In this thread Hentor the Barbarian makes the claim (again) that the data is incontrovertible…that the economy prospers more under Dem’s than Republican’s. What’s the Straight Dope on this? Is it as cut and dried as he is making it out to be (well, his sources)? Does the economy prosper more under Democrats than Republicans? If so why (please keep the answers GQ)? Policy? If not how does reality differ from Hentor’s cites assertions? Help me to understand the reality here please.
It should also be noted that the eRiposte website has not been updated since 2004, so it does not include the full measure of the Bush economy. I think it’s safe to say that the indicators will not change in favor of Republicans when the last four years are included.
It does seem to be true, in general. But Republicans tend to run up he national debt and spend large quantities of money on the military. So it’s hard to say whether Supply Side Economics doesn’t work or if the benefits are being lost in government overspending and excess borrowing.
If the argument is about which party’s Presidents approve more spending, then there is a legitimate point to be made (though obviously the Congress variable is still pretty important).
But if the argument is about overall economic prosperity, then this exercise is just silly.
We’re talking about (for large parts of the sample) ten Presidents, who all had pretty unique economic circumstances. Does anyone really think that 9/11 or the internet boom were largely a result of the policies of the administrations in which they occurred?
And even if you get past the fact that outside factors probably account more for economic effects than federal policies, you still have to deal with the fact that the President is only one part of the equation. What about Congress? A sensible comparison would look at times when one party controls both branches, but obviously this would reduce the sample size to an even more insignificant size.
And even if you get there, you still have to assume that economic policies tend to effect the economy immediately, and not several years down the line (for most of the statistics).
That’s why I asked…it’s too complex an answer for my 2 semesters of college economics. I was hoping that some of the real economics types here on the SD could tackle the question and give an answer that would be meaningful to someone like me.
Another thought would be that, if you look at this graph of GFP average growth per year, and compare that to presidents:
R 2001-2008 2.188%
D 1993-2000 3.725%
R 1989-1992 2.125%
R 1981-1988 3.425%
D 1977-1980 3.3%
R 1975-1976 2.55%
R 1969-1974 2.883%
D 1964-1968 5.2%
D 1961-1963 4.267%
R 1953-1960 2.938%
D 1945-1952 1.388%
D 1933-1944 9.175%
R 1930-1932 -9.333%
Starting with Nixon, the average rate of growth per presidential term hangs around 3%. WAG but this makes sense since this is when we left the gold standard.
Midway through Reagan’s term the rate of growth per year stabilizes around 3% and recessions become significantly less prevalent until present day. I’m not sure what this is due to. Possibly this could be due to Alan Greenspan coming in to run the Federal Reserve and bringing in monetarism. I’m not sure you can really thank Reagan for this so much as Milton Friedman.
Hoover/Roosevelt’s -9% to +9% switchoff can probably be marked off to simple blundering about before economic theory had much basis in anything. To a large extent, possibly anything pre-Monetarism could be, given the level of noise pre-1987. Really the only stable growth period pre-1987 is under JFK/LBJ (1961-1968). I myself would be interested in knowing what they did. Otherwise, I wouldn’t say that the president nor his party seems to have a large effect on the rate of growth. Democrats are (outside of LBJ) mostly just lucky to have had the period of rebuilding following WWII and Republicans unfortunate to have had the Great Depression and neither of them are particularly to blame nor thank for these.
Somewhat of an addendum to previous post, but it appears that the main thing credited to economic growth under JFK/LBJ is their 1964 tax cut for the wealthy. This cut probably didn’t start having any effect until 1965. So essentially what is hailed as the greatest economic achievement under JFK is something that entirely fails to explain the positive economy during his tenure, since it happened two years later. So when it comes to cases like that, should you chalk it up to the guy before him (Eisenhower)? Should you say that it happened external to the office of the presidency? Or should you say that what is commonly hailed as the major thing the president did actually minor and there’s something else he did which is being ignored?
Either way, I would vote that the only thing which can be said with any certainty is that Fiat Currency and Monetarism/The Federal Reseve are the only two things that are likely to have had a major effect on the economy. The president, not so much. And while placed by Republicans, both of those, is that really thanks to the president? Or were those things that were just due to arrive at that particular moment in time and the Reps got lucky?
And of course note that Monetarism and Fiat currency didn’t increase growth. They appear to have just stabilised the system.
