Economic Growth Rates, The President’s Party and the Party that Controls Congress

by Mike Kimel

Economic Growth Rates, The President’s Party and the Party that Controls Congress
Cross-posted at the Presimetrics blog.

This post looks at economic growth rates by President and party. However, it also looks at how that growth rate is affected by which party controls Congress. (This is a topic covered in a lot of depth in Presimetrics, my upcoming book written with Michael Kanell.

In this post, economic growth is measured as the annualized change in real GDP per capita, which was obtained from the Bureau of Economic Analysis’ National Income and Product Accounts Table 7.1. Growth rates are measured from the year before a President (or Congress) took office – call that the baseline real GDP per capita for any given President – to its last year in office. The analogy we use in the book is that of a sprinter; times are measured from when the starter’s pistol goes off (which is right before the sprinters start running) to right before they stop running all out (when they cross the finish line).

The BEA is the agency in charge of computing GDP, and the data goes back to 1929. The post will use all the available data with one exception – when many people are confronted with the fact that the data shows insanely fast growth during the FDR years the first reaction is denial as this isn’t exactly what pundits (not to say many authors) tell you happened during his term. Those who bother checking data move on to a second reaction, which is to insist that the rapid growth was due entirely to World War II. As a result, this post only includes FDR’s term until 1938, far enough before the start of World War II that the war shouldn’t be an issue.

So here’s what it looks like, color coded by the President’s party (red = Republican, blue = Democrat):


Graph 1

Despite what Glenn Beck and other media figures believe and tell us, even using only the six worst consecutive years of the FDR administration still leaves FDR at the top of the heap. Additionally, Democratic administrations tend to come out ahead of Republican administrations. Two notable exceptions are Truman and Obama, but for the latter only one year of data is available at this time. Bear in mind that FDR also had negative growth in his first year in office too, so there’s room for that to change. To a large extent, that depends on policies, and future post will examine policies that affect growth.

But for now, consider something different. For some Democratic Presidents, both houses of Congress were under control of the Democratic party for every year the President was in office. However, the Republican Party was in control for some or most years for other Democratic Presidents. The next graph shows growth rates for Democratic Presidents only, but is color coded by whether the Congress was under Democrat control for the entire time the President was in office (blue) or not (red).


Graph 2

Leaving aside the Obama administration, for which there is only a single year’s worth of data, the graph shows that, in general, Democratic Presidents who enjoyed a Democratic Congress every single year of their terms tended to produce faster economic growth than Democratic Presidents who faced Republican-controlled Congresses for part of their term.

What about Republican Presidents? Well, we can divide Republican Presidents into three groups: those who faced mostly split Congresses (throughout most of Reagan’s term, Republicans controlled the Senate and Democrats controlled the House of Representatives), those who faced all or mostly Democratic-controlled Congresses, and those who faced mostly Republican-controlled Congresses. The next graph shows the growth rates turned in by Republican Presidents color coded by who controlled Congress (Red = All/mostly Democrats, Blue = All/mostly Republicans, Gray = Mostly Mixed).


Graph 3

The best performance by a Republican President came under Ronald Reagan… who faced a mixed Congress until 1987, and Democratic controlled Congress in 1987 and 1988. Even among the remaining Republican presidents, it does not appear that having a Republican controlled Congress leads to faster economic growth. Hoover was the only President to enjoy a Republican controlled Congress during his entire term, and he produced (by far) the worst results of all Presidents. GW faced a Republican controlled Congress during most of his years in office, and growth during GW’s term was below the average growth for Republican Presidents who had to deal mostly or exclusively with Democratically controlled Congresses.

To summarize – among Presidents from 1929 to the present, Democrats produced faster economic growth than Republicans with quite a margin to spare. Additionally, both Democrats and Republicans in the Oval Office were more likely to produce faster economic growth the greater the percentage of years in their term that the Democrats controlled Congress.

I’m going to try to explain what accounts for these differences in future posts.

OK. This bit is not cross posted with Presimetrics – its special to Angry Bear, so to speak. Call it a bit of editorializing. None of this is rocket science. It all falls out of organizing the data the way politicians and voters would expect the data to be organized, and is apparent from a set of graphs. Presimetrics, the book I co-authored, which is coming out in August does a lot of this. And it does it for a lot of series, from abortions to crime to the national debt. Often Presidents who performed well on one issue tended to follow similar policies to other Presidents who did well on that issue. Likewise, Presidents who did poorly also often shared policies with others who did poorly.

And it’s pretty apparent from this graph that the policies followed on one side of the aisle aren’t performing as advertized. That doesn’t mean the other side of the aisle knows what it’s doing, merely that whatever mistakes it makes are small by comparison. Or one can take the Megan McArdle route, which is to insist that even though politicians have insisted on splitting themselves into these two groups, the process by which a politician happens to get a D or R after his or her name is completely random, so any patterns we observe are coincidental.

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