How The U.S. Economy Performed Under Democratic and Republican Presidents
August 19, 2008
During the forty years from 1961 through 2000, the United States had a Democrat as president half of the time (1961-68, 1977-80, and 1993-2000) and a Republican president for the other twenty years (1969-1976 and 1981-1992). Power was shared, and the switch-overs occurred infrequently, so that it is fair to associate performance with the ruling presidential party. It’s hard for a party to blame its record on the previous incumbent, if they had eight or even twelve years to straighten things out. I chose five vital economic signs to grade each party’s performance: real GDP growth, growth in employment, consumer price inflation, the change in the Dow Jones Industrial Average and the change in the dollar against the mark and/or euro after 1998. I normalized all the percentage changes to a per annum basis so that they could be easily compared, and I aggregated each party’s data. Thus, the presidencies of Kennedy, Johnson, Carter and Clinton are counted as one 20-year-long presidency, and the same is done for the presidencies of Nixon, Ford, Reagan and Bush41. GDP growth was measured from fourth quarter to fourth quarter. Since presidents are sworn in on January 20th, January was counted as a month for outgoing administrations in the cases of employment and consumer price figures. Stock price and dollar data are measured from January 20th or the last business day before that. Also, since the dollar was fixed, not floating, in the 1960’s, that comparison leaves out the Kennedy/Johnson years and thus comprises just 12 years under Democratic rule.
The Bush43 presidency has had its performance shortcomings and if included with the other 20 years of Republican rule would have resulted in uneven terms in office. So in fairness to the Republicans and because the Bush43 presidency is still going, albeit 94.7% complete, I tallied that administration separately from its four immediate Republican ancestors.
With twenty years on each side and since some of the ups and downs of the U.S. business cycle lie beyond the direct control of policymakers, one would expect similar results in the two groups. Not so. Instead, one discovers below a significant advantage when a Democrat occupied the White House in each of the five categories.
|% Per Annum||Democrat||Republican||Bush43|
Postscript (September 30, 2008): Because of the wide traffic to this blog entry, follow-up examinations were published for each of the five vital economic signs during the week to September 26th. These additional studies disaggregate the information to each of the nine presidencies since 1961 and can be visited by clicking the links below: