New Figures Show '92 Economy Was More Robust than BelievedBy Robert A. Rosenblatt and Greg Miller
Los Angeles Times
Economic growth was far more robust during the final year of George Bush's presidency than previously reported, and the 1990-1991 recession was much milder than generally believed, the Commerce Department said Tuesday.
The changed numbers, which represent a more accurate survey of activity at the nation's retail stores and shopping malls, as well as updated corporate tax returns, show that consumer spending was substantially more buoyant in the months preceding Bush's defeat in November 1992 than believed at the time.
Viewed alongside other new Commerce Department figures showing economic activity this year, the revisions overturn conventional beliefs about the nation's economy under Bush and the man who defeated him, President Clinton. Instead of showing an economy improving rather steadily from the 1990-91 recession, the latest numbers indicate that the economy rebounded sharply under Bush and has slipped back to a much slower rate under Clinton.
"It clearly shows that the perception is more important than the reality, that spin control is more important than the actual number," said Martin Regalia, chief economist at the U.S. Chamber of Commerce.
The economy in 1992 "was doing significantly better than the Democrats were saying, but then the Democrats quit saying that the minute Clinton got elected," Regalia noted.
Michael Penzer, senior economist at Bank of America in San Francisco, said, "There must be people in the White House this morning (saying), `Thank God these numbers weren't released during the election.' "
The revised numbers show that the nation's output of goods and services grew 3.9 percent from the fourth quarter of 1991 to the fourth quarter of last year, substantially higher than the original figure of 3.1 percent. The 3.9 percent growth was the highest since a 5.1 percent rate of expansion in 1989, though still well below the highs of 8 percent in the boom years of the mid-1980s.
During the recession, which ran from July 1990 through March 1991, economic output -- formally called the gross domestic product, or GDP, -- declined at an annual rate of 2.1 percent, a slump far less than the earlier estimate of 2.9 percent.
Commerce officials emphasize that the revisions, some of which are among the biggest ever made by government statisticians, are based on more precise data than was available when the initial announcements were made. In particular, they reflect the increased role that discount superstores and mass merchandising outlets play in the retail market.The new numbers also demonstrate the limited ability any president, whether Democrat or Republican, has in significantly changing the direction of the economy. They also highlight the risk involved.
"It really makes the implementation of any kind of economic policy extremely hazardous in the sense that the numbers on which the policy are based are often wrong and subject to substantial revision," said economist Norman Robertson, an adjunct professor at Carnegie-Mellon University in Pittsburgh.