Bush Boom, Clinton Boom? Thank the Reagan Boom

As the Bush and Clinton camps debate the strength of the economy under their respective administrations, economist Larry Kudlow cuts to the chase: “Since the early Reagan years, we have had 25 years of virtually uninterrupted prosperity,” Kudlow said. “Because of the Reagan reforms - the deregulation, the lower taxes, the disinflation - we have transformed the economy from a top-down, government-run operation into a free market, capitalist economy with durability and resilience.”That said, the economy is particularly robust at this time, having weathered many small storms with relative ease. Job creation has been particularly strong, unemployment remarkably weak, and overall growth solidly consistent. Perhaps the mood isn’t colored by as much “irrational exuberance” as in the go-go 1990s, but the fundamentals may actually be stronger.

Every expansion has a little different coloration," he said. "The Clinton years were colored by the technology boom and the dot-com boom, which ultimately produced a bubble that burst. The Bush years were colored by the tremendous housing boom from the Greenspan interest rates, and we're undergoing some kind of a bubble bursting right now."

Kudlow said neither Bush nor Clinton have fundamentally transformed the U.S. economy in the way that former President Reagan did a quarter century ago. He credited Reagan's economic reforms for growth in the Gross Domestic Product in 93 of the last 98 quarters.

"Since the early Reagan years, we have had 25 years of virtually uninterrupted prosperity," Kudlow said. "Because of the Reagan reforms - the deregulation, the lower taxes, the disinflation - we have transformed the economy from a top-down, government-run operation into a free market, capitalist economy with durability and resilience."