Making Sense of Economic Data

For years pundits have argued which years have been the best or worst in our nation’s economic history. Pundits have argued which president led our economy through the best or worst times. Today, we continually hear the Obama administration claim we are going through the worst recession since the Great Depression. Is this true?

To answer these questions I have tried to compare our economic strengths and weaknesses annually from 1930 to the present. I have combined yearly unemployment, inflation, federal budget levels, federal debt levels, and our gross domestic product (GDP) into one metric or figure of merit. These are arguably the most critical yearly statistics to measure an economies wellness or sickness. The data is fitted into a normal distribution curve and ranked in order from best to worst economic years.

The presidential administrations from 1930 to the present ranked as follows (ratings are in brackets []. Each of 81 years is ranked 1 through 81. The ranking indicates the average yearly ranking for each administration.): first, Lyndon Johnson (LBJ) [5]; second, John Kennedy (JFK) [13]; third, Dwight Eisenhower [17]; fourth, Richard Nixon [19]; fifth, Bill Clinton [33]; sixth, George W. Bush [37]; seventh, Ronald Reagan [38]; eighth, Gerald Ford [47]; ninth, George H.W. Bush [48]; tenth, Jimmy Carter [54]; eleventh, Franklin Roosevelt (FDR) [62]; twelfth, Herbert Hoover [67]; thirteenth, Barack Obama [68]; fourteenth, Harry Truman [72]. This data can be misleading because it does not account for trends. For instance, Eisenhower could be credited with stabilizing the economy that benefited JFK and LBJ. Reagan was responsible for getting the Carter mess under control. And yes, although George W. Bush is ranked 6th, the economic status under his guidance got worse each year. Thus, he could have benefited from Clinton’s leadership and could be responsible for hurting Obama’s numbers.

The top 10 years according to this statistical average are as follows: 1. 1953 (.994); 2. 1955 (.986); 3. 1965 (.971); 4. 1964 (.960); 5. 1967 (.958); 6. 1966 (.957); 7. 1944 (.916); 8. 1968 (.903); 9. 1962 (.900); and 10. 1959 (.889). The ratings in parenthesis are a percentage as to where each year lies in the normal distribution curve. A rating of 0.50 is average, and any number higher than that is above average and any number lower than that is below average. The 10 worst years are as follows: 1. 1946 (.010); 2. 1945 (0.12); 3. 1948 (.028); 1934 (.050); 5. 1933 (.077); 6. 1935 (.087); 7. 1937 (.100); 8. 2010 (.103); 9. 1951 (.119); 10. 1936 (.122). In essence, the figure of merit for 1953 is at the 99.4 percentile while 1946 is at the 1 percentile in terms of economic stability.

Here is a list of each administrations best and worst years. Barack Obama: 2009 (.227), 2010 (.103); George W. Bush: 2001 (.719), 2008 (.314); Bill Clinton: 1998 (.837), 1993 (.350); George H.W. Bush: 1989 (.525), 1992 (.334); Ronald Reagan: 1986 (.741), 1981 (.274); Jimmy Carter: 1978 (.452), 1980 (.194); Gerald Ford: 1973 (.638), 1975 (.269); Richard Nixon: 1972 (.839), 1970 (.663); LBJ: 1965 (.971), 1968 (.903); JFK: 1962 (.900), 1961 (.738); Dwight Eisenhower: 1953 (.994), 1958 (.410); Harry Truman: 1952 (.858); 1946 (.010); FDR: 1944 (.916), 1934 (.050); Herbert Hoover: 1931 (.222), 1930 (.130).

I will post the entire results of this analysis in my next blog post.

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