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Cigar
12-03-2013, 03:01 PM
GDP growth is significantly higher under Dems than Reps (4.35 vs 2.54 according to the article). One excuse for the GOP might be that GOP presidents inherit a worse economy. So I decided to check out the breakdown into quarters, using data from the BEA.
http://www.bea.gov/national/

The results are interesting. It turns out the GDP growth during the first quarter of a Republican administration (i.e. Jan through March after the election) is actually higher than for Dems, but then growth picks up under Dem administrations but slows down under Rep administrations. Here is a chart of average cumulative GDP growth through a 4-year term (Dem is blue, Rep is red).

http://s17.postimg.org/nfbjrrj6n/growth.png
Overall, during a 4-year term, GDP grows about 6% more during a Dem administration than a Rep one, and the entire 6% difference is due to the first two years in office. Here is a chart of the cumulative growth differential (Dem-Rep).

http://s12.postimg.org/4wk36e2e5/diff.png

Wash Post shows scientific data that economy does better under Democrats, then asks if its luck.

The U.S. economy does better under Democratic presidents — is it just luck?

Since World War II, there's been a strikingly consistent pattern in American politics: The economy does much better when a Democrat is in the White House.

More specifically, since 1947, the U.S. economy has grown at an average real rate of 4.35 percent under Democratic presidents and just 2.54 percent under Republicans:

http://www.washingtonpost.com/blogs/wonkblog/files/2013/12/presidents-and-growth.png

Why the big gap? One possible explanation is that Democratic policies are better for economic growth. Another is that Republican policies are better for growth — but there's a time lag, so Democrats tend to benefit.

Alternatively, perhaps Democrats simply have better economic luck. That third theory is one favored by economists Alan Blinder and Mark Watson in their new working paper, “Presidents and the Economy: A Forensic Investigation”. They argue that random economic fluctuations best explain the differences in growth between 1947 and 2013, and not which party happens to hold the White House.


Why Does Economy Grow More Under Democratic Presidents? The U.S. economy has performed better since World War II when the president is a Democrat rather than a Republican, two prominent Princeton University economists conclude. The reasons, they say, involve more luck than successful policies. The research was done by Alan Blinder, a macroeconomist who served in the Clinton White House and has advised several Democratic candidates, and Mark Watson, an econometrician who hasn’t dabbled in partisan policies. Over the past 64 years and 16 presidential terms, the U.S. grew at an average rate of 4.35% when a Democrat was in the White House and at a 2.54% when a Republican was, a gap the economists call “astoundingly large.”

(snip)

Professors Blinder and Watson identify three factors that stand out statistically in their attempt to explain why the economy does better with a Democratic presidents. Together they account for somewhere between one-half and two-thirds of the growth gap:

– Oil price shocks explain between one-eighth and one-fourth of the Democrat-Republican difference in growth rates, and tend to occur when Republicans are in the White House. They don’t blame President Richard Nixon for the first OPEC oil shock or President Jimmy Carter for the second, but suggest that George H.W. Bush’s Gulf War and George W. Bush’s Iraq war were policy decisions that affected oil prices.

– Surges in productivity, or output per hour, account for about one-quarter of the gap. “As with oil shocks, we consider them as mainly reflecting luck,” they say.

– Swings in consumer confidence explain about a quarter of the Democrat-Republican gap between 1962 (when the University of Michigan’s survey data begins) and 2013. This, they say, “comes tantalizingly close to a self-fulfilling prophecy in which consumers correctly expect the economy to do better, and make that happen by purchasing more consumer durables. But direct measures showing increasing optimism after Democrats are elected are hard to find.”

http://blogs.wsj.com/washwire/2013/12/02/why-does-economy-grow-more-under-democratic-presidents

AmazonTania
12-03-2013, 03:15 PM
Actually, the answer is much simpler than that. Most, if not all, Democratic Presidents have president during recessions. You'll obtain more economic growth during a recession - expansion than you would if your economy is hasn't experienced a downturn at all.

Truman: Recession of 1945 & 1949
JFK: Recession of 1961
LBJ: Recession of 1969 - 1970
Carter: Stagflation of the late 1970's
Obama: The Great Recession (Lesser Depression Coined by Paul Krugman)

The only exception to this is Bill Clinton, who presided under a Stock Market Bubble, which isn't real economic growth at all.

The only President who presided under real economic growth -- not fueled by a bubble nor a recovery -- was Dwight Eisenhower: A Republican.

Cigar
12-03-2013, 03:25 PM
Can you image Dwight Eisenhower in today's Republicans Party? :laugh:

jillian
12-03-2013, 03:28 PM
Can you image Dwight Eisenhower in today's Republicans Party? :laugh:

that's funny...

but nixon wouldn't be allowed in the party today either...

and as much as they love him, reagan would probably be out because he raised taxes about eight times.

AmazonTania
12-03-2013, 03:28 PM
Can you image Dwight Eisenhower in today's Republicans Party? :laugh:

Yes.

KC
12-04-2013, 03:47 AM
The President's impact on the economy is much smaller than Congress' impact on the economy, by virtue of the fact that Congress allocates spending. I would be interested to see a chart that shows GDP growth for each Congress.