Bill Clinton Was Right That Dems Create More Jobs Than GOPers -- and Here's the Scoreboard for Good Jobs Making Real Things
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Some observers will want to focus on Obama’s record. Here’s what we found on that score (using, as noted, the most recent available numbers for Obama). Based on all three of our measures, Obama’s manufacturing jobs record is currently better than eight of the nine Republican presidential terms. President Ronald Reagan’s second term does slightly better than Obama’s incomplete first term, but the numbers are close enough that this may change once we have all the numbers. An interesting question is what Obama’s manufacturing jobs record might have been had he not intervened to save General Motors and Chrysler.
Over the full span of our data, the differences we found are large. To gauge how large, it may help to consider how much bigger U.S. manufacturing employment would be if manufacturing employment trends across all Republican administrations had been the same as across all Democratic ones. The smallest aggregate gap between Democratic and Republican administrations, using our three methods, is about 12.7 million. This means that if Republican presidents had performed as well as Democratic presidents, the United States would have more than double the manufacturing jobs it has today. Put differently, the manufacturing employment share would be approaching the 20 percent employment share of German manufacturing. (For international manufacturing employment comparisons, click here.)
What explains our striking findings for manufacturing employment trends under Republican and Democratic presidents?
Differences in macroeconomic policy certainly seem a plausible part of the explanation. Clearly, the manufacturing job losses in Reagan’s first term were related to the effort to drive inflation out of the economy, which was led by Federal Reserve Board Chair Paul Volcker. More recently, the Recovery Act that the Obama administration navigated through Congress (without a single House Republican vote) played a critical role in limiting the amount of additional manufacturing job loss after the first part of 2009. In the last two years, the Obama administration and Democrats in Congress favored doing more to strengthen job growth but were unable to do so in the face of Republican opposition. That would have further improved the manufacturing numbers. This emphasis on macroeconomic differences echoes Bartels’ analysis, which identifies Democratic “Keynesianism” and the contrasting Republican focus on inflation as the key policy difference driving disparate patterns of income growth under Republican and Democratic administrations.
A second policy area of importance to manufacturing is trade, including exchange rate policy. Here there is not as much distance between the parties—both of which have supported free-trade agreements while also periodically using trade law to protect particular industries. (The two most prominent examples of the latter occurred under Republican presidents: the Voluntary Restraint Agreements negotiated in the auto sector under President Reagan, and the steel tariffs established in President George W. Bush’s first term). Both parties have also been reluctant to unilaterally or through negotiations lower U.S. exchange rates with key manufacturing trading partners, with the most substantial of such efforts (the 1985 Plaza Accord with Japan, Britain, France and West Germany) coming on Republican watch. One question worthy of further study is whether domestic macroeconomic policy more focused on fighting inflation also contributes to raising the value of the dollar, increasing manufacturing imports and lowering exports under Republican presidents.
A third policy area is manufacturing or “industrial” policy. Presidents Clinton and Obama have been supportive of policies aimed at helping U.S. manufacturers become more productive (for example, through funding for “Manufacturing Extension Partnerships” patterned conceptually after agricultural extension technical assistance that helped make U.S. agriculture the most productive in the world). The auto industry bailout opposed by most Republicans, the Obama Advanced Manufacturing Partnership announced in 2011, and Recovery Act efforts to stimulate green and other advanced manufacturing sectors are recent examples of Democratic support for manufacturing-specific policies.