specifically help private corporations "take advantage of low labor costs" in the developing world – that's not "aid," that's rank taxpayer subsidization of for-profit exploitation. Right now, Even if we do not reform our atrocious trade policies that incentivize the ongoing wage-cutting race to the bottom, the least we should be doing is investing every single available dollar we have in job training and job creation here at home. Doing the opposite – actually using public dollars to intensify that wage-cutting race to the bottom – is grotesque.
What more is there to say?
One could speculate (and many have) on why Barack Obama ran for president in 2008 as a Democrat, and yet as president has governed largely as a Republican – but that is not the subject of this post. Suffice it to say here that his economic strategy has worked well neither for him nor for the American people. We continue in the midst of our worst economic crisis since the Great depression, the middle class continues to shrink, the income gap expands to record highs, and the poverty rate continues to rise.
I’m sure that all U.S. presidents want to have a good record on jobs. Even Republican President Richard Nixon supported a jobs program, the Comprehensive Employment and Training Act, to facilitate job creation, in response to a struggling economy. Maybe that’s why he has the best job creation record of any Republican president from Hoover to Bush II.
But President Obama echoes too many Republican talking points, both in his rhetoric and in his policies, in his efforts to “compromise” with the Republican psychopaths in Congress. That’s a terrible shame, because it should be obvious by now that those Congressional Republicans are not the least bit interested in helping Obama create jobs for the American people. Their attitude seems to be that if they can obstruct all efforts by Obama to create jobs, then they can blame our continuing economic crisis on him. Rather than helping them with that effort by “compromising” with them and spouting Republican rhetoric, President Obama should be fighting them all the way in behalf of traditional Democratic Party principles that have a long-standing excellent track record.
It’s not too late. He’s still president, and if he radically changes his approach soon, he may yet be able to begin to bring us out of this very long recession, and may even get a chance to do more in a second term. But if he fails to make efforts in that direction, we really need a good solid primary challenge against him in 2012.
60. Vote a STRAIGHT DEMOCRATIC BALLOT - give Obama a real majority to work with and be happy again.
There was net job loss every month for eight years of bush/cheney republiCON reign. The Iraq war was started on outright lies and deception with tax cuts thrown in for the upper brackets and corporations. Now, all of a sudden, the republiCONs are going to solve the country's deficit problem. OOOOOOOOOOOkay that's believable!
There has been positive job creation (not a loss ever) every month of Obama's Presidency. If the electorate would give him a SOLID DEMOCRATIC MAJORITY in the legislature and not get sidetracked by Tparty and other "quick fixers" as in 2010, we can put this country back together. VOTE DEMOCRATIC AND BE HAPPY WITH YOUR COUNTRY AGAIN!
Note that Obama is near the very bottom of presidential administrations with regard to job creation.
The point is that Obama's job creation record approximates that of Republican presidents much more than that of Democratic presidents. That's because his economic philosphy and policies are closer to Republican than Democratic presidents. I am NOT by any means urging anyone to vote for Obama.
17. You are not encouraging anyone to vote for Obama?
I can only suppose that you want someone as stupid as Backmann or Palin to be your president. Obama inherited a mess that the Republicans created and are refusing to cooperate in solving. Where in the hell did you get the notion that Obama's philosophy is Republican light? The Republicans are nothing more than unpatriotic obstructionists who's line on unadulterated bull shit you have bought.
25. Evidently it is you that can't read, He states he wouldn't encourage anyone to vote for Obama.
Edited on Sat Sep-03-11 10:18 AM by olegramps
He is suggesting a primary challenge. If that was to take place it would split the party and guarantee a Republican victory. Is that what you want? I am not totally impressed with Obama but he is our best hope in retaining the presidency. The Republicans would use the challenge to to destroy any hope of ANY Democrat winning. It would be an affirmation of the failure of the Democrats to correct the mess they inherited. They would capitalize on this by saying even the Democrats think he is a failure. So kiss off with your insults.
38. Yes, I'm not encouraging anyone to vote for Obama
Yes, he inherited a mess. And instead of seriously attempting to do something about that mess, he continually "compromises" with the Republican psychopaths that you rightly state won't cooperate with him.
