Comparing Presidents, Real GDP per capita…All the Lags
by cactus
Comparing Presidents, Real GDP per capita, All the Lags You Can Eat Three Ways From Thursday
I didn’t really wanna write this post, but I keep getting told that when you look at how Preznits did on the economy, lags, lags, and more lags are what matters. I’d like to move on to more useful stuff (i.e., back to how taxes, oil prices, etc. affect growth) so I’m going to bite the bullet and try to cover everything lag related here and now.
Now, before I start, every single bit of information in this post comes from the BEA’s NIPA Table 7.1, line 10. The data and the analysis are also shown here.
To recap the last few episodes, data goes back to 1929, and we looked at the growth rate from the full year before a President took office to his last full year in office… that is to say, the baseline from which he was measured was the period before he took office. For Presidents who left office early due to death or excessive Nixonizing… if they lasted into the second half of the year, I considered that a “full year.” That leaves this as the recurring, somewhat inconvenient character with halitosis and a big ol head of lettuce in his teeth:
Graph 1: Annualized Growth in Real GDP per capita
Perhaps the worst offense in that graph is the FDR performance, and over the past few weeks I tried a number of things to tone that sucker down… but even if you stick to the period up to the ’38 recession he still outshines everyone. So I’m going to pick a period where FDR is safely out of the picture – I’m going to leave out his term, as well as that of his illustrious predecessor and his successor. (I should note – reader Cantab has noted that if you make FDR responsible for only the recessions that occurred during Ike’s administration, FDR no longer looks so good. (Thanks for the tip Cantab!) That also has the advantage of focusing on a period of relative stability with no direct superpower v. superpower global wars or Great Depressions.
Now, to lags… lags are one way to assume that a President’s policies don’t have an immediate effect. But lagging by a year, say, assigns to one President some of the growth which depends on his successor’s behavior. For example, if you lag Carter’s term by one year, you get Reagan’s first year, a year in which Reagan’s long pre-advertised tax cuts came along. Ditto Clinton and GW. Which would mean that you essentially mean that Reagan’s first year in office owes more to the policies of a man that was no longer in office than to the policies that everyone knew Reagan was going to put in place at least since the previous November. For that reason, I prefer to simply leave out the first year of a President’s term to putting in lags, but no matter…. below are graphs showing the real GDP per capita by President, in one case leaving out each one’s first year in office, in the other lagging by one year:
Now, say you want to assume that it takes a full 2 years before a President’s policies have any effect. Thus, if one fine November some slick dude like Clinton tells folks their tax rates are going to be a-rising in the following year, not only will that have no discernible effect when he raises taxes, it won’t have any effect two years later. Put another way… you’re assuming the American public is incredibly dense, because people catch on awfully slow. Now, if that’s your assumption, here’s what it looks like:
Ford no longer looks all that hot in the top graph… because he’s no longer there – the man only served two years, after all, so leaving out his first two years drops him out completely. And Dems still look better than Reps. But in the bottom graph, where we’re talking true lags, Reps marginally outperform Dems and Ford is the best performing of all the Republican Presidents.
Now let’s get more extreme… say we’re going three years before a President’s policies have an effect. Below are graphs for annualized growth in real GDP per capita when the first years of the President’s term are left off, and for annualized growth in real GDP per capita with three year lags:
Well, this kinda gives us mixed results. We’re finally showing what everyone knows is true, namely that Reagan is the bestest Preznit evah in the top half, but it shows Dems outperforming Reps. The second graph – the lag version – no longer has Reps outperforming Dems, but its close. Ford remains the best performing Republican President.
Let’s go with four years:
I’m not going to comment much about this, except to note that the top graph obviously shows the Presidents who served at least one full term plus one year. Also, there’s no point in dragging this charade forward any more since its obvious where things are going.
