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
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



15 Responses to “How The U.S. Economy Performed Under Democratic and Republican Presidents”

  1. […] 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 […]

  2. […] and the dollar were examined in previous posts on this site and can be visited by clicking on….  Part of the supply-side creed is the belief that the private sector is far more trustworthy […]

  3. […] 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. […]

  4. Bernard Berry says:

    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

  5. […] most visited blog entry posted on Currency Thoughts was written August 19, 2008 and entitled How the U.S. Economy Performed Under Democrat and Republican Presidencies.  That article considered five criteria:  1) the dollar against the D-mark and/or euro, 2) […]

  6. bob says:

    It seems to me that every time a republican goes into office the economy falls from all the stuff the previous democrat does. Then the republican fixes it and starts the economy going and a democrat inherits it. So its really the republicans who are strengthening the economy and the democrats who are weakening it.

    For instance the current economic crises that everyone blames on bush can be pointed directly to policies passed in clintons administration.

  7. larrygreenberg says:

    You raise an argument that I considered but rejected ultimately when I did this study. At what point should political leadership be held responsible for what happens on its watch? I believe it’s a shorter period that the typical interval since 1897 between changes in the party affiliation of the presidency. Here’s the respective tenures, starting with Andrew Jackson who founded the Democratic Party: Democrat 1929-41 twelve years, Whig 1841-45 four years, Democrat 1845-49 four years, Whig 1849-53 four years, Democrat 1853-61 eight years, Republican 1861-65 four years, National Union (a coalition of Republicans and War Democrats) 1865-69 four years, Republican 1869-1885 sixteen years, Democrat 1885-89 four years, Republican 1889-93 four years, Democrat 1893-97 four years, Republican 1897-1913 sixteen years, Democrat 1913-21 eight years, Republican 1921-33 twelve years, Democrat 1933-53 twenty years, Republican 1953-61 eight years, Democrat 1961-69 eight years, Republican 1969-77 eight years, Democrat 1977-81 four years, Republican 1981-93 twelve years, Democrat 1993-01 eight years, Republican 2001-09 eight years, Democrat 2009-??.

    Your point is more appropriate for the nineteenth century when political parties played four-year ping pong in the white house. One can hardly blame the Great Depression on Woodrow Wilson, since Republicans were in command for the prior eight years. Your argument also implies that Nixon and Ford were more responsible than Carter for the inflation of that era or that Roosevelt/Truman deserve more credit than Ike for the bull market in equities during the 1950’s. Now Obama came into an enormous mess, and there’s no way he could emerge as a successful president if the Democrats are limited to a single four-year term. It will take at least eight years to offset the initial horrible years. He’ll need to communicate what he’s doing much better to buy himself more time, but that’s an important element of good leadership. So yes, he should be held responsible for what happens on his watch.

  8. GetsumJ says:

    The true blindness of people just kills me. Let’s see, the Democrats took control in 2006, the DOW started crashing in 2007. People focus on the Presidency when the congress has the power over the economy. The Pelosi – Reid spending show is what killed the economy. This whole page is an exercise in ignorance.

  9. Robert Hiles says:

    To GetsumJ:
    I believe that your true blindness of the Bush 43 spending show which included 2 wars who costs were kept off the budget and tax cuts for people who haven’t pay their fair share were the causes of the downfall of our economy.

  10. Andreea M says:

    Please don’t succumb to the name-calling of the Republicans! “Democrat president” is a legacy of the Bush II administration. The correct headline should read “How The U.S. Economy Performed Under Democratic and Republican Presidents”. Thanks for the article.

  11. Steve Dennison says:

    I do think who controls the House of Representatives is a better view. They control the purse strings so while I find your report interesting I think that would be a better view.

  12. Charles Ford says:

    This article shows that presidential influence does have an effect on the economy. It does not argue the mechanism. We are completely overlooking the fact that government fiscal flow only accounts for roughly 15% of the economy. Bad economy has historically been and will likely always be caused by the shenanigans of corporate leadership. My experience suggests that CEOs are much more cautious when a Democrat is in the White House.



  14. Rick Vigil says:

    Rep like to say Obama is raging a class warfare, he’s not. He’s simply trying to expose the greed and corruption wall street thrives in. Rep like saying he’s a socialist, and if you work hard and apply yourself you can be a millionaire, how can a average person, no matter there drive compete with corruption at very higher levels. They have created a dynasty of unfair advantage for there fraternity of 1 percenters. Unfortunately it’s the uniformed, and uneducated that keep voting rep. Rep keep votes by religious redirect and dangling the carrot type of propaganda. They do it under the Christianity, but everything they stand for is in direct contradictory of Christianity.

  15. guest says:

    Very misleading article which overlooks many correlating factors. It’s suspicious the stats start with Kennedy and LBJ who had the booms of interstate travel and international air travel, and ends with Clinton who had the PC boom. American innovation not party affiliation drove growth. On the other side you had Nixon and Ford, who were powerless after Watergate, and Reagan and Bush who took down the Soviets.

    “Rep like to say Obama is raging a class warfare, he’s not. He’s simply trying to expose the greed and corruption wall street thrives in”

    Obama loves receiving the Fannie Mae and Freddie Mac contributions. He inherited the subprime housing mess he and his Senate Dem friends created. If we were an honest society the Former Acorn lawyer, the Friend of Angelo Mozillo and Barney Roll the Dice Frank who covered his boyfriends corruption at Fannie Mae would be in prison for fraud and embezzlement.

    Obama’s solution for fraud and incompetence? More laws which ended up pushing a larger share of the money to Fannie, Freddie, ML, BoA, JP and UBS today than pre 2008.