I realize there is no specific correlation, but, in your opinion, how much of an impact do the president’s policies have on the economy?
What actions can the president take that have a direct affect on the economy, if any? This would preclude any actions that have to be approved by congress.
I answer with a question; How much effect does Ronald MacDonald have on the taste of a Big Mac?
I recall that back in the early 60’s Kennedy’s (Keynesian) economic advisors were totally convinced that they could steer the economy and that the only thing needed to keep the economy smoothly running was an occasional tweak now and then.
Ha!
Starting in the late 60’s through the 70’s and into the 80’s we had inflation.
Since then we’ve had an era of bubbles and busts.
If any presidential administration could control the economy, I’m sure they would.
Are there effective measures to take at the margins? Sure.
But the US economy is a huge beast. Much harder to control than one of those giant ocean oil tankers that can take several miles to stop. No, impossible to control with current knowledge and technologies.
There are certainly ways that a president can crash an economy.
For example lobbing a couple of nukes at Iran would do it.
Improving the economy is much harder.
This. The mere fact that he is President may do a little, depending on how much confidence people have in him, but anything else depends on the action he takes.
Good point. I used to say that I didn’t give Clinton much credit for the 90’s boom, but I did give him credit for not screwing it up.
Exactamundo! Downside risk much greater than upside potential.
The President can do a lot of things that impact the economy. Now, say there is an economic downturn, can the President fix it? By and large I’ve never seen much historical evidence that Presidents are very good about fixing an economy once it is already in a recession. President’s can and have passed legislation and promoted programs to make recessions less painful to the country’s citizens, and that in itself helps to serve as a “backstop” for the economy–because individuals receiving 99 months of unemployment benefits and other such things are better for the economy than those people becoming homeless vagrants. At least as unemployment benefit recipients they are still purchasing things and participating in the economy.
Both central bankers and political leaders have at various times believed they could control economic bubbles and smooth out boom and bust cycles. It’s arguable if that has ever really been successful, you have noble laureate economists you can cite on both sides of that debate. However a big problem even if central bankers and political leaders can successfully alleviate bubbles without a resulting bust, it relies on the supposition that these economic and political leaders will correctly identify a bubble before it is too late and that the action they take will be the correct action to avoid a bust. That’s something that historically, I’ve seen a lot of central bankers “miss” large bubbles (Alan Greenspan has admitted he didn’t recognize the housing bubble for what it was until far too late.)
When most people think about the economy doing bad or good they think about either the performance of the equities market or the jobs market. Presidents, through various announcements of policy, can have immediate impact on equities markets. However, the impact is unpredictable. Further, equities markets are just so massive that most of their fluctuations are beyond any effective control of the POTUS.
Aside from direct hiring (which with a government as big as ours isn’t totally insubstantial), the Federal government and the POTUS don’t really create jobs, although every President in my lifetime has touted job creation. Businesses by and large create jobs, and the relationship between political actions and job creation is and always has been murky. Tax policy, regulatory actions, sweetheart trade deals and et cetera can have some impact but a lot of the hiring/firing decisions are made on a fundamental economic level such that a politician helping with more pro-business regulation or with more advantageous tax policy only really helps on the margins.
More than you really want to know.
I’m surprised at the right wing conservative responses. Yes, a President does the best when he gets the hell out of the way of the economy and does nothing. He screws it up when he tries to “improve” it.
Quit talking about raising taxes, quit enacting more environmental regulations, quit enacting back door (health care mandate) taxes, and quit trying to prop it up with artificial stimulation (cash for cars, homebuyer credit). Let the economy grow on its own.
Works marvellously in Somalia, for instance.
Emphasis added.
From the OP:
“This would preclude any actions that have to be approved by congress.”
The bolded items in your post all had to be approved by congress. How about you try reading for comprehension next time?
So I assume you completely disagreed with the Bush tax cuts since those were a direct attempt by the President (via Congress) to “improve” the economy. Or is it just bad when Democrats try to improve the economy?