So let me close this off with a comment… anyone who wants to argue that the data (cherry-picked to leave out FDR) shows that Republican Presidents follow better economic policies than their Democratic counterparts had better understand that there’s only graph in this post that allows you to tell a story that is even almost-kinda-sorta compatible with that point of view. Which means that you had better be familiar with the implications of that graph. That is to say, if you are going to insist that Republican Presidents are more growth-oriented than Democrats, be prepared to:
1. explain why no President has an effect on the economy for his first two years in office
2. say it loud and proud: Gerald Ford is the guy all Republicans should seek to emulate
—
A reminder… the data comes from the BEA’s NIPA Table 7.1, line 10. The data and the analysis are also shown here.
—
Now if we can put this lags thing to bed, maybe we can go back to trying to figuring out the why of all of this. Underperforming someone as hapless as the typical Democrat occupying the Oval Office should not, frankly, be difficult, and the failure to do so speaks of some seriously deluded policy and implementation.
___________________________________________
by cactus
Cactus,
I didn’t really wanna write this post, but I keep getting told that when you look at how Preznits did on the economy, lags, lags, and more lags are what matters.
Wouldn’t be more accurate to say how the economy did while certain presidents were in office? When you say its how the Presidents did on the economy you imply that a presidents policy was the driver for the result. When pressed you say that you are just showing the data and are not saying one president was better or worse then the other or their policy caused the economic environment at the time.
Clinton had great numbers but he never had a policy for growth. He tried healthcare, failed, and then that was it for him. Interest rates were lower under Bush then Clinton, and there lower under Obama than either Clinton or Bush. Clinton made some banking reforms that were supported by republicans, and many are now blaming these reforms and causing the recession that impaced both Bush’s and Obama’s economic numbers.
Probably the two critical elements that you analysis misses isthe significant changes in technology. Under Clinton we had information technology and the internet take off dragging the stock market and consumer spending with it (and tax receipts). I suspect the same sort of technological advancement may have taken place in the 1960s with the completion of the interstate highway system and new technologies such as the computer and plastics. I’m pretty sure i’m right about the 1990s and need to do some research on the 1960s.
On presidents:
The Keynesians were:
FDR (D)
Truman (D)
Ike (R)
JFK/LBJ (D)
Nixon (R)
Ford (R)
Transition:
Carter (D)
Supply side presidents
Reagan (R)
Bush (R)
Clinton (R)
Bush (R)
TBA (when determined)
Obama (D)
Given that you have presidents from both parties that are Keynesian and Supply Siders I don’t see the value in comparing them by party since presidents of different parties pretty much had the same economic policies (although hands down the democrats are the party of the big war).
Cactus, did you do an “oil price” piece a few years ago?
cactus:
I triple dog dare you, can you do this with one hand tied behind your back??? with eyes closed?
Run,
A better challenge would be for him to come up with an original idea. He’s done this same column three times in a row now. He’s picked a straw man with this leading and lagging times to measure irrelevant criteria.
http://en.wikipedia.org/wiki/Unemployment
Perhaps the worst offense in that graph is the FDR performance, and over the past few weeks I tried a number of things to tone that sucker down… but even if you stick to the period up to the ’38 recession he still outshines everyone.
FDR had the worst unemployment record than any other president in the 20th century. And Cactus says he’s the best the democrats have. This is so weird since he’s the worse. Anybody with a brain would highlight Clinton’s unemployment numbers. They don’t bet better than that.
On growth he’s lousy too. FDR only did a fair job at bringing back the level of economic output that his predicessors had achieved in 1929. Basically all we had to do was put existing resources to work like they did in Singapore and now in China. But all this new deal junk with its WPA got in the way and it took much longer then is had to. This is the take away for today with Obama and the democrats wanting to enact policy that will prolong this period of economic weakness.
If you’re going to use unemployment, cantab, shouldn’t you start with the unemployment the president inherited and see how it changed under that president? Of course you should, if you’re being honest, and when you do that FDR is golden.