Where do I get the notion that Obama's philosophy is Republican light? I stated several places where I got that notion in the OP. To reiterate and add some:
1. Obama quote "I’ve never believed that government’s role is to create jobs or prosperity..." 2. He settled for a much smaller stimulus bill than our non-Wall Street connected economists told him was the necessary minimum. 3. His stimulus bill put way too much emphasis on tax reduction, and not enough on infrastructure and social programs 4. He continued the Bush tax cuts for the wealthy, even though he campaigned on just the opposite. 5. He supports so-called "free trade" bills that outsource American jobs 6. He authored a health care bill that: a. Leaves the private insurance industry in charge of health care insurance b. Mandates that most Americans purchase health insurance from private health insurance companies c. Has done nothing to decrease the number of Americans with insurance (In fact there are now 5 million more uninsured Americans. 7. Bailed out Wall Street with several trillion $ and then neglected to support legislation to adequately regulate them
There is much more, but I'll leave it at that for now.
50. Good article though I do have a nitpic which is even if he were to suddenly do such a massive change
Edited on Sun Sep-04-11 12:56 AM by cstanleytech
it wont matter much imo atleast because for now congress is in the hands of people (and its not the democrats for your first clue) who likely wont approve of any such major spending because they fear it might help him regain a 2nd term and they swore they would do *anything* to make sure hes a one term president (your 2nd clue). So until the makeup of congress changes (and not just for 2 years under a democratic president) I wouldn't get your hopes up over any more major programs that actually benefit the american people, in fact I would brace yourself becauese with the support of the gop and some dems (you know who you are) we might be actually be seeing another republican swept into the presidency soon.
Why would I encourage people to vote for him? (There is a difference between that and actively encouraging people NOT to vote for him.) I think he's very similar to a lot of Republicans. I acknowledge that he is superior to any of the likely Republican candidates -- but not much. So I'd very much like to see a primary challenge.
26. I 100% disagree with you. Go study FDR's job creation record during
his first term. Compare that record to Obama's record. Sir, I double dare you to do that. You pass off as an academic, the research should be rather easy for you to perform. Just one more challenge, I will be vigilant so don't try to color the research results to fit your agenda.
27. You need look at FDR's job's record during his first term.
Coming out of the Depression, FDR had an abysmal jobs record during his first term. And FDR faced the same type of republican hatred and resistance that Obama is facing. It was only when FDR stood to be denied a second term did he take a more hostile stance toward republicans, winning re-election and ushering in a super majority of democrats in Congress. During and after the second term is when the New Deal that some many Leftists here on DU wax nostalgic about began. The question is whether myopic views of history by purists prevent another New Deal that will launch american into a secure future?
Obama's challenge is to start taking a hostile tact toward republicans. Recent actions that he took concerning agencies working around Congress to get jobs projects rolling indicates that Obama has in fact began to realize the same logistics that FDR saw after spending most of a first term trying to work with republicans to provide for the nations' best interests.
59. Vote a STRAIGHT DEMOCRATIC TICKET give Obama a real majority to work with and be happy!
Obama has completely turned around the catastrophic job losses of the Bush/Cheney fiasco administration. Job creation is consistently edging upward as the bleeding from the republiCON raping of the nation from 2000 to 2008 has finally been replaced by a Democratic administration. Hopefully independents will realize the grave error of their ways in 2010, electing Tparty dunces, and get back to the nations betterment by VOTING A STRAIGHT DEMOCRATIC BALLOT.
"But President Obama echoes too many Republican talking points, both in his rhetoric and in his policies, in his efforts to “compromise” with the Republican psychopaths in Congress. That’s a terrible shame, because it should be obvious by now that those Congressional Republicans are not the least bit interested in helping Obama create jobs for the American people. Their attitude seems to be that if they can obstruct all efforts by Obama to create jobs, then they can blame our continuing economic crisis on him. Rather than helping them with that effort by “compromising” with them and spouting Republican rhetoric, President Obama should be fighting them all the way in behalf of traditional Democratic Party principles that have a long-standing excellent track record."
republicans chose to use the filibuster, unlike when dems were in a similar 'minority' with the republicans having a non-filibuster-proof majority and bush as prez.
