30 August 2003

Do Republicans Manage the Economy Better than Democrats?

Poll results repeatedly show that Americans believe Republicans are better stewards when it comes to economic issues. Maybe it's the outcome from the preponderance of corporate media and conservative financial journals - because, the numbers simply don't bear out this truth at all. In fact, both the stock market and GDP have performed better under Democratic administrations. Ditto for House or Senate majorities.

What if the great depression era is excluded and years are tallied for the presidential party submitting the yearly budget? Still, the Democrats outshine the Republicans.

The economy grew in 19 of the 20 years in which Democratic Presidents submitted a budget and in 16 of the 20 years in which Republican Presidents submitted a budget.

For the twenty years for which Republican presidents submitted budgets, the average rate of GDP growth was 2.94%.

For the twenty years in which Democratic presidents submitted budgets, the average rate of GDP growth was 3.92%.

Well, many will argue, justifiably, that there is a lag time before economic and political policy can take root. So what if we looked at a two, three, four or five year lag? And let's examine inflation and unemployment too.

3 Yrs

4 Yrs

5 Yrs

GDP Growth
Democrats
Republicans

3.56%
3.35%

3.78%
3.16%

3.71%
3.21%

Unemployment
Democrats
Republicans

5.06%
6.16%

5.04%
6.18%

5.01%
6.21%

Inflation
Democrats
Republicans

3.33%
4.36%

3.07%
4.60%

3.20%
4.48%

No matter what time lag you choose, Democrats post higher GDP growth, lower unemployment, and lower inflation.



posted by Naum at 0:23 | Economics

Comments

What were the numbers when Carter was president?
Democrats took a free ride on the accomplishments of Reagan.
#1 posted by E. Nelson on 23 October 2003 at 18:37
I think it was Bush that succeeded Reagen. What free ride did he get? He got the boot for the continuing bad Republican policies. It was only under Clinton (who listened to Greenspan that the economy got moving).

The only thing about Republicans is that they are so brain washed that they have to lose their own jobs before they begin to see the truth!
#2 posted by R. Myers on 24 October 2003 at 16:38
Ned Davis Research, the Venice, Florida investment research firm, last year looked at the inflation-adjusted returns investors earned since 1900 during various combinations of Republican and Democratic control of the White House as well as Congress as is shown above.

The firm found that the market performed better when the Democrats were in control of both the White House and Congress than when the Republicans held sway over the executive and legislative branches.

But before you Democrats out there start celebrating, I should add that the returns were even better when neither party had the upper hand -- that is, one party held the White House and the other had control of the Congress.

Frankly, I wouldn't make too much of analyses like these. Political parties don't operate in a vacuum, nor do they have control over all aspects of the economy and the market.

Nonetheless, I think that political parties' economic policies do matter, even if their effects can't be tracked in exact lockstep with their control of the Oval Office or Congress.

Above all, I think both consumers and investors prefer policies that foster job and economic growth, while keeping a lid on inflation. Policies that do that, in turn, should also lead to solid returns in the financial markets.

So whichever party you believe has policies that fit the bill on those counts deserves your vote.
#3 posted by Thomas on 8 January 2004 at 18:18
No matter what anyone thinks, presidents inherit thier economy from the president that came before them. George H. W. Bush came into a good economy because of Reagan, Bill Clinton inherited a good economy from George H.W. Bush, and George W. Bush recieved a bad economy from Bill Clinton. Now George Bush in do his best and succedin might I add at making our economy better.
#4 posted by Amanda on 13 March 2004 at 13:47
Um, I think the point of the article was that considering any variable amount of time lag, the empirical conclusions are the same.
#5 posted by Naum on 13 March 2004 at 14:09
Amanda's stupid, Naum.
#6 posted by Paul on 11 April 2004 at 14:05
Amanda, George H.W. inherited a recession from Reagan. George W. Bush inherited an economy on the downslide, which he made even worse. Four years later, unemployment: 1% higher; lost almost 1 million jobs; increased the debt by 1.7 trillion dollars; The DOW, NASDEQ, S&P 500 are all down from when he took office. Good performance standard?
#7 posted by Bill on 3 October 2004 at 8:28
Depends on who you ask. Republicans argue we are in our 9th month of job increase. Can't trust either side's numbers.
#8 posted by Tis on 20 October 2004 at 19:29
The unfair NAFTA and GATT trade agreements were passed by President Clinton and a Democrat controlled Congress in a lameduck session of Congress even though the new Contract with America Republicans won Congress. Clinton and the Democrats joined hands with the Republicans like Gingrich and Dole with Rush Limbaugh who played a great part in the election of the new Contract with American Republicans. 1998 was not that different from 2001 under President Bush. During the past ten years, the U.S. suffered the most massive dislocation of jobs in its history under both Democrat and Republican administrations. And President Bush was successful in passing Fast Track after Clinton tried to do it twice. So in the end there is no difference between the two parties. For more information visit Tapart News and Art that Talks at http://yestapart.bizland.co... Other related sites are at http://tapsnewstory.filetap... http://arklineart.fotopages... View the Cross 9/11 Tangle of Terror artwork by Ray Tapajna asking who will now untangle the terror Globalism and Free Trade have bred. See also The Clinton Years -The American Dream Reversed artwork which is number one in terms of hits at http://www.graphicsforums.c... Other related art that talks pieces include Who Has the Key?-The American Worker is Handcuffed, The Pearl Harbor Attack on American Workers, The American Dream is Burning and Locked out Workers Bearing their Cross
#9 posted by Tapart News Advocate on 7 December 2004 at 20:40
To E Nelson on 23 Octobewr 2003, the accomplishments of Reagan could not have been accomplished if it were not for Jimmy Carter appointing Paul Volcker the Fed Chairman. It was Paul Volcker who saved the economy, not the Reagan tax cuts. You do not cut taxes to put more money into the economy with double digit inflation, instead you raise interest rates and possibly raise taxes, and cut spending. Reagan increased spending and cut taxes, whcih meant that Volcker had to raise the interest rates even more than he had planned. But Reagan got the credit.
#10 posted by Bill Davis on 2 November 2006 at 12:21

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