Comparing Presidents, Real GDP per Capita and a Look at the Business Cycle as an Explanation for the Performance Discrepancy – Part 2
This is a follow up to my post looking at real gdp per capita while trying to take into recessions.
Recall – I tried to account for recessions because our friends on the right (plus one very annoying troll) felt recessions skewed things. I personally disagree – as I noted, among other problems with this idea, a President with lousy economic policy is more likely to have a recession, more likely to prolong it, and more likely to make it worse than a President with better economic policies. But I decided to try anyway. In that post, I looked at real GDP per capita, and I ignored any increases in debt, as that makes Republicans look bad. I also removed the 8 quarters following a recession – my assumption was that, because the GW administration keeps talking about how things have gone since Q3 of 2003, about 2 years after the last recession (so far) ended, that a lag time might be needed.
Several readers have voiced the opinion that the 2 year lag should come out. So here are the results with the 2 lag removed. (I’ve improved the table since the previous post… it now shows the weighted (by quarter) average growth rates for each President and for each party.
So what changed? Now, we show JFK/LBJ at the top, followed by Reagan. Nixon/Ford and Carter are essentially tied at 0.71% growth per quarter – Nixon/Ford win out at the third significant digit. Then Clnton. Then Bush. Then GHW. Then Ike.
As before, Americans spend more time in recession when Republicans are in office than when Democrats are in office (76.47% v. 93.75%). Despite that, leaving out the recessionary periods, growth is still faster, on average, under Democrats than under Republicans, 0.70% versus 0.43%.
And its not a matter of out a laggard. Leaving out Ike, the Republican growth rate is 0.62% per quarter. Leaving out both Ike and GHW, its 0.67%.
End result… if you pick a series that doesn’t account for debt, and you leave out recessions that may have been caused by the guy in office, and you ignore the story line the GW administration is peddling, you can show that Republicans underperformance on the economy is not quite as bad as if you do none of these things.
I hope we can reach the following conclusions…
1. the economy does not perform as well when the President is a Republican than when the President is a Democrat
2. The difference is not due to
d. The business cycle
e. the Fed, which in fact seems to favor Republicans
So what’s left? From what I can tell, what’s left is policy or coincidence. And given the number of series I’ve looked at so far, the coincidence explanation seems to be somewhat frayed. And I realize to some, the idea that policy is the explanation is unpleasant. Which brings us to Arthur Conan Doyle and the words he wrote for Sherlock Holmes: “Once you eliminate the impossible, whatever remains, no matter how improbably, must be the truth.”
Note… all sources of data used in this post are described here, in the earlier post.