The same dems that couldn't stand together and filibuster the republican-run senate, couldn't stand up against a republican filibuster. The republicans seem to have no such problems in enforcing unity.
22. The democratic Senate can be blamed for the 60 vote super majority rule.
This poster bets that if republicans gain control of the Senate, they will move to eliminate the 60 vote rule and institute a simple majority rule, leaving democrats with only the classic filibuster tactic of trying to talk a bill to death. The republican's clear intentions adds even more importance to democrats being active during 2012 primaries and the general election. I don't care if progressives primary out some weak democrats like McCaskill and Nelson, but the people that win those primaries MUST be capable of winning a general, please no more situations like in Connecticut that gave us a near republican independent to content with during critical votes.
20. He barely had a Democratic majority. A boatload of them were right-wing Democrats.
Because of them, the Public Option had to be deleted in order for the health insurance bill to pass. Sure, insurance companies can no longer exclude people based on pre-existing conditions, but it won't stop them from charging exorbitant rates or from age discrimination in setting premiums for people.
58. Vote a STRAIGHT DEMOCRATIC TICKET, you will be happy.
Independents, swayed by inordinate Murdoch media coverage of the conservowhacko Tparty, made the mistake of not voting DEMOCRATIC - now the whole country is screwed by an obstructionist conservoinsane legislature. If you want more of this Unamerican republiCON bullshit then don't VOTE A STRAIGHT DEMOCRATIC BALLOT. Oh yeah - hows that deficit ceiling obstruction and forced Tparty whaco austerity balanced budget bullshit working for your 401k?
9. China. China. China. Unless and until we recognize that
the hemmoraging of jobs to China is not only continuing unabated but accelerating, the destruction of the American middle class will accelerate.
The government cannot replace the tens of millions of manufacturing jobs lost to China.
We can't throw up tariffs on Chinese goods, or they'll stop financing our debt.
The battle for clean energy has already been fought and lost. Evergreen Solar and Solynrda have recently declared banckruptcy, and the Chinese own 90% of the rare earth Neodymium which is used in the magnets for wind turnine generators. Game over.
My conclusion? We're fucked, end of story. We're on a downward spiral that cannot be reversed. There's no political will to reverse the Bush tax cuts or for that matter raise taxes even $.05 on billionaires.
18. The energy source that will save the planet has not been publicized yet.
But believe me, it is being worked on. Wind and solar have major drawbacks. The one benefit that the USA still has is it's aging, but very good brain power. That brain power is what will deliver a previously inconceivable energy source that will turn science on it's ears and will be 100% green and safe.
As far as USA workers are concerned, I am afraid that standards of living will never be what they were during the last century when the USA was the dominant manufacturer. Other countries are modernizing. The USA standard of living was above the mean for a century, logic would say that it must at some point regress to the mean, my sense is that is happening now. How should americans react? My preferred choice is that people that are child producing age strongly evaluate whether they want to produce more human beings for american to absorb and employ. A smaller, smarter population is not a detriment, as scandinavian country experiences attest to.
34. Agree with you on the smaller, smarter population front. Denmark has
about 5mil citizens and a very robust manufacturing base and a strong safety net.
Not sure what new energy source you're referring to. We no longer have a monopoly on brainpower, so whatever it is, you can be sure the Chinese and Indians are working on it too, with the added advantage of massive government subsidies.
The Chinese govt gave Yingli, the state-owned solar conglomerate $5 bil, which is 10x the amount we've given.
To be fair, you would have to cast out the first quarter after inauguration, then look at job growth. The jobs picture began to slowly get better in June 2009, about seven months after Obama took office. Jobs trends charts show that Obama is second to Bill Clinton in jobs creation, having produced something like 2.3 million jobs in an extraordinarily depressed world economic, one that undergoes constant shocks caused by eight years of mismanagement prior to Obama taking office. With democrats like you, who needs republicans to contend with?
