The biggest hole in this analysis is that the Republican and Democratic parties of today don’t really share the same economic policies (or much of anything else really) of those parties in the distant past. Like, whatever it is that the Republican party did for the economy in 1873 or during the Great Depression tells us very little about their policies today.
That is likely why the analysis is limited to Presidents since World War II.
Economic-policy speaking, it can be said that the Republicans have always been pro-wealthy/anti-redistribution (excepting TR, and they never made that mistake again), and the Dems… a bit less so.
To your point, I don’t know enough about, say, 1883 American economic thought as to ascribe ‘left’ and ‘right’ to the parties, but trust me: Since 1868, the Republicans have always been the party of the wealthy.
The third post is limited to the post-war period, the other two go earlier than 1945.
A majority of the OP’s analysis covers data prior to WWII.
What I see in the last set of tables is that apparently the wealth creation is very volatile these days- the top 10 and bottom 10 are dominated entirely by the last four presidents.
The other major problem is that the post-WWII numbers are largely measuring the fact that Democrats were presidents during the two major global economic boomtimes, the 1960s and the 1990s. The whole world experienced high economic growth during those decades. You could argue that it was because the US as a major world player with a capable Democrat at the helm helped ensure global stability and promoted worldwide economic growth, but… that seems like a questionable analysis to me.
It seems a lot more likely that the correlation you’re measuring goes the other way. In good times, people are more likely to vote for the social justice and redistributionist economic policies and collaborative foreign policies of Democrats because they want to spread the wealth and join in worldwide harmony, and when times are bad they’re more likely to vote for zero-sum foreign policy and tax cuts of the Republicans.
Add in the fact that any analysis of growth rates should involve some amount of lag. Like, to the extent that Clinton made good economic policy choices, whatever measurable growth was due to them probably didn’t start on Jan 20 1992 or end the day he left office. Reasonable people can argue about what the best or correct delay to use might be, but I can’t imagine any model in which it should be 0.
I tend to believe that Democratic economic policy is superior too. I just don’t think that you can really prove it with this sort of analysis.
I mean… that first paragraph is kinda circular, is it not? “The Dems economic numbers are good because the economy was good under Dem presidents, and therefore their ‘success’ should be discounted somehow” seems to be arguing that their success is not really their success… ?
Anyway, my counter: The Repubs had the 50s and 80s, two periods where the economy was supposedly so “great” a good chunk of Americans want to recapture that greatness even today. And, when it came to growing wealth, Eisenhower did a good job. But the economy was “great” in the 1980s as well, but Reagan’s wealth creation is about 1/2 of Ikes.
Because it was debt-fueled growth which aided Reagan’s economy, hence my focus on this specific metric (as opposed to the more commonly used GDP).
To the 2nd point about lag, point taken. Were this my Ph.D. thesis I would’ve taken timing into account… determined when the 1st budget went into effect, when the last budget ran out, reviewed “first hundred days” policy successes which may have had a pre-1st budget impact (and developed a weighting system for them), etc. But I just decided to make things simple by giving Presidents the ownership of the entire year (for example, FDR is credited with all of 1933, though he didn’t become President until March) and understanding that the first hundred days, plus the potential psychological impact of having a new leader, will have a direct, immediate impact on the economic landscape.
(But really, I did it just to keep things simple. )
Also, I have a hard time figuring out how to reconcile this with the historical record:
“It seems a lot more likely that the correlation you’re measuring goes the other way. In good times, people are more likely to vote for the social justice and redistributionist economic policies and collaborative foreign policies of Democrats because they want to spread the wealth and join in worldwide harmony, and when times are bad they’re more likely to vote for zero-sum foreign policy and tax cuts of the Republicans.”
Again, not a Ph. D. thesis, but going through the post-war elections I would argue that we had ‘good times’ in 1952, 1956, 1972, 1984, 1988, 2000, 2004, and 2016, all Republican victories, and the 'bad times" of 1948, 1976, 1992, and 2008 were won by Democrats. The two “bad times” which saw a party switch from D to R were 1968 and 1980, but then the opposite occurred in 1992 and 2008, so it’s kinda a wash there.
