Why Are Republican Presidents So Bad for the Economy?
G.D.P., jobs and other indicators have all risen faster under Democrats for nearly the past century.
A president has only limited control over the economy. And yet there has been a stark pattern in the United States for nearly a century. The economy has grown significantly faster under Democratic presidents than Republican ones.
It’s true about almost any major indicator: gross domestic product, employment, incomes, productivity, even stock prices. It’s true if you examine only the precise period when a president is in office, or instead assume that a president’s policies affect the economy only after a lag and don’t start his economic clock until months after he takes office. The gap “holds almost regardless of how you define success,” two economics professors at Princeton, Alan Blinder and Mark Watson,
write. They describe it as “startlingly large.”
Since 1933, the economy has grown at an annual average rate of 4.6 percent under Democratic presidents and 2.4 percent under Republicans, according to a Times analysis. In more concrete terms: The average income of Americans would be more than double its current level if the economy had somehow grown at the Democratic rate for all of the past nine decades. If anything, that period (which is based on data availability) is too kind to Republicans, because it excludes the portion of the Great Depression that happened on Herbert Hoover’s watch.
The six presidents who have presided over the fastest job growth have all been Democrats. The four presidents who have presided over the slowest growth have all been Republicans.
Democrats have been more willing to heed economic and historical lessons about what policies actually strengthen the economy, while Republicans have often clung to theories that they want to believe — like the supposedly magical power of tax cuts and deregulation. Democrats, in short, have been more pragmatic.
Trump
repeatedly downplayed the coronavirus pandemic, and the country suffered. The economy would have experienced a downturn no matter who was president, but his scattered response aggravated the pandemic and the recession. In some other countries, life is
much closer to normal. In the United States, Mr. Trump became the first president since Mr. Hoover to
preside over a decline in employment.
The pragmatism gap isn’t only about recessions, either. Democrats have also been more aggressive about making job-creating investments — in medical research and clean energy, for example — that the private sector does not make when left to its own devices. Occasionally, a Democratic president has even been willing to go against type in order to encourage growth. Mr. Clinton, persuaded that deficit reduction could bring down interest rates and accelerate growth, scrapped some early spending plans and
raised taxes. Interest rates fell, and the economy boomed.
The evidence now overwhelmingly suggests that recent tax cuts have had
only a modest effect on the economy. G.D.P. grew at
virtually the same rate after the 2017 Trump tax cut as before it. If anything, the Clinton tax increase of 1993 has a better claim on starting a boom than any tax cut since.
The American economy has performed much better under Democratic administrations than Republican ones, over both the last few decades and the last century. And as Ms. Wanamaker said, “Administrations do certainly have the ability to affect economic outcomes.”
NEW YORK TIMES