The presentation discusses the economic advantages of Democratic presidents over Republicans, highlighting faster economic growth, better job creation, and superior stock market performance under Democrats. It critiques Republican economic policies, particularly healthcare proposals that disproportionately benefit the wealthy and result in substantial coverage losses. Additionally, it emphasizes the growing wealth inequality in the U.S., showing that the top 1% hold a significant portion of the nation's wealth while many households struggle financially.

1. Conducting an
Economic
Intervention:
Slides for
Deprogramming
Conservatives
David Doney CPA
July 2017
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Purpose of this Presentation
Your dilemma
 Facing a Fox News quoting parrot?
 Trying to help your Conservative friends and family get back to fact-based reality?
 Sharpening your argument against economic claims you know are false?
You’ve come to right place
 Fact-based, authoritative information in graphical form for easy communication
What the facts tell us
 The economy performs better under Democrats (growth, jobs, and stock market)
 Republican 2017 health care proposals are giant tax breaks for the rich and benefit cuts for the poor
 Unregulated markets often lead to oligopoly and monopoly, which hurt consumers
 We’re the richest we’ve ever been as a country, but have a serious distribution problem
 Obama made progress reducing inequality, but not enough to reverse the post-Reagan era shift
 And much more…

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1. Economy Grows Faster Under Democratic Presidents
Sources:
The Economist “Timing is Everything: Why the economy has grown faster under Democratic presidents” (August 2014)
https://www.economist.com/news/united-states/21611143-why-economy-has-grown-faster-under-democratic-presidents-timing-everything
The Economist: “Since the second world war the economy
has done better under Democratic presidents, who have
overseen more job creation and higher stock market returns
than Republican leaders. During this time the economy has
grown about 1.8 percentage points faster when a Democrat
occupies the White House…”

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2. Job Creation is Higher Under Democratic Presidents
“Since 1961…the Republicans have held the White
House 28 years, the Democrats 24,” said Bill
Clinton in 2012. “In those 52 years, our private
economy has produced 66m private-sector jobs.
So what’s the jobs score? Republicans 24m,
Democrats 42m.”
Obama added +8m to this lead 2013-2016, so the
score now is 50m to 24m, with equal numbers of
years in control of the Presidency.
Sources:
The Economist “Timing is Everything: Why the economy has grown faster under Democratic presidents” (August 2014)
New York Times: “How Obama’s Job Record Stacks Up” (January 6, 2017)
50
24
Job Creation Total (Millions)
Democrats Republicans

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3. Stock Market Does Better Under Democratic Presidents
Sources: CNN Money “Democrats vs. Republicans: Who’s better for stocks?” (October 28, 2015)
S&P 500 Annual Returns
Since 1945, the average annual stock market gain under a
Democratic president is 9.7%. Under a Republican president, it's only
been 6.7%.

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4. Unemployment Rates Improve Under Democrats, but Rarely for Republicans
Source:
New York Times: “How Obama’s Job Record Stacks Up” (January 6, 2017)
 All of the Democrats saw the unemployment rate
drop or stay the same, comparing the start and
end.
 The only Republican that presided over a lower
unemployment rate at the end of their term vs.
the beginning was Reagan.
R
D
R
R
R
R
D
D
D
D

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5. Republicans Cut Taxes for the Rich, Democrats Raise Taxes for the Rich
 Clinton raised tax rates for the top 1.2% of
earners in 1993.
 The Bush tax cuts were in 2001 and 2003.
CBO estimated the revenue decline (debt
increase) at $1.5 trillion from 2002-2011. The
top 1% got about 20% of the benefit.
 Obama raised income tax rates on incomes
over $400,000 ($450,000 for couples), a
partial expiration of the Bush tax cuts.
 Obama added 0.9% to the Medicare payroll
tax for incomes over $200,000 ($250,000 for
couples) as part of Obamacare.
 Obama added a 3.8% surcharge on net
investment income as part of Obamacare;
90% of this tax is paid by the top 1%.
 These Obama changes were effective in 2013.
Clinton
Obama
Bush 43
Source: CBO: “The Distribution of Household Income and Federal Taxes, 2013”
https://www.cbo.gov/publication/51361
Reagan

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6. Raising Taxes on the Rich and Cutting Defense Spending Created Surpluses 1998-2001
Bill Clinton raised tax rates on the rich in 1993 and cut defense spending. The economy boomed.
Conservatives try to cut tax rates for the rich and increase defense spending, ignoring this lesson.
Source Data: CBO Historical Tables. For example, income tax revenue increased from 7.5% GDP in 1994 to 9.4% GDP in 2001, a 1.9% GDP increase.

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…to provide a tax cut almost entirely for the rich.
 Top 6% (income over $200,000) receive 70% of the benefits
 Income over $1 million (top 0.4%) receive 46% of the benefits
 Those earning under $50k incur a net cost, on average
Source: Tax Policy Center “Who gains and who loses under the AHCA?” (March 2017)
Millions Lose Health Insurance under Republican
proposals (AHCA, BCRA)…
 20+ million fewer covered vs. Obamacare
 Most of the losses would be from Medicaid
$5,680
7. The Republican Healthcare Proposal is a Huge Tax Cut for the Rich
Source: NYT “The CBO Did the Math. These are the Key Takeaways from the Senate Healthcare Bill” (June 26, 2017)

