STATE PRODUCT | Few Thrived Under Bush 43

As the Democratic Administration wrestles with huge U.S. economic problems, elected officials can take comfort in the fact that they have an easy act to follow.

The numbers are in, and under Bush 43 only four U.S. states beat the average long-term growth rate.

The four "winner" states that did better than the long-term U.S. per-capita average annual growth rate of 2.5 percent were North Dakota, New York, Louisiana and Montana. (Louisiana wins on a technicality as is explained below.) The other 46 states grew at less than the long-term average growth rate.

The numbers are through 2007, but we know that 2008 was a recession year, so the final numbers by state will be worse.

The state records are on two charts prepared by my friend Professor Jurgen Brauer of the James M. Hull College of Business at Augusta State University in Augusta, Ga. His numbers are from the St. Louis Fed's FRED database, which vacuums population data from the U.S. Census and Gross State Product (GSP) data from the Bureau of Economic Analysis.

With Prof. Brauer's permission I am using his chart showing average annual real growth in per-capita GSP during the first seven Bush 43 years.

Among the top ten losing states, two showed negative annual per-capita GSP real growth during 2001-2007 (2000 being the base year): Michigan and Georgia. The next eight states all had real growth of less than one percent: Indiana, Colorado, South Carolina, Missouri, Ohio, Alaska, Illinois and New Hampshire. Professor Brauer observes:

Two of the bottom five states in real per-capita GSP average annual growth rates switched from “red” to “blue” in the November 2008 presidential elections.

On the upside, the top state in per-capita GSP real growth was North Dakota, with annual growth of about 3.5 percent. The next nine states were all in the 2-3 percent range on per-capita real growth: New York, Louisiana, Montana, Vermont, Oregon, Maryland, South Dakota, Iowa and Alabama. Professor Brauer adds:

Only four states in the nation beat the long-term per-capita average annual growth rate for the United States of 2.5 percent since the late 1920s. Louisiana is an anomaly for its growth is at least partially explained by the exodus of poor residents following Hurricane Katrina so that the improvement in its average growth rate for the remaining residents is a statistical fiction.

Prof. Brauer's second chart shows the state-by-state per-capita value of economic production in 2007.
The top ten states by per-capita GSP in 2007 are Delaware ($56,500 GSP per capita), Connecticut, New York, Massachusetts, New Jersey, Alaska, California, Virginia, Minnesota and Colorado (the District of Columbia is not included).

The bottom ten states are Mississippi (less than $25,000 GSP per capita), West Virginia, Arkansas, Montana, South Carolina, Oklahoma, Alabama, Idaho, Maine and Kentucky.

Should the weak economic performance of the states during the 2001-2007 years be a surprise?

Michael Kinsley, writing in the Washington Post in 2005, concluded that the Democrats did better since 1960 on the Republican ("Daddy"-party) criterion of economic prosperity.

From 1960 to 2005 the GDP in year-2000 dollars rose an average of $165 billion a year under Republican presidents and $212 billon a year under Democrats. Measured from 1989, or measured with a one-year delay, or both, the results are similar. [On the] average annual rise in real per-capita income, Democrats score about 30 percent higher.

Bush 43 did not reverse this weak economic record.

Obama Fundraising a First, Says Election Commission Chairman

Thanks to Congressional Quarterly for noting today ("Obama’s Operation May Become the Model of Fundraising") the comments of former Federal Election Commission Chairman Bradley A. Smith in a Washington Post op-ed piece a week before the election.

Brad Smith was commenting on the fact that the campaigns of both Barack Obama and John McCain had exceeded $800 million in combined spending two weeks before Election Day. The CQ story emphasizes that "It’s not just the amount of money that was spent but also the way it was raised — much of it online, in small chunks and, in Obama’s case, completely independent of the public financing system for the first time in the post-Watergate era."

Smith, in his op-ed, says: "I’ve studied all the great fundraisers of the past, from William McKinley to Richard Nixon to George W. Bush. American politics has never seen anything remotely like this before.”

Smith is overtly partisan - he was a Republican appointee. The online discussion of Obama's citizen "juggernaut" is all the more interesting. He thinks the system has worked, even though his candidate was losing. Here are some excerpts.

Arlington, Va.: Just to counter some of the paranoid posts -- I'm one of those small donors that you fear so much. In <> early September I became so disgusted with the McCain/Palin campaign that I went to Obama's Web site and made a donation. I since have made two additional donations. All three were responses to something that was said by the McCain/Palin campaign. In all I've given less than $100. I was born in the U.S. and have lived here all my life, and despite various Republican's claims I'm not a communist or anti-American. I'm just a regular person who has every right to vote and to support a candidate with my time and money.

Bradley A. Smith: I wish more people thought like you -- not your support for Obama ;-), but regarding your motives for supporting Obama and your willingness to back up your beliefs.

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Reston, Va.: McCain keeps saying that Obama is trying to buy the election. Isn't it more like the citizens are? They're the ones contributing the money.

Bradley A. Smith: Right on!

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Wilmington, N.C.: "Former FEC chairman." Given your obvious political leanings, I must say I find that very disturbing. Is that a partisan political post? Should it be?

Bradley A. Smith: The FEC has six commissioners, with no more than three from any one political party. Four votes are needed for most action. So one party can't dictate outcomes. I found that the Commission worked pretty well. But you've really hit the nail on the head -- how can you maintain over time a truly unbiased political police? That's why I generally would deregulate the system, or at least start in that direction. We need separation of campaigns and state, you might say.

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Maryland: The other day a friend and I were having a friendly argument. He was saying there should be more rules to limit how much a campaign can spend because $200 million is outrageous. I said "$200 million is rock-bottom cheap for a good presidential administration!" It's just a fifth of a billion dollars -- compare that to the cost of the Iraq war. Just saying.

Bradley A. Smith: You are right. Political spending needs to be kept in perspective. Americans will spend about $12 billion on potato chips this cycle. Coca-Cola will spend more on advertising this year than will be spent by all the candidates who have run for president combined. Auto makers will spend more than twice as much this year advertising cars as all political spending for federal office. It cost money to communicate, whether you are talking about cars, cola or politicians.

"Happy Days Are Here Again" Again

On April 6, I noted the McLaughlin Group was guilty of anachronism, playing "Happy Days Are Here Again" in relation to the brokered 1924 Democratic convention:

The problem with McLaughlin's "home video" (as guest Mort Zuckerman described it with a touch of sarcasm) of the 1924 convention is that the background music is the "Happy Days" theme. It couldn't have happened. The music for this song was not written by Milton Ager until 1929. The lyrics by Jack Yellen start: "Happy days are here again, The skies above are clear again, So let's sing a song of cheer again, Happy days are here again."

Now it's August 30, after the Denver Democratic convention gave us the Obama-Biden ticket. I get this nice note from WS in Colorado:

I enjoyed reading your piece about "Happy Days Are Here Again." I'm old enough to remember hearing it when FDR ran against my friend Alf Landon in 1936. I read recently that use of that tune for FDR's campaigning against Hoover was a fluke... selected by accident. FDR, it is reported, didn't like it at all. I'm unable to find the source of that now however. (Like Harry Truman couldn't stand "The Missouri Waltz." Nixon didn't know this when he visited him in Independence and played it on the Steinway that Truman had brought from the White House.)

Steven Neal's book, "Happy Days Are Here Again" confirms the FDR campaign theme song - now used as a theme song for the Democratic Party - was a substitute for "Anchor's Away", originally selected because FDR had been Assistant Secretary of the Navy but then deemed insufficiently stirring for the Chicago conventioneers.