Cantab said: “FDR had the worst unemployment record than any other president in the 20th century…”
And hospitals are obviously disasterous places to go to … look at all the sick people they have!
Noni
I’m always honest. FDR inherited employment of around 25 percent. By 1938 he had it down to 19 percent. That’s not very good. Just prior to the depression unemployment was around 5 percent. So if FDR hit 5 percent maybe after 4 to 6 years of his economic policy I would say it was a jobs well done. But history shows unemployment at around 15 percent 8 years into his presidency. I think this is poor performance. And I blame it on Keynesian economics and leftwing agencies such as the WPA.
And Noni make a Non Sequitur.
ASSUME CETERIS PARIBUS.
Have you accepted Jesus Christ as your savior lately, too?
Well, actually, other countries that were much more aggressively keynesian and didn’t fall for “balancing the budget” recovered a lot faster than we did.
People need to remember that FDR had to fight against the conservatives for his program. The conservative would have preferred that 25% of the US population starve to death. There were no social program then so if the conservatives had gotten many of us would not be here since our parents would have starved to death. I feel I need to explain the choice once more: little socialism or the death of 40 million Americans.
Cantab:
I believe we (or perhaps it is just I) are laughing at you because you are being “silly” and not worth the effort of a serious discussion, hence the “triple dog dare you” to cactus. You can say what you may here; but, what you say does not entitle you to a serious comment in return.
little john,
Oil has been a part of a few pieces on the explanation side, but also I have a recollection of doing the change in oil prices over the length of each President’s term using data from one of the EIA’s AER (Annual Energy Tables). I’m planning to look at oil again.
Note that… this look at Presidents to me right now is somewhat backward looking… the first book is done except for copy edits… and I’e been throwing together some ideas for book 2 which does not look at Presidents at all. So we’ll see how many of these “by the President” looks I can do before going nutso, though they kind of keep in the right mindset for when the book eventually comes out in Q3 of 2009.
Clinton(R)? And a supply-sider to boot?
The big delineation is on the tax side… I guess I’ll have to put up a graph CoRev seemed to inadvertently suggested.
Cantab,
“FDR had the worst unemployment record than any other president in the 20th century.”
We’re looking at rates of change. FDR managed to drop the unemployment rate by 1% a year from ’32 to ’40 according to the unemployment estimates you believe… and those don’t even count the folks in the WPA who were putting in 40 hour weeks building dams and roads as employed.
You might as well complain FDR also had the lowest real GDP per capita of any President other than Hoover.
“On growth he’s lousy too.”
As you said, I’ve had this post several times. We’ve looked at FDR only through the ’38 recession (i.e., cherry-picked the worst period of his presidency) and he still put up faster numbers than any other President at increasing real GDP per capita.
?
Cactus, concentrating on rates of change can be deceiving. Looking at today’s numbers we have unemployment just south of 5% under Bush. If we have FDR’s performance under “O” we will get back to ~7%. What you are telling us is those numbers are better under “O” than Bush?
Really?
We have our own little test tube version of economic policy underway with this administration. By the end of his first term we should be able to compare the past two Prez’s performance. One will clearly be better, and we will be able to look back on the policies that made it so.
Run,
Let my reply to your post as if you had said something of substance rather than the following:
I believe we (or perhaps it is just I) are laughing at you because you are being “silly” and not worth the effort of a serious discussion, hence the “triple dog dare you” to cactus. You can say what you may here; but, what you say does not entitle you to a serious comment in return.
Rdan lets cactus posts these columns as if there were serious analysis. He posted the same column three times and really had not made any improvements to them.
Here are some of the shortcomings:
1) He does not say what economic policy was being followed by the president of the time. So he mixes up Keynesian republicans and supply side democrats.
2) He fails to account for rising energy prices that had major positive and negative effects on the economy.
3) He does not identify major economic trends such as the with technology in the late 1990s and possible the 1960s.
