All else (including the size of government) equal, is a competent administration necessary for the well-functioning of the economy? (Put another way… is it a coincidence that the party that makes derogatory comments about government produces poorer outcomes, in general?)
I think competence matters. People need to have faith in the system. They need stability to plan. A competent President can keep some things from going horribly wrong, and an incompetent one can make even routine things go poorly. Its no coincidence that things have gone wrong in the GW administration. Consider Katrina or Iraq or Afghanistan… would things have gone so poorly under Clinton? And doesn’t that affect people’s economic decisions?
Update. Second paragraph rewritten.