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8. Eliminating Tax Breaks for the Top 20% Might Balance the Budget (For a Few Years)
What are Tax Expenditures?
 Preferential rates, exclusions, deductions, and tax credits
that cause revenues to be much lower than purely
applying tax rates.
How much are they, and who gets them?
 Tax expenditures were forecast at $1.5 trillion in 2017
 The top 20% get 51%, or $750 billion of the benefit
 The top 1% get 17%, or $250 billion of the benefit
 Top 20% earn > $110,000 income; top 1% > $400,000
 For scale, the budget deficit in 2017 will be about $600
billion
Examples include:
 Preferential rates for capital gains and dividend income
 Exclusion of capital gains on assets transferred at death
 Excluding 401k contributions from income (deferring)
 Exclusion from employee income of health insurance
premiums paid by employers
 Deductions for state and local taxes
 Deduction of mortgage interest
Sources:
CBO “Budget and Economic Outlook 2017-2027”
CBO “The Distribution of Major Tax Expenditures in the Individual Income Tax System”
17%
51%

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9. Conservative Deregulation / Unregulated Markets Hurt Consumers
Source: The Economist: “Whack-a-passenger: A lack of competition explains the flaws in American aviation” (April 22, 2017)
Source: White House Council of Economic Advisors: “Benefits of Competition and Indicators of Market Power” (April 2016)
Deregulation can hurt consumers
 Unregulated markets (e.g., lack of anti-trust enforcement) result in mergers and
acquisitions that help corporate profits (and rich investors) at the expense of
consumers.
 This is because competitive markets (the best situation for consumers) become
oligopoly or monopoly, meaning a few powerful firms can increase profits while
offering lower service.
U.S. Airline Example
 The top 4 carriers in the U.S. control 80% of the market, vs. 48% a decade ago. In
Europe, the top 4 have 45%. Industry concentration is increasing in many U.S.
industries.
 “Air fares are higher per seat mile in America than in Europe. When costs fall,
consumers in America fail to enjoy the benefits. The global price of jet fuel—one of
the biggest costs for airlines—has fallen by half since 2014. That triggered a fare war
between European carriers, but in America ticket prices have hardly budged. Airlines
in North America posted a profit of $22.40 per passenger last year; in Europe the
figure was $7.84.”
 “Standards of service are also worse. Only one operator based in America can be
found in the world’s 30 best carriers…”

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10. Obama’s Economic Record is Impressive
Source: NYT / “2016 in Charts…” (January 3, 2017)
Most of the debt increase was due to the financial
crisis and recession, which started under Bush.
Conservative deregulation of banking was a primary
cause, as investment banks were not subject to
meaningful regulation and took immense risks.

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11. Considering Circumstances, Obama Added Less to National Debt than Bush 43

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12. We’re Close to Full Employment and Incomes are Recovering
CBO estimated in January 2017 that we’re about 1.6 million
from full employment…
Source: CBO Budget & Economic Outlook 2017, Federal Reserve Economic Data (FRED)
…while real median household incomes were back to pre-
recession levels by the end of 2015 (latest available). Results
in 2016 should be even better based on early indications.
Note: 1.6 million is about 1% of the workforce Note: Recall that 2000 and 2007 were bubble economies.
Contrary to Trump’s doom and gloom…

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13. We’ve Never Been This Rich, But We Have a Distribution Problem
Household net worth continues to surpass records,
reaching $94.8 trillion in Q1 2017 (about $730,000 /
household on average) due to both financial and real-
estate asset price increases…
…However, the average is misleading due to highly skewed
wealth distribution. The top 1% have approximately 42% of
the wealth. The bottom 50% of families average about
$11,000 net worth. This inequality is a feature of
conservatism. Historically, only active government
redistribution and pro-labor policies prevented this result.
42%
Fed Governor Lael Brainard – May 22, 2017: “The results of the 2016 SHED [Fed Study] show that nearly one-fourth of all households are unable to pay their current month's bills in full, nearly
one-third would rely on borrowing or selling something to cover a $400 emergency expense, and one in eight would not be able to cover a $400 emergency expense by any means. Over half of
households lack savings to cover three months' expenses if they lost their main source of income…On average from 1989 to 2013, about 80 percent of households in the bottom quintile of the
income distribution had less than $3,000 adjusted for inflation in liquid assets (cash, checking, or savings accounts). Even among households in the middle quintile of income, about half do not
meet this threshold for liquid assets.”

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14. Obama Pushed Back Against the Post-Reagan Rightward Inequality Shift
“The Left”
Pro-Labor (Workers)
Liberals / The 99%
“The Right”
Pro-Capital (Owners)
Conservatives / The 1%
The Rightward Shift President Obama made progress in shifting the
country back to the Left measured between 2007 to
2015, partially offsetting the long-term trends.
Republicans transfer as much wealth upward as
Democrats allow.

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15. Republican politicians tell falsehoods more often than Democrats
Politifact: The politicians running in the 2016
Presidential election with the most falsehoods were
all Republican, measured 2007-2015.
Tax cuts for the rich and spending cuts for the poor
aren’t popular, so Republicans often create falsehoods
to cover for them, such as “income tax cuts pay for
themselves.” They argue deficits and debt are a
significant problem that justify spending cuts (other
than defense), but this is inconsistent with their
arguments for tax cuts.
President Trump was fond of falsehoods about the
state of the economy, misrepresenting the
unemployment rate and other labor market variables.
Source: NYT Angie Drobnic Holan “All Politicians Lie. Some lie more than others.” (December 11, 2015)

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16. Trump won by getting enough people to vote against their economic interests
Trump’s appeals on social issues (mainly immigration) were
able to convince enough economically liberal but socially
conservative voters (upper left) to vote against their own
economic interests, in key swing states.
Source: Political Divisions in 2016 and Beyond (June 2017)
Lee Drutman / Democracy Fund Voter Study Group