Partisanship and economy (OR You mean leadership matters?)

Matt seems a little perplexed that the President appears to have a real impact on economic performance. It appears that the US economy performs better when there’s a Democrat in the White House.

I’m not sure why this is so confusing. It appears that Democratic style policies (social programs, progressive taxes, some market regulation) result in a more productive economy. If we accept that as true (which seems to be the real sticking point) it really makes sense that the leadership imparted by the President would have an impact on the legislations passed.

We’ve seen what kind of sway our current President has when threatens to veto bills, or is vocal in his support (or lack thereof) for a bill. He may be an extreme case, but it seems reasonable that any President would exert pressure or influence on the creation of a budget, or other bills impacting how the government will spend its money. Republican Presidents will support policies like regressive taxes, deregulation and decreased social spending, while Democratic Presidents will support policies like progressive taxes, social programs, and regulation.

Obviously, trends over the last century indicate that the Democratic policies create a more productive economy. If that’s true, it makes sense that the President will have that kind of sway over the legislation and spending that becomes law.

I think this just reinforces the idea that Democrats are better stewards of the economy. We really shouldn’t be shocked

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One Response to Partisanship and economy (OR You mean leadership matters?)

  1. Jenny says:

    The few economic professors I’ve had posit that the macroeconomic cycles are too slow and broad for any one administration to have a significant and direct impact on, and that changes in cycles are usually the result of actions taken years before. So, if that’s true, then the previous administration is more likely to blame/celebrate. On the flip side, I recently heard an argument (can’t remember where… NPR sometime last week?) that the Fed Reserve and its chairman, a position appointed by the administration, has a disproportionately greater impact on the macroeconomy than many other factors. So in that regard the sitting president might wield influence. What does that mean? I have no idea. Economics is an art, like medicine, based in science that has too many variables and unknowns to be controlled by feeble humans.

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