4) He has not support from other serioius analysts in the economic progression.
5) He claims that FDR was the best president even though pre-war he had the worst record of unemployment than any other president in the 20th century. And on growth he fails to apply the anaysis in Krugman’s foreign “The Myth of Asia’s Miriacle” where krugman shows its not superior policy that causes rapid economic growth but rather the deployment of resources. The key for the Asians was to have a high savings rate. But for FDR the infrastructure was already there so all he had to do was calm the economic environment and let get back to where it had already been.
Cactus seems to be firing blanks at this criticism and a resorted to making the same post 3 times.
In the FWIW category, both the Schwartz Bayesian Information Criterion and the Hannan-Quinn Information Criterion tests recommend a lag of 1 year following the year of inauguration.
It would be interesting to see this graph in relation to what party held congress (since they have the authority to tax and spend) and not what president was in office.
Once again these graphs do not show any reason to vote for a Dem President vs. and Rep President. None at all. Why? easy:
1) Jimmy Carter – enough said
2) JFK/LBJ – They almost managed to do the nuclear dance with the Soviets and pushed us whole hog into Vietnam. Passed legislation that effectively gutted the Black family. Yea, I’ll take Ike’s performance over this any day.
3) Bush Sr – Probably the most underrated President of the 20th century. Managed the peaceful transition of the Soviet Union into Russia. Cobbled together a huge multi-national force that destroyed Saddam’s Army and liberated Kuwait. Passed tax increases he felt were necessary for the economic well being of the US against huge Rep opposition – setting the stage for the low deficit Clinton years and probably costing him his second term.
4) Can anyone provide a logical reason why they feel that the economic performance of the US would have been any different during 1992-1996 as the US entered the information age if Bush Sr and been re-elected instead of Clinton? I doubt it either.
5) Given all of Clinton’s huge economic tailwinds (Bush Sr raised taxes, peace dividend from the end of the cold war, huge economic expansion due to the information age) and all of Bush Jrs huge economic headwinds (Clinton’s technology bubble bursting, 9/11) AND if we beleive Presidents have that much effect on the economy that catus insinuates: then either Clinton grossly underperformed or Bush Jr performed outstandingly. If you thought Clinton was great you have to conclude that Bush Jr did a bang up job. If you thought Bush Jr. was bad then you must beleive Clinton grossly underperformed.
Lastly, correlation does not mean causation. From a policy perspective was JFK much different from Bush Jr.? In what way? You have not proven anything other than the historical GDP growth during each Presidency. You sure as hell did not give me a reason to pick Carter over Reagan, Clinton over Bush Sr, Carter over Ford. We are back to the 1-dimensional analysis I have harped on from the beginning. There is no ‘why’ answered. And I’ll trade Ike’s economy for the JFK/LBJ one, given the other baggage that went with these Dem Presidents, every day of the week!
And for all you whacking cantab, he is the only one here trying to answer the “WHY” question.
But we are getting a perfect test case in Obama and a totally Dem controlled congress. We should be seeing 5% GDP with 4% unemployment any day now. Plus I’m still waiting for my poony I was promised!!!
Islam will change
cactus,
Not for the book, since its a partisan publication, you should re-do you graphs starting in 1944. Take off the outliers that screw up the data (Hoover and FDR). Then see what’s up. It might be a bit more illuminating – also do it by 4 year increments.
Just a thought
Islam will change
Guest (please pick a moniker)
I beleive cactus has done that, plus one with Pres/Congress make up (4 colors), and their was little if any correlation with the economy. Thus doesn’t push the meme that the party of the Presidency determines economic results. (I’m going off memory here).
Islam will change
Cantab, growth policies aren’t the simple-minded things the Club for Growth claims they are. They aren’t the simple0minded things that your comment implies they are. Simply cutting taxes and regulation doesn’t guarantee growth, as cactus has amply shown, so it is dishonest to imply those measures constitute a “policy for growth”.