No, the argument is about specific economic indicators. Here are the ones provided by various sources and collected in the linked table:
Average Ranking for highest GDP growth, real disposable personal income, employment/unemployment, deficit reduction 1953-2001; Real Disposable Personal Income Growth per year 1953-2001; Employment gains per year 1953-2001; Unemployment: 1962-2001; Unemployment: 1947-2001 Assuming that each President’s policies took effect 1 year after his inauguration; Unemployment: 1948-2001 Assuming Presidents are also responsible for economic performance 3-5 years after they leave office; Average After-Tax Return on Tangible Capital: Jan 1952 - June 2004; GDP growth: 1962-2001; GDP growth: 1948 – 2001 Assuming Presidents are also responsible for economic performance 3-5 years after they leave office; GDP growth: 1930-2000; Inflation: 1962-2001; Inflation: 1948-2001 Assuming Presidents are also responsible for economic performance 3-5 years after they leave office; Percentage growth in Total Federal Spending: 1962-2001; Percentage growth in Non-Defense Federal Spending: 1962-2001; Non-defense Federal Government Employees: 1962-2001; Yearly budget deficit: 1962-2001; Increase in National Debt: 1962-2001; Annual stock market return: 1927 (through) 1998; Annual stock market return: (1900) 1927 – 2000; Annual stock market return: (1900) 1927 – 2000; Annual stock market return: (1900) 1927 – 2000 Rankings for highest GDP growth, biggest increase in jobs, biggest increase in personal disposable income after taxes, biggest rise in hourly wages, lowest Misery Index (inflation plus unemployment), etc. (until 2001)
It doesn’t seem very silly to observe that across all these economic indicators, and any others that I’ve seen (like Larry Bartels work) Democrats perform better.
We’re talking about between 50 and 100 years of data. Yes, each president experienced unique economic circumstances and responded according to their preferred economic policy. If you want to argue that Democrats experienced more favorable externalities, I’m all ears. I think it’s quite silly to argue that presidents do not influence economic conditions.
Actually, we’ve looked at those data a bit on these boards here as well. They don’t favor Republicans, and that will be even more the case with data that includes Republicans recent performance.
As you note, when lag time is accounted for, the effects continue to favor Democrats. If you want to argue that point empirically rather than speculatively, I’d love to see the outcome.
I think it holds up rather well to speculative hand-waving.
Pointing out reasons to doubt the conclusion you draw from economic indicators is not a “speculative argument.” There is more to quantitative analysis than correlating some numbers with another variable. Matters of alternative causation, and failures of assumptions within your model of causation are perfectly fair game in empirical argument.
The numbers are so close, that it only requires you to shuffle a few things around to contradict your conclusion. Take credit away from Clinton for the internet boom, or give credit to Eisenhower for JFK’s early expansion and your conclusion is toast. So the burden is on you to show why we should credit those things to the Presidents under whom they occurred.
Yes, I also think that straw man is quite silly. What isn’t silly is the notion that presidents play only a partial role in the government (alongside Congress and the appointment of the Fed), and that the government itself also only plays a partial role. In fact, those are facts rather than the speculation you mistakenly characterize them as. Since your study totally fails to account for even which party controlled Congress, it is a weak argument.
Either lag time is an important variable to consider or it is not. If, as you appear to concede, it is important, then we should be ignoring the variables that do not consider it. Instead, you think you can throw out a bunch of stats (which you quote at the top of your post as evidence of the strength of your position) even though only some of them cover a significant period, only some of them account for lagtime, etc.
Tell me, from 1930-1999 (the period your statistics cover), for how many years did the Republicans control both Congress and the presidency? And which President was that?
Okay, at this point I’m wondering if you are trying to be Socratic, rhetorical, sly, or pointless. Want to cut to the chase? Otherwise, I recommend Google.
Democrats controlled one or both chambers of Congress from 1931-1994. Of course, the federal government affects the nation’s economy in myriad other ways, including monetary policy, trade policy, and economic regulation. But many of those factors either extend across administrations (economic regulation and trade policy in particular), or also affected by the party that controls Congress. So generalizations based on whose party controlled the presidency are undermined by the Democrats 20th century dominance.
And, this critical congressional variable, is but one of several critical factors ignored by an analysis which merely matches up various economic indicators with which party controlled the presidency. You’ve not argued, for example, why you think Clinton was responsible for the internet boom of the late 90s.
Your argument would be stronger if you explained what presidential actions and initiatives you thought were responsible for various changes in the economy. As I think you’ll quickly realize, there is much debate to be had when it comes down to the details. But if the details are so complicated, why would you think that an overarching generalization that ignores the details would be more likely to get at the truth?
