The New York Times ran a lead article a couple weeks ago -- by David Leonard -- Why Has the US Economy fared so much better under Democratic presidents than Republicans?
https://mail.google.com/mail/u/0/?pli=1#inbox/FMfcgxwLsJzngqwGrpwmjTxfQWSXkmhV
What a piece of junk. I realize that the NYT has a job to support all liberal/progressive causes unflinchingly, but this article has to be the biggest pile of dogdo (no insult intended to dogs) that I have seen from a so-called respectable newspaper.
I wish I had better skills to reproduce or copy the tables from the original source but alas I can't. So please stick with me.
Background. Mr. Leonard wants to compare the economic records of Presidents. So he takes time periods with D presidents and compares them with those of R presidents.
In his first table, he shows that during Democrat presidents, job growth averaged 2.8% per year but only 1% per year with R presidents. With respect to GDP growth, Rs could produce only 2.4% growth compared to D's 4.6%. Sounds pretty damning.
Read on...
The second Leonard table is a bar chart showing average GDP growth by president -- starting with Roosevelt at the top (more than 8% per year) and going to Trump at the bottom (about 1%) The bars are arranged in order of GDP growth.
The order of Presidents by size of GDP growth: Roosevelt, Kennedy, Johnson, Clinton, Reagan, Carter, Ford, Nixon, Eisenhower, Obama, GHW Bush, Truman, GW Bush, and Trump.
14 presidents. First, point. Do we have enough observations to make a conclusion? I don't think so. So this is not good stats.
Second point. We know that what a president can accomplish depends on the make-up of Congress. How did that factor into the results?
We also know that what a president can accomplish depends on stuff going on at the time. Did he take over after a recession? Was he a president during a war? After a global pandemic? Apparently none of that matters to the NYT. According to the NYT the important thing that matters for unemployment and output is the party of the president.
What else to say?
If Ds are so good then why are Truman and Obama in the bottom 5 of 14.
If the Rs were so bad, then why were Reagan, Ford, Nixon, and Eisenhower in the top half?
What else was going to on to color the economy? Maybe Carter had strong growth -- but do you recall stagflation? Would you characterize his years as president as a great economic success? I doubt many people think of him as a great president.
When Reagan had to stomp out inflation fires after Carter, isn't it amazing that he managed such strong growth during his time in office?
Is there something weird about the fact that the highest economic growth rates came from Presidents who were in office more than half a century ago? Maybe it wasn't so much the party of the President -- but the times they were in office?
Deciding how presidential party affects the economy is not a simple thing. The NYT owes it to its readers to not print rubbish. Of course, I guess rubbish is okay so long as it supports their causes.
I don't subscribe to the NYT so I was not privy to the full article. But I did find this juicy NYT quote which apparently explains it all - Ds are smart and caring and Rs are not.
I quote, "Democrats have been more willing to heed economic and historical lessons about what policies actually strengthen the economy, while Republicans have often clung to theories that they want to believe — like the supposedly magical power of tax cuts and deregulation." Democrats, in short, have been more pragmatic."
So there we have it. I am so glad we have a D for president for the next four years -- life will be splendid. We will have mature people running our government. No clinging to stupid theories. We won't have any silly tax cuts or deregulation of industry.
There is a mature and technical literature around this topic. One good example of a real approach to this difficult question can be found at https://www.princeton.edu/~mwatson/papers/Presidents_Blinder_Watson_Nov2013.pdf
My wonderful colleagues, Fratianni and von Hagen, and I wrote our piece on this topic a while back. "Testing for Political Business Cycles," Journal of Policy Modeling, (spring, 1990). pp. 35-59.
The NYT apparently doesn't bother researching real work on their topics.
Very interesting read here Larry and thanks for pointing out the tremendous number of variables and circumstances that impact those measures well more than presidential party. I've seen similar articles about how the stock market has done under both R & D administrations. Have you as well? Curious of your thoughts on that. Thanks.
ReplyDeleteThanks Unknown. I did one paper about Monetary Policy and Stock Returns in 1982 when I was visiting at the St. Louis Fed. But that's about all I did on stock returns.
DeleteDear LSD. Wuz watch’n reruns of Ozzie/Harriet, Rin-Tin-Tin, Hazel, Gilly’s Island, Lucy, Jim Dooley Fish’ Club (ouch!), Howdy Doody, etc. when yer blog came across the DeepSeaInter-Fish.net. Mention of the NYT right up top got my immediate mis-intention ‘n realized you weren’t gunna be kind to the Grey Lady, which no longer carries any semblance to virtue, truth, ‘n the ‘merikan way’—by the way. Not even suitable to wipe whale poop off the sea’s bottom.
ReplyDeleteYour sarcasm is as delicious ‘ n fin-ger lik’n good as my fav sardines ‘n caviar.
As any respectable two-handed macro economist knowz—or should know—a fiscal policy of ‘tax ‘n spend into oblivion’ cannot by any stretch of illogic ‘n fantastic imaginary imagination “strengthen the economy.” The math jus don’t work: Can only lead to infinite debt and financial implosion. What a bunch of fish flatulence.
Whale poop and fish flatulence in one reply -- I count that as a real winner. Good work Tuna. Keep up the good work.
DeleteYepper, LSD. Im'a down here work'n me tail off :).
ReplyDeleteHi, Larry, I read that NYT article last week, hoping to find truth, of course. But even I could tell that it was all wishful fluff manipulation, and I know basically nothing about economics (except what I read from you!).
ReplyDeleteLarry, the entire article contemplated many of the variables, but suggested that often, D presidents inherited recessions from their R predecessors.
ReplyDeleteThe sad thing is that people vote on what they think the President did or did not do for the economy. Of course, Doober, we know that much of it is poppy-cock. But didn't somebody once campaign by asking the question: Are you better off or worse off than you were four years ago? JML
ReplyDeleteI do recall that slogan -- but of course every president would say the same thing. That's different than a serious study of whether Ds or Rs were better over history. As an econometrician, you know how hard it is to do that kind of work.
Delete