Agreed.
You can “see” the standard deviation in the tables I gave above.
(You can also calculate it, since all the numbers are there in those tables)
I agree, but I just added him as an “FYI”, with the understanding that his numbers are not final (depending on the “delay”, his term could have another year to go)
I don’t need to calculate them to know they’re going to be rather large…
But did you use those numbers in your summary averages? That’s the real point I was trying to make.
Let me add:
I’ve often expressed doubt on this board that presidents can or even know how to influence the economy. If there a 100 things a president can do, 99 of them probably will hurt th economy or have no appreciable effect one way or the other. I prefer to ask which man is going to keep his hands off the buttons more. But if there were a simply explanation, per the OP, I’d expect it wouldn’t have escaped the notice of people who analyze these numbers for a living.
Furthermore, you’d probablly be better served by looking at the effect that specific policies have, rather than the political party of the executive. For example, Kennedy cut taxes as a Democrat and Bush Sr raised them as a Republican. Nixon, a Republican, imposed wage and price controls.
I hear this claim repeatededly on these boards and elsewhere, but does anyone have an actual cite to some studies that showed this to be true?
Didn’t things like Medicare, Medicaid, Social Security change the economy? Maybe for the better, maybe for the worse, but would today’s economy have been the same if these programs were not in place?
If it were the case that B caused A; that is, the economy influenced the choosing of the president, rather than the other way around, then we wouldn’t see the pattern we’re seeing regardless of whether a president served one term or two. At the very least, you’d have a lot of explaining to do. The economic cycle happened to be four years when a president was elected for one term, but it happened to be eight years whenever a president was elected for two?
I do think it’s likely that people vote the guy out, whichever party, when the economy is perceived as bad, and keep him when it’s perceived as good. But I’d guess that would only be looking at election year stuff - from Q4 of the previous year through quarter 3 of the election year.
Also, the president, although he hasn’t set up a budget in his first year, does influence it. One of the most important factors in creating a good economy is confidence - both consumer confidence and producer confidence. Confidence probably owes more to the president than anything else.
The problem is that there isn’t a good way to show that they DO have significant influence. Lacking that evidence, it only seems reasonable to assume they don’t. I would expect that the Fed Chairman has more influence, and since he is appointed by a president, that might be an indirect way that the latter influences the economy.
It may be that administrations actually do have a significant effect on the economy, but it’s just impossible to figure out why or how. Some actions may take years to have an effect, making a simple causal analysis extremely difficult.
Economics just isn’t an exact science like physics or chemistry. We can’t just call up the experts and find out what they agree on. Even those areas that most economists do agree on (like the idea that free tradebetween countries is good and tarrifs are generally bad) are still subject to the political winds blowing at any given time.
There’s not a good way to demonstrate they have significant influence except what Polerius posted in the OP.
Since the fed chariman has more influence, and he’s appointed by the president, that might be an indirect way way the president influences the economy?
Of course that’s influence! Did you think we’ve been talking about the possibility that the president himself is employing millions of people, or buying stock himself to prop up the stock market? Or setting the prime rate himself?
I think we’ve sufficiently shown that the OP’s methodolgy is flawed.
Ignoring, for a moment, the snarkiness of your remark… There is no guarantee that the Fed Chairman will reflect the political leanings of the president once he’s running the fed. Hence the reference to “indirectly inflluencing”. Also, a Fed chairman typically outlasts the president who appointed him. Hence, trying to correlate the goodness of an economy with a given presidential term is suspect.
You are now welcome to try to develop a corollation between presidential terms and the health of the economy. Good luck.
We have? I think we’ve seen that every counterargument to the OP is flawed.
Yes, good luck to me, because you apparently can dismiss them without finding a weakness. Even when you Polerius allowed for your delayed effect, the results were still there.
Nevertheless, I’ll put together an econometric model tonight using ‘party of president’ as a dummy variable to explain the points on the graph, for both GDP and unemployment rate. It’s not clear to me, as it is to you without calculating it, that the standard deviation is quite large - if you take the party of president into account. And if you don’t, then offering ‘large standard deviation’ as a challenge to the model is absurd.
bup: If you’re able to do what you say you can do, I suggest you publish your results in a peer review economic journal and claim the proffessorship in economics at a prestigious university that is surely your due.