That is one of the values of the exercise cactus has undertaken, and which you seem ever-eager to wiggle away from. You don’t know what leads to growth. That much is obvious. It may be true that nobody can know with great assurance what leads to growth. What we can do is test the truth of the bald claim that Republicans are better economic managers. Turns out that claims is false. Turns out that the economy performs better under Democrats, just about any way you slice it.
Your insistence that some fact or circumstance is exceptional and detracts from the Democrats while excusing the Republicans is so reliable as to be laughable. When every excuse is for a Republican, you are, well, making excusees. One very good reason for looking at the data as cactus has done is that it avoids making excuses.
cactus, I think you need to give more credit to the persistence of household spending. Economists have, over the decades, given more and more credence to forward-looking behavior, so that an anticipated tax change may have immediate consequences. Well, consumption taxes surely do, but the data suggest other forms of taxes don’t change household spending plans much. So it may be that the policies of Reagan and Clinton do need to be tested with a lag, because household take time to respond even when they know hcange is coming.
So, I’m going to say this again, but in a different way than above. Cantab is insisting on a different form of analysis, and along the way, claiming only the form he asks for is valid. That’s nonsense. Part of the problem with the type of analysis that Cantab insists on is that it can come down entirely to cherry picking and argumentation. If one were, say, a bought-and-paid-for partisan spinner, one could just say tech/oil/weather/planets/war/el nino/solar flare till the cows come home, always claiming that the other side has benefited from good luck while the side you back has been the victim of the fates. If you look at the categories that Cantab uses, they consist largely of begging the question (in the original sense, not the “I don’t know what begging the questions means, so I’ll just guess” sense). By insisting on categories like “supply-side Democrat” he is jiggering the discussion in favor of his own views.
Now, if we were looking just at two presidents, one from each party, the approach cactus has taken wouldn’t be worth diddly. When looking at more than just two but still a small number, the real question is, do we get a strong enough result to overcome the problems of a small sample. I will leave that to the statisticians, but will observe that the result is quite strong and quite persistent.
Finally, I’d note that Cantab’s trick here is to set himself up as the final judge. If cactus doesn’t address Cantab’s every objection, cactus isn’t doing legitimate analysis. Well, how convenient, since Cantab seems to have a bottomless bag of objection (a trick straight out of the push-back handbook). A standard that is utterly arbitrary and also has no hope of being satisfied, since Cantab, as the self-proclaimed judge, can simply declare himself endlessly dissatisfied.
Lots of others have raised objections to what Cantab has had to say, and I personally am not satisfied with any one of Cantab’s answers. He isn’t doing real analysis, because I say so. He isn’t raising valid objections to cactus’ work, because I say so. C’mon, Cantab. Live up to my standard. That’s the game your playing, and we all want to play, too.
Concentrating on anything can be deceiving. That doesn’t mean it is deceiving. Certainly, ignoring rates of change will lead us to deceive ourselves. The question I’d ask is, do we have reason to think cactus has used rates of change to deceive us in the case(s) he mentioned? If not, then observing that it could be deceiving doesn’t amount to much.
I also find it funny that people keep trying to work Obama into the discussion. We don’t have data on Obama yet, which leaves people free to let their partisan little imaginations run wild. This exercise begins with the data. When the data prove uncomfortable, we see CoRev and Cantab running away from the data. Funny, funny.
LOL. I think the price of crude is a huge issue for the U.S. economy.
“That’s not very good.” Says Cantab? At the same time as claiming to be honest? Way too much of Cantab saying Cantab gets to decide, especially when Cantab keeps saying “so my guys win” based on his own utterly arbitrary rules. Falling unemployment, from any particular rate, is generally a good thing. Telling us we need to ignore a rapid fall and concentrate on a level is, what was that word? Oh. Dishonest.
