(This might be a general question, but it involves politics, so I’ll put it here)
In arguing with my father about Bush’s economic policy, his response has been “well, Presidents don’t have much control over the economy anyway, so you can’t blame Bush for the economy sucking.” (Yes, if that’s true, you can’t credit Clinton with Boom Time).
So I ask those with a greater grasp of economics thanI: how much direct effect does the President have on the US economy through things like his budget?
Obviously, the President affects the company through his other actions (foreign policy), but I’m looking for direct relations here.
What do you all think?
The president along with his congressional cronies …er party members can propose an economic budget that the president can pledge to sign if passed. He may threaten to veto any other budget that doesnt have what he wants in it or if it contains stuff he doesnt want in it. Ultimately it is the congress (senate and House) that creates the budget and approves it.
Now, foreign and domestic policies made by the president aside, it is Mr Greenspan of the Federal Reserve board who monitors the economy and keeps it in check. The president may be the captain but Mr greenspan is both navigator and driver. The president may say “go thataway” but its Mr Greenspan who plots the course, makes corrections, takes status and reports to congress as to what the economy is doing and why.
I agree pretty much w/ Slayer. Presidents shouldn’t get credit or blame for the economy other than their indirect control of interest rates via thei appointed Fed chairman. I could be painting a bit too broad a stroke here, but the Nixon/Ford/Carter legacy of stagflation in the 70s is a good example of NEGATIVE effect and the Reagan legacy of lower interest rates are a good example of POSITIVE effect. Congress really controls the purse strings, so the budget is really their deal.
Tax cuts are usually miniscule relative to the overall economy. But tax policy can certainly influence the psychology of the populace.
I agree with Slayer and John. Presidents have very little (if any) real control over the economy. Presidents’ primary role with regard to the economy is to submit budgets (which make up a small portion of the overall economy, and actually vary little between rescessionary and non-rescessionary years), which are endlessly changed and tinkered with by Congress; and Presidents can influence monetary policy through the Fed.
Having said that, different Presidents can have different amounts of effect on the economy. A President like LBJ that is very effective in getting his legislation through Congress can have more effect than one like Carter that has trouble controlling Congress. Also, the economy is (oddly enough) mostly a reflection of the combined outlook of people about the state of the economy (if everyone thinks the economy is going to go slow down, the start saving money in anticipation of a slump, so the economy slumps). Some Presidents can influence that by making Americans feel good about themselves and their future. I think Reagan and Clinton were good at that.
But overall, I don’t think Presidents have much effect on the economy.
Riiiight. No President is responsibile for the economy.
Except for Ronald Reagan, who rolled out the red carpet for the booming economy experienced during the Clinton years.
And Bill Clinton, who screwed it up for George Bush.
The President affects the economy in so many ways it’s impossible to name them all, from running the executive agencies which supervise and regulate American business to deciding how much profit can be gleaned from the nation’s natural resources to negotiating trade agreements with foreign nations to inspiring investor confidence–or lack thereof–as the nation’s leading citizen.
The idea, more properly expressed, is this:
Democrat Presidents have a universally negative effect on the economy, except when they inherit it from a Republican; Republican Presidents have a universally positive effect on the economy, unless they don’t, in which case they inherited the economy from a Democrat.
And it’s a horseshit assertion used primarily by Republicans to excuse every terrible Republican President since Herbert Hoover.
Well, we never said that a president does not affect the economy. They certainly do create either a feryile field for the economy to grow or they can allow it to languish to wither. President Clinton did the best thing for the economy when he came into office. He left it alone it was doing well without him and he recognized that, but his policies and groundwork started to weaken it which then came crashing when Bush got elected.
Presidents do affect the economy, but they do not control it or create it. With Tax cuts, government projects, more productivity thru easing of regulation and a foreign policy built to promote trade, then the economy is boosted. More regulation, wars and an pretectionist foreign policy tends to slow down the economy, but even with these broad influences, the Federal Board can still fine tune the economy to adjust the negative influences.
A president may have little to no control over the economy, but one would think by word and deed, can influence the economy, at least in the short-term.
President Clinton most certainly did not leave the economy alone. His predecessor did, and it went into the toilet and stayed there.
Clinton proposed an economic stimulus package which was filibustered by Republicans. Nevertheless, he got a plan through (without a single Republican vote in the Senate) and eight years of economic strength was the direct outcome of that initial and highly successful effort.
It’s probably true that some Presidents merely affect the economy because they have so many different ways to manipulate it that they cancel themselves out, like some sort of Brownian motion. That is not to the credit of the economically ineffective President. Bill Clinton had a plan, fought hard to get it passed, and should deservedly reap the results of it.
Likewise, the two Bush Presidents, who appear to be unique among modern Presidents in their belief that manipulating the economy is ineffective except for paying off election favors, deserve every bit of scorn which history will pile upon them.
I am signing off this thread. I just cant stomach another Bush-Clinton bash-o-rama. Have fun.
I’m not convinced that I have a greater grasp of economics than you but… I have always shared your father’s view. I don’t believe that the president has as much effect (should it be affect? I can never remember) on the economy as he is given credit, be it Reagon, Bush, Clinton or Bush. In particular though, the economy went in the toilet way too quickly for Bush to be responsible. If we can name a culprit, I would name the heads of the corporations that betrayed the investers and the workers. The accounting practices that allowed this to happen pre-date Bush (and probably Clinton as well.)