Since it’s an election year, we are hearing a lot of rhetoric about economic policies. Well, in between discussing someone’s emails and someone else’s temperament.
I have always believed a pro-business set of economic policies were appropriate, call me a “trickle-down” guy I guess, growing up in the Reagan era. And as an adult who makes a good living, it sure would be nice to see a lower set of individual tax rates than we currently have.
But I feel like the story is much more complicated, and we don’t get the full picture from the media or our elected officials. Economists spend great amounts of energy and time evaluating what policies work and don’t work, and it is a multi-dimensional set of issues. Things like monetary policy, trade policy, and many other factors come in to play.
Based on the graph below, I am not sure that the party of the president (or congress) matters so much.
Reagan of course had to overcome some pretty bad economic issues around inflation and interest rates from the late 1970s. Many have argued that deficits built up during the 1980s led to recession in the early 1990s. Clinton’s policies led to sustained growth, but also a market crash (bursting the Internet bubble) that led many to wonder if it had all been a façade. 9/11 didn’t help things, and of course Obama’s rate of growth is the lowest, hampered by 2-3 years of digging out of the Great Recession. In each case there was a mix of Congress being controlled by the other party for some of the Presidency.
I don’t have many answers here, precisely because it is so complex. But I am pretty confident that any President, Republican or Democrat, can screw up an economy and we probably blame them too much for failures and give them too much credit for success.