Kharris,
Nope.. None of the data proves either of these statements as true OR false:
“What we can do is test the truth of the bald claim that Republicans are better economic managers. Turns out that claims is false. Turns out that the economy performs better under Democrats, just about any way you slice it. ”
Once again correlation is not causation. Is it really that hard to understand?
For the rest see my comments below where I (once again) rehash the arguments of old.
And yes Obama will be a perfect test case of this theory that the Party of the Presidents determines the economy. So far its not looking good….
Islam will change
“Clinton had great numbers but he never had a policy for growth.”
Ah! That’s the secret!
😉
Cantab
Clinton had no policy for growth?
his tax raise.. that no republican voted for… was “supply side”?
and according to you, with the tax raise, the technology boom shouldn’t have happened. it should have been killed in the crib by high taxes.
oh, yeah, I forgot the big clinton war.
buff
correlation is not causation
non-correlation is causation
correlation is non-causation.
ah. i see.
But Cantab
dear, YOU are the straw man.
and a soggy one at that.
kharris
cactus has not looked at “a small sample.” he has looked at the whole damn universe of presidents since 1929. there is huge difference between applying statistics to “a sample.” and trying to apply a statistical argument to every member of the set.
just to bore in: if i pick ten balls out of a barrell containing ten thousand red or black balls, and 7 of the balls are black, i can argue that “the probability” is that 7 thousand of the balls in the barrel are black with odds of so and so of being wrong. but if i look at every ball in the barrel and find that actually 9997 of them are black, then that’s the answer. no “statistics” about it.
Now if we can put this lags thing to bed,
Cactus,
This post does the opposite. Using the 2 year lag, (R)’s outperform (D)’s and using the 3 year lag (D)’s outperform (R)’s, but both by such insignificant margins that they are essentially equal.
Cantab
here you pass from being merely silly to being psychotic or just evil. the depression started before FDR was even elected. and the United States of America in 1932 had different problems from Singapore in 1990 or whenever you are referring to.
no, CoRev
you won’t.
lack the necessary objectivity.
Cantab
in your brain a “non sequiter” is anything that leads to a conclusion you don’t want.
Buff
I would not argue with your political preferences. But you overlook the fact that all of your arguments depend upon a special reading of “the facts.” Whereas Catus merely presented “a fact,” to which you can draw your own political conclusion.
And Cantab is trying to answer the “WHY” question “Why are the facts against me?”
But he has learned from the Republican spin machine that if you talk fast enough and long enough pretty soon people forget the facts and just go by how they like to feel about things.
oh, yeah, forgot to add:
correlation is not causation
correlaton is non-causation
non correlation is causation
logic will change.
Clinton (R)
Sorry, that was I typo. I meant Clinton (D). The reason why I have Clinton in the Supply side list is even with his tax hike the rates never got back to the level of Keynesians presidents. Kyoto got no votes and was not ratified. He did alright on free trade although he did little on his own initiative. Clinton reformed welfare and said the age of big government was over. So between him and the republican controlled congress the 90s was a supply side decade.
Coberly: South African life expectancy is correlated with U.S. Defense (Offense) spending. Whenever you wish for cuts to the defense budget you are implying you want South Africans to live shorter lives on average.
Your analysis ASSUMES that demographics (speaking of age distribution of the population) have either remained constant, or the changes have insignificant effects on GDP. Your analysis ASSUMES that technology has a constant or no effect on GDP growth over time. Your analysis ASSUMES that the rest of the world (think wars) has a constant or no effect on U.S. GDP growth.
Coberly,
I’m proud that no republican voted for tax hikes as i’m proud that none have voted for healthcare and only a few voted for the stimulous bill. Things got confused with #41 breaking his no new tax pledge. But now they have credability again.