Two points:
1 - The point is constantly hyped by conservatives that, for instance, cutting taxes must be the better strategy because it’s good for business. If you watched Fox’s first investment show at 10 am this past Saturday, you know what I mean. There is, of course, no evidence, on the macro level, that this is true here in the US. Polerius may not have demonstrated to my satisfaction, at least, that Democrats in general are better for the economy, but really all that has to be demonstrated is that they aren’t any worse.
2 - As far as I’m concerned, the best test of whether or not a Prez is good for the economy is whether or not I can make money betting with or against his economic policies. By that test, I made money betting with Clinton, and betting against Bush. So whether or not anyone else may think Bush’s policies are demonstrably better for the economy, or Republicans in general are, I’ve got actual cash that speaks loudly against at least the proposition that Bush is any good at all. For some strange reason, I consider that the best evidence there is. YMMV, of course.
Of course, if this is true then this is a very strong indictment of the current President because he has embarked on what must be the most expensive “economic stimulus” program ever. And, so while he may not have affected the economy, he has obviously affected the government’s fiscal situation.
And, if we are left to conclude that his program isn’t doing much for the economy, then the only justification is that the reduced taxes are a bonus for people as individuals if not for the economy as a whole. Yet, it is well known that this is simply borrowed money that he has given to people. And, worse yet, he has given a huge percentage of it to a very small number of the wealthiest people…And, of course, when pressed on this, the justification is that these people create the jobs. But, of course, that implies that the policies can have a significant effect on the economy, contrary to our assumption.
I don’t see how that follows. Firstly, can you show that he has “embarked on what must be the most expensive “economic stimulus” program ever”?
Secondly, economics is not like physics or chemistry, where we generally know the best answer. We don’t know, empirically, what works, and so it is only natural that we would use whatever theory (untested, as they all are) we think best models the real world.
I won’t defend deficit spending, although it’s not inherently bad. But if you think the free market is best at managing the economy, then shrinking government intake (ie, tax cuts) make sense.
What you call “giving money back” others will call “not taking the money in the first place”. Your assumption seems to imply that the gov’t has first claim on any money that someone might have. I don’t accept that permise.
In the same vein, there seems to be a widely-held assumption that Republican administrations are better for the stock market, as well as being better for the economy in general, but there’s no evidence to support that belief, either. The biggest run-up in the Dow Jones, for example, occurred during the Clinton years. It was flat during the Nixon years. In fact, there doesn’t appear to be any correlation between who’s in the White House and how Wall Street performs.
Well, I said “must be” as an implication that I was in the realm of conjecture. I couldn’t think of any other stimulus package that was nearly so expensive although maybe if you converted stimulus during the Great Depression to current dollars, it would be higher. Of course, what one calls “economic stimulus” may be a bit ill-defined too. But, to put some hard numbers on the current tax cuts between 2002 and 2014:
Total cost of currently enacted tax cuts alone: $1.7 trillion
Additional cost of interest on the above amount: $0.9 trillion
Additional cost to extend expiring provisions of cuts, as Bush wants: $2.4 trillion
Additional cost of interest on extending provisions: $0.5 trillion
GRAND TOTAL out to 2014: $4.1 trillion w/o interest, $5.5 trillion including interest.
You might want to argue that tax cuts all the way to 2014 shouldn’t count as stimulus. Yet, I believe the Bush Administration always tried to make the case that the tax cuts needed to extend out in order for people to have the confidence to make decisions now that would stimulate the economy. (And, if they weren’t for stimulus, what were they for exactly?)
I have no idea what your point is here. You just seem to be begging the question and saying, “Well maybe the President does have an important effect on the economy.” To which, I’d say, “Fine. But that contradicts the assumption that he doesn’t and raises additional questions like whether the amount of economic recovery and job growth we have seen suggest Bush has done a good job and whether the stimulus package was worth the huge price tag.”
Again, you keep moving things around. All of a sudden now, you seem to be saying that the President can have a profound effect on the economy being shrinking government and letting the free market manage it. Fine…We can debate the evidence for this if you’d like but it is a new thesis in contradiction to your previous one.
Well, as long as you are a citizen or resident of this country, then yes, I think the government does have a strong claim on your money. Or, to put it another way, the “price” for the benefits of this society is the taxes that we pay and as a democratic society we decide how the taxes are allocated through the democratic process. You seem to suggest that the “natural” state is that of a free-loader.