The problem that I have with the OP is that the graphic includes job loses that were in the works when Obama put his hand on the bible. That is why I consider the OP deceptive. But given the author, that angle does not surprise me. It is ok for us to disagree, but people need to stop coloring information to match their agendas.
it is charting something against time but gives no clue as to what it is charting without description and context this chart doesnt tell me anything it could be a chart of candy sales at waffle house for all i can tell
Slowing down therate of job loss, while continuing to lose jobs for almost a year after taking office is not very impressive. He continued going in the wrong direction, but at a slower rate than Bush. I acknwoledge that he is a better president than Bush, but that doesn't give me much comfort.
Even now, the rate of created jobs is very slow, too slow to do much at all about our unemployment problem. There are many things that Obama could have done to address our job crisis much better than he did, but with an attitude of "I’ve never believed that government’s role is to create jobs or prosperity...", then his hands are pretty much tied, aren't they? Yet he has no problem with spending trillions of $ to bailout the Wall Street bankers who contributed record amounts of money to his campaign.
Edited on Sat Sep-03-11 01:13 PM by Time for change
For almost a year after taking office, the U.S. continued to lose jobs. Refusing to hold Obama responsible for that is like refusing to hold Bush accountable for 9/11 -- especially considering that they both had opportunities to address the situation much better than they did.
Even now, almost 3 years after taking office, job growth is very anemic -- which is why Obama's job creation record is worse only than Hoover's.
So please tell me how I am misinterpreting the chart?
51. The laissez faire -- let the private sector create jobs without
government intervention will not work because the reason for the unemployment is the drastic technological progress in the last two decades.
Free trade ruined American industry. We have to live in the dollar economy. The Chinese don't. Sure, their living standard is a lot lower than ours, but they do not have to deal with the fact that their currency is the oil currency, that their currency is used to determine the price of oil.
The average American lives large, but the quality of our lives is not that great -- not compared to the quality of life for Europeans. (Yes, I have lived there.)
In addition, the internet has changed our economy, and the negative effects on the jobs market are being felt.
I passed a small specialty bookstore that I have known for a long time -- and in the window there was a sign announcing a going out of business sale. Now it used to be that those signs simply meant that the store would re-open under a new name.
But nowadays most people buy as much as they can on the internet. You can even by shoes on line.
The only things you may not want to buy on-line are fresh food items, large-sized, bulky items (cars, gardening tools), clothes, fabric or yarn where the color and fit matter a lot.
Everything else is easier and often cheaper to buy on-line.
So now, even retail "service" jobs are fewer.
I can't honestly think of any field in which the demand for labor has increased in recent years.
Private industry cannot deal with this.
That is why the Republicans and Obama are wrong on this.
The unemployment is due to enormously forceful systemic factors. We have to have a societal effort to grow our economy to deal with human needs in the face of the new technology and the global economic reality.
57. Corporations have told us that the world has changed and they're NOT GOING TO provide jobs anymore.
Obama can't change this. If he had the power to do THAT, he could get the damned companies to do pretty much anything he wanted. So far I don't hear ANYONE in the mainstream political spectrum saying anything significant about what these jobs are supposed to BE, what they will accomplish, and who will pay for them.
Sure, we could put people to work repairing the country's infrastructure. Who's going to organize them, see that the work is done with quality instead of the cheapest crappiest work possible, and who's going to pay them? The rich don't need any of this, and don't particularly benefit from it. Likewise the corporations. They simply don't NEED America to be functional any more - it isn't in their economic interest.
Personally I'm predicting a revival of localism and small business, but I don't expect the government to respond in any way but outlawing it.
Thank you for your excellent structural analysis of the correlation of employment and political party governance.
Unfortunately, President Obama has turned against many of his campaign promises. What we appear to be seeing is the corporatization of the Democratic Party. The Republican Party appears to have been corporatized far earlier, as your presentation illustrates.
Forget Bush's "human-animal hybrids." Our country has been taken over by the global oligarchy, an uber-rich ruling elite comprised of what I would call "corporate-human hybrids."
During FDR's time, political activism was prevalent and our manufacturing base had not been dismantled as it is now.
But now, corporations have been declared people and bribery has been sanctioned. What does our approach need to be to healing the wounds suffered upon America?
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