Private equity professionals spend a good part of their day looking at balance sheet figures. Here’s a break from the traditional look at financial numbers and instead a focus on how the economy has performed over the past 60 years’ – by each U.S. president.
The five measures are Gross Domestic Product (GDP), Employment, Inflation, Retail Sales, and Personal Income. A note of explanation on all the charts: the x-axis is the number of months the given individual was president; the y-axis is the percentage change in the given indicator since the start of the presidency. Each line represents the given measure.
GDP
The first measure is GDP. Obama, the current president, does not look good by this measure, with real GDP up a little over 10 percent since the beginning of his presidency in January 2009. There’s only one president with a lower GDP growth figure at this point in his presidency – Eisenhower. Of course, GDP performed quite strong from Eisenhower’s 63rd to 78th month. The strong recovery late in Eisenhower’s presidency placed GDP growth as third highest of the past 12 presidencies (of course, some president’s didn’t make it to the maximum 96 months).
If the sitting president is lucky, he might see GDP growth perform a little better than GDP growth under his predecessor – Bush II. This would no doubt be quite disappointing to Obama supporters, given that Obama had the advantage of coming in as president when GDP was at its bottom, while Bush had to deal with the onset of the recession.
On the top of the charts are Clinton and Reagan, with GDP up 35 percent under President Clinton and 31 percent under President Reagan.
Retail Sales
Next we’ll look at Retail Sales. By this measure, Reagan was the best president, seeing consumer spending grow by 68 percent under his watch. In second place is Clinton at 57 percent.
Absent the financial recession, Bush II would have been third, but the housing bubble dropped Retail Sales during his presidency from 35 percent to 19 percent. Presuming the economy doesn’t head into a recession at the end of Obama’s presidency, third place may belong to Obama, with Retail Sales currently up 28 percent during his presidency.
Personal Income
Based on the third measure, Personal Income, President Reagan was quite strong, with Americans’ income growing 79 percent during his administration, far ahead of the next closest president, Clinton, at 59 percent.
Akin to GDP, this measure does not make the sitting president look good, with Personal Income only up 19 percent so far. Unless the economy experiences some very strong growth in income generation, Obama is unlikely to catch up with Bush II, who ended his presidency at 37 percent.
Inflation
The worst president according to the fourth measure, Inflation, was President Carter, with inflation up 47 percent during his tenure. Inflation has not been too big of an issue under President Obama, up just 11 percent so far.
Unless there is a large bout of inflation in the late stages of Obama’s presidency, it’s likely that inflation under Obama will have grown less than inflation under Bush II, who saw inflation expand 20 percent during his 96 months.
Employment
The last measure is total employment growth. Based on this measure, presidents Clinton and Reagan saw the best labor markets, with employment up during their presidencies 21 percent and 17 percent respectively.
In looking at the past two presidents – Obama and Bush – there’s a chance that employment might come in higher under Obama versus the growth under Bush. Currently, employment is up just 3 percent during Obama’s tenure, while employment peaked during Bush’s presidency at a little over 4 percent, after which the economy turned south because of the housing market bust, putting Bush’s final number at 1.6 percent.
Overall, the past 12 presidents have seen some large differences in how the economic indicators have performed under their administrations. In terms of comparing presidents, the economy generally performed best under Reagan and Clinton, at least when measured by the five indicators of GDP, Retail Sales, Personal Income, Inflation, and Employment. In comparing the two most recent presidents – Obama and Bush II – the measurements are a little less clear. At this point in both individuals’ presidencies, employment and inflation are performing a little better under Obama, while GDP and income were better under Bush. Retail sales are about even.
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