So a couple of days ago, I discussed Ronald Reagan and the economy because many Americans are under the impression that life was better under Reagan. I discussed real GDP per capita per year and found that Ronald Reagan wasn’t the best, nor even the second best. He was the third best president if we look at this economic indicator. So, today, I would like to get into something a little more personal than the GDP. Let’s look at real income.
Real median income is median income adjusted for inflation.
Just from the naked eye, we can see that it looks as if real median income took off during the Kennedy/Johnson administrations. Americans also did well during the Clinton and Reagan administrations. Again, if we look at real median income per capita per year, we come up with exactly what the naked eye is seeing in the above graph. John F. Kennedy/ London Baines Johnson came in first with 3.48 percent per year. Bill Clinton came in second with 2.49% per year. Finally, Reagan came in third with 2.45% per year.
So with these two real world measures of the economy, Reagan doesn’t come in first or second. He was the third best president in the last 50 years with regards to economic performance. Third. (Check some more facts in the book Presimetrics.)
For more than 20 years we’ve heard about the greatness of Ronald Reagan and his economic policies. According to those who believe, everything was better under Ronald Reagan. The sunshine was brighter. Oranges were tastier. Jobs were more plentiful. People sang and danced in the streets as if in a musical. Well, the ’80s were good, but they weren’t great.
Yesterday, I revealed the unemployment rate over the last several decades. The one thing that jumps out is that during Ronald Reagan’s presidency the unemployment rate was higher than at any other time in the last 40 years. Conservatives continue to point to Ronald Reagan as an economic guru. So, I thought I would look up the GDP since 1960. Since our gross domestic product (GDP) is somewhat related to our population, it’s not fair to compare the GDP of the 1960s with the GDP of today. Our population is much bigger. Therefore, we should standardize GDP by looking at gross domestic product per capita. Also, we need to take inflation into account. So, this would be the real GDP. Finally, to make it fair, we should look at gross domestic product per year. Got it. Real GDP per capita per year.
Now we get out pencil and paper. The John F. Kennedy/Lyndon Baines Johnson administration seems to have an annualized growth rate of 3.48%. Bill Clinton seems to have an annualized growth rate of 2.49%. Ronald Reagan seems to have an annualized growth rate of 2.45%. (More explanation of real GDP – http://faculty.hacc.edu/jhuang/econdata/htm/rgdp_pc/rgdp_pc.htm) So it looks as if the economy didn’t do its best under Reagan. Instead, it did its best under Kennedy/Johnson. Second to note is the much aligned Bill Clinton. So, when conservatives are telling me that the economy did better under Reagan, I’m not sure that the data support that notion.