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Laffer Associates
Game On [Updated 7/6/2016]

that the economy is shouting for a party change. This does not bode well for the Democratic Party, which continues to endorse the current status quo.

And to confirm GDP growth’s implications, we also have the disappointing measure of employment to adult population. Again, there is every reason on Earth to change parties now. There literally has been no Obama recovery, and Hillary Clinton promises she’ll do more of the same. The U.S. has about 10 million fewer jobs per year than we would have had if the ratio of employment to adult population were what it was in mid-2000.

Just compare the ascent of the employment to adult population ratio for the eight years of Obama to the Johnson years, or even to the Nixon years, and especially to the Reagan and Clinton years. This Obama economy really isn’t a recovery, let alone a strong recovery, as one would expect should have happened following the devastating collapse of the Great Recession. Why would Hillary Clinton want to run on the Obama record? It’s beyond me.

Figure 2
Civilian Employment-to-Population Ratio
(monthly, Jan-48 to Mar-16, percentage points)

[Chart Labels and Annotations:]
65
64
63
62
61
60
59
58
57
56
55
54

Eisenhower I
Eisenhower II
Kennedy
Johnson
Nixon I
Nixon II
Carter
Reagan I
Reagan II
H.W. Bush
Clinton I
Clinton II
Bush I
Bush II
Obama I
Obama II

Jul-48: 57.1
Oct-49: 54.9
Mar-53: 58.1
Jul-54: 55.0
Jan-56: 57.8
Apr-58: 55.2
Jun-60: 56.5
Sep-61: 55.0
Aug-69 to Dec-69: 58.1
Jun-71: 56.2
Nov-73 to Mar-74: 58.2
Jun-75: 55.8
Feb-79: 60.1
Feb-83 to Mar-83: 57.1
Jan-90: 63.2
Dec-91: 61.2
Apr-00: 64.7
Sep-03: 62.0
Dec-06: 63.4
Nov-10: 58.2
Mar-16: 59.9

Source: Bureau of Labor Statistics

Using detrended real GDP per adult and total employment per adult, there have been two elections since Truman was elected in 1948 that appear to contradict my economic improvement hypothesis—the Nixon election in 1968 and the Obama reelection in 2012. Both of these elections appear to have had very strong extraneous factors at work. For Nixon’s success, the huge outrage against Johnson’s handling of the Vietnam War could well have overpowered the seemingly good economy and for Obama in 2012 a high racial sensitivity quotient could also have tipped the scales. If anything, today the war and racial sensitivity issues operate against the Democrats.

What I beg you to look at carefully are the virtually identical precipitous drops in the economy immediately preceding the Presidencies of Ronald Reagan and Barack Obama and the totally opposite results during their respective Presidencies. I just can’t see how a pro-Obama candidate can win in 2016.

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