Remember, the last two tables are “nominal” - that means, that they are not adjusted for inflation. Therefore, that’s precisely what you would expect to see - a 1% decline when Truman was President is smaller in nominal dollars than a 1% decline when Obama was President.
|YearQuarter||$ (in billions)||Change from Previous Period||President||% Change|
|Ranking||YearQuarter||$ (in billions)||Change from Previous Period||President||% Change|
If you’re comparing percentages, then unless there were extreme inflation or deflation during the quarter, the adjustment for inflation should be unnecessary.
Eh, maybe. Given we have had some pretty inflationary periods over the course, I think that adjusting for it does more good than harm, especially when we have 10-year periods like:
Historical Inflation Rates, 1972-1982
For comparison’s sake, here is the inflation data for the Eisenhower presidency:
I’m fine doing the extra work, tbh.
Not to be too flip, but what’s the point of all that, if they’re not normalized to some unified dollar figure? You can’t compare the numbers across administrations without doing that.
Those last two charts are in nominal dollars. Everything else in that post is in adjusted (June 2020) dollars.
Great, but why aren’t they in adjusted dollars too? Even across the time from Bush Sr. through Trump, the value of money changed enough to warrant adjustment.
Good summary, JT.
My cliff notes’ addendum: before FDR’s New Deal, we had financial crises at least once every 25 years, if not more frequently. Recessions were often much more severe, often lasting between 2 and 5 years. We haven’t had that problem since 1933. Even in the worst financial crisis seen in 80 years (owing largely to Republican’s love of deregulation policy), the recession didn’t even last a year. Roosevelt’s New Deal was that effing good.
Too much work. There’s 279 rows of data which would need to be adjusted, I merely did the quarters which correlated with the start of Presidential administrations (which meant I only had to do ~30 conversions).
There are clues.
Like when Democrats take over and want to increase stimulus, Republicans become fiscal hawks. But only when Democrats are in power. When Republicans have control of the White House and presiding over an economic crisis, they’re much more willing to chuck their ideology into the waste bin - probably because they know it sucks.
The Bush administration learned the lessons of Hoover from 1929-1932: stubbornly adhering to the ideology of not wanting to increase the welfare state is a recipe for electoral disaster and even civil unrest. Even Trump and McConnell, who have repeatedly tried to strip Obamacare away from millions of Americans, understand that he had better keep the stimulus spigot functioning or risk a political tsunami (assuming we have free and fair elections, that is).
This is dumb for a variety of reasons. It totally ignores policy. Top tax rates were cut by a large amount under JFK, welfare was reformed under Clinton. Is that what is generally thought of as Democrat policy? This ignores the Fed, which is what actually controls the economy to the extent it can be controlled. It ignores all the exogenous shocks. Was it Nixon’s fault that OPEC formed, or did Clinton cause the internet bubble? The great recession was caused in part by banking regulations, globalization, Fannie Mae, immigration policy, etc. almost none of which happened under Bush 2.
The economy is incredibly complicated, trying to distill it down into who has president at a given time makes no sense, and is at best superstition. This is like peasants who blame a poor harvest on whether God favors the king.
No, it’s not circular. Democrats were presidents during global economic boom times. There’s no reason to think that who the American president was caused that to happen. It’s much more likely that the correlation runs the other way or that you’ve simply captured enough noise in a very small sample size to overwhelm whatever signal you’re trying to measure.
I mean, you can’t counter the actual numbers with the word “great” in quotation marks. Whatever beliefs conservatives might hold about recapturing the magic of certain decades, there are global economic forces that are much larger than which party holds the American presidency.
You could argue that, but it’s not remotely rigorous.
Again, I’m not saying your claim is wrong. I agree that Democrats are better for the economy. I just don’t think that your analysis of this data really supports that claim at all.
I expect that it is not possible to support any interesting claims about something as complex as the interplay of politics and economics with such a simple model.
All administrations want to create booms, it’s just a matter of which policy levers they choose to pull.
You can start a boom any time you want (if you can get the policy(s) implemented). All booms lead to busts, but the timing of busts might as well be random.