Now that I have provided an equality of means test that shows the probability that the growth rates experienced during Democratic and Republican administrations are sufficient different as to be very unlikely to be caused by coincidence, I thought the matter was settled. But in comments, a new meme emerged once again.
It started on an earlier thread, with reader WCW, who while he doesn’t seem to think this is the case, made a very good point:
Odd, the simplest (and most persuasive) explanation for this behavior is one I’ve seen mooted lots of places, just not in this post or its comment thread. If it appeared and was discarded, can someone enlighten me why?
For those who haven’t heard, the basic idea is that this “effect” is real, but that folks have the causal arrow mixed up. It isn’t that Republicans or Democrats are better stewards of the economy, over the decades and the policy shifts and progress, progress, progress. It is that pulling the (D) lever is somewhat more attractive to the electorate when times are bad, and that the (R) lever starts looking more attractive on the margins when times are good.
(BTW… if you like graphs of economic series, wcw’s website has a bunch of ’em.)
It has since been taken up by at least one of our right friends. So I think its time to address the point… to partly quote myself from comments…
There seems to me to be an insurmountable problem to the idea that causality goes the other way, i.e., that Republicans get elected when times are bad or about to get bad regardless of who is President, and Democrats get elected wehn times are good or about to get good regardless of who is President.
The problem with that is that outcomes after close elections should be the most similar, outcomes after landslides should be the most dissimilar.
Put another way… after Reagan’s landslide victory in 1984, we would have seen very low growth. And yet Reagan performed best among Reps… most similar to Dems.
And after GW’s loss in the popular votes (but electoral college win), we should have expected to see performance resembling that of Dems. And yet GW’s first term was anything but. Similarly, in his second term, we should have expected to see something more or less similar to the Dems, as it was a reasonably close elections.
So the outcomes we are observing are not due to causality running the other way.
Which brings us (after many posts) to this…
1. There is a difference between the growth rates of Dems and Reps… And its statistically significant, so its probably not a coincidence.
2. Its not due to Congress.
3. Its not due to lags.
4. Its not just one or another cherry-picked series.
5. Its not the business cycle.
6. We don’t have causality going the wrong way.
What is left? From what I can tell, as I’ve been stating from the beginning, it is either that Democrats have the best policies, or God punishes us when we collectively vote for Republican Presidents.