Thursday, December 1, 2011
Setting the record straight: The truth about business investment under Obama
We've heard this pat line over and over again, that Obama is "anti-business." The president's detractors say that his anti-business views along with his regulatory excess (is this even true?) are the reason that businesses are not investing. They state it as if it is fact...businesses are not investing.
Is this really true?
I will once again examine this claim. The charts below have been constructed from data from the Bureau of Economic analysis.
Chart 1. Real Total Business Investment (billions $)
This first chart shows that total business investment under Obama beat Reagan, Bush 1 and Bush 2. And you can see that both Bush's--Republicans--were negative, by the way. Only Clinton beat Obama and that was over a period of eight years as opposed to Obama's three. Clinton also had the benefit of a booming economy, the Internet boom and Y2K. In addition, once Clinton started running surpluses, business investment slowed considerably. That's not evident necessarily in the chart, but it is upon examination of the data.
Chart 2. Real Growth in Business Investment compared to growth in GDP
The second chart is even more eye-opening. It shows that the growth in business investment relative to the growth in the economy has NEVER BEEN FASTER THAN NOW! (Again, I went as far back as Reagan.) Business investment is surging as a percent of GDP. In Obama's three years in office, the growth in business investment has been more rapid than Reagan, Bush 1, Bush 2 and even Clinton!
Let me be clear, I am not here to champion or support Obama. There are lots of things that this president is doing wrong--terribly wrong--and I was among the first to point out his hard-core neo-liberal leanings. I spoke about it way back in 2008 when he first selected his economic team.
However, let's call a spade a spade. The claim that businesses are not investing under Obama because of his "anti business" attitude is PURE BULLSHIT!! The numbers speak for themselves.