Why Does Economy Grow More Under Democratic Presidents?

[question everything]

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.”

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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.”

More..

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

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1. simply put, republicans have never been about the economy as a whole.

they have always (at least post-teddy roosevelt) focused on the well-being of entrenched business interest, not on efficient markets, not on the well being of the country as a whole, not on economic fairness or balance, and certainly not on the fiscal well-being of the government, their rhetoric notwithstanding.

you can't make all the wrong moves economically and expect not to pay a price.

democrats usually
(a) implement or expand demand-stimulating government programs and/or
(b) restore overly depleted government revenues and/or
(c) restore fairness in our markets.

all of these things are good for the economy as a whole.


republicans essentially are all about looting the commons for the benefit of the few who have no real use for extra riches. this is terrible for the economy, essentially handing resources to hoarders. plus, they trash regulations, making it easier for the powerful to extract wealth while adding negative value. again, good for entrenched business interests, but bad for the economy.

[question everything]

4. In "trickled down" economics we trust

Bush Sr. was right the first time when he referred to it as "voodoo economics," and even David Stockman washed his hands off it.

The Republicans are still talking about the wealthy being job creators, even though there is no evidence for it.

While Democrats still believe in a rising tide that raises all the boats.

[BlueStreak]

2. Global warming is just bad luck

Einstein was just lucky that he happened to get M, C, E, 2 and the equal sign in the right order.

[question everything]

3. And, really, even if one is lucky

if it happened under a Republican president, they would take full credit for it.

[quadrature]

5. Clinton era--- low cost crude oil

oil was as low as ten bucks in the 1990s.
now it is a hundred.