How The U.S. Economy Performed Under Democrat 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 |
| GDP Growth | 4.1% | 2.9% | 2.2% |
| Employment | 2.9% | 1.7% | 0.5% |
| CPI | 4.0% | 5.1% | 3.0% |
| DJIA | 8.1% | 6.5% | 0.9% |
| Dollar | +0.8% | -3.6% | -5.9% |
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:
Stock Market Performances Under Different Presidencies
Consumer Price Inflation During The Last Nine Presidencies
U.S. Employment Growth During Different Presidencies
Dollar Performance During Different Presidencies
U.S. Real Economic Growth Under Different Presidencies
Tags: Dollar
[...] that included Democratic versus Republican presidents throughout the postwar period. As others have also pointed out, the Democratic record dominates to a surprising extent. (The event was [...]
[...] and the dollar were examined in previous posts on this site and can be visited by clicking on http://currencythoughts.com/2008/08/19/how-the-us-economy-performed-under-democrat-and-republican-pr…. Part of the supply-side creed is the belief that the private sector is far more trustworthy [...]
[...] Economic data are not quite complete for the whole Bush era, and of course revisions will continue to be made for years to come. Real GDP growth through 3Q08 averaged 2.2% per annum but is likely to drop to 2.0% per annum, about 40% below the long-term trend, once the final quarter of last year’s numbers get released. The Dow Jones Industrial Average hit an all-time high of 14,165 in October 2007 but has fallen by 3.0% per annum on balance compared to its level when Bush took office eight years ago tomorrow. Over those eight years, the dollar dropped on average by 4.3% per annum against the euro and by 3.1% per annum versus the yen, even as officials gave periodic lip service to the view that dollar strength is important for the United States well-being. U.S. consumer prices increased 2.4% per annum through December, a respectable pace matched against previous presidencies. Among all the criticism heaped on the outgoing government, the current Great Recession is one for which the pundits have partly excused it. The imbalances that led to this crisis preceded Bush in some instances and were fanned by many other people, including and especially Alan Greenspan. Those readers wishing to learn more about the economic track record of previous presidencies should click here. [...]
It is so disturbing to see my fellow middle class so blinded about taxes and what it takes to have the best schools, Roads, sewers,fire departments, all the services we all enjoy. I wonder what would do without them, and who would we pay to keep us safe, and protect our homes as
well as our families. It take Taxes and
government!!!