On Clinton he raised taxes, lost healthcare, so he raised taxes but not spending. Any economist left or right will tell you this puts a drag on the economy. The Clinton defenders used to make the Rubinomics argument that raising taxes lowered the deficit which was the cause for falling interest rates. But since the rates kept falling over the last 9 years in the face of moderate to massive deficits this means the rubinomics argument does not hold water. So Clinton has no economic legacy other then being the beneficiary of the technological revolution of the 1990s. Or maybe he can viewed as a success for triangulating the keynesians out of the picture.
Kharris,
Cantab, growth policies aren’t the simple-minded things the Club for Growth claims they are. They aren’t the simple0minded things that your comment implies they are. Simply cutting taxes and regulation doesn’t guarantee growth, as cactus has amply shown, so it is dishonest to imply those measures constitute a “policy for growth”.
Its not dishonest because I don’t see the government as a major force for economic growth and I want them to the degree possible to get out of the way. If you think in terms of an optimization problem lowering regulation is lowering constraints and can never achieve a better solution in an optimization problem by adding constraints. And taxes hurt because they get in the way of the free exchange between consumers and businesses, lowering consumer & producer surplus and forcing a small deadweight loss on the economy. We need government but there is a strong case for keeping it small.
coberly,
cactus says in total – there is a correlation between the party of the Presidency and US GDP growth. Thus Democratic Presidents are better on US Economics than Republicans and thus you should vote Dem. Its obvious on its face that the first sentance (correlation) is not connected to the second (Dems Presidents caused it to happen). At best you can say is that cactus has not connected them in any logical way. Where I do analysis, its called 1-Dimensional Analysis and is laughed out of the room. (Sorry cactus – but without the “WHY” all you’ve done is make pretty graphs). The facts are not for or against cantab. They just don’t support cactus statement with since there is no ‘WHY’ there.
coberly – I also clearly asked questions that no one has ever been able to answer here at AB that strike at the core of the premise. 4 & 5 specifically. Heck for all we know Clinton’s tax hikes damped the tech sector growth so we got his desultory performance instead of an LBJ stile 5+%…
(BTW I am NOT saying that the Reps are better either – I don’t believe the Presidency has that much effect – though with the nationalization of 16% of the US economy that may change)
“correlation is not causation” Live it.
And since your back on the Reps are evil, please square that with the fact that Obama has continued or expanded every “evil” foriegn policy inititive that Bush and the Reps/Dem congress overwelminigly voted for. I see no roll-back on Presidential power or US government secrecy. How is closing GITMO coming? Obama and the Dems are in charge. We could have been out of Iraq 6 months ago easy. GITMO could have closed in a week (how hard is it to put all these guys into a plane and fly them into Afghanistan and cut them loose outside the gates of Bahgram Airfield?).
You seem to keep conveniantly forgetting that the Dems overwelmingly supported Bush on his entire foriegn policy. You forget that Pelosi and Reid could have ended the Iraq war in 2007 by cutting off funding. Instead they voted overwelmingly FOR Bush’s budgets.
And I’m not forgetting all you Angry Bears that screamed about Bush’s deficit spending (which I joined in on) but when Obama (D) is spending faster than Bush’s wildest dreams all I hear is crickets chirping.
So the people are not forgetting what’s going on. But coberly you sure seem to be forgetting…
Islam will change
“Once again these graphs do not show any reason to vote for a Dem President vs. and Rep President. None at all.”
Indeed!
What it does do is debunk the notion that Rep administrations are better for the economy than Dem administrations.
Min,
It really doesn’t even say that.
Tell me what the difference in GDP growth would have been if Ford and been re-elected vs. Carter?
Same question: Bush Sr. v Clinton?
Why does anyone beleive (does anyone beleive?) that the world and US economy in 1938 is comparable to 1956? or 1976? Or 1992? Using only 2 variables….
Like I’ve said – its one-dimensional analysis that means nothing (but great to use as propaganda for the masses!!)
Islam will change
In making a personal attack against me you are adding nothing to the discussion.
The more I dig the weaker Cactus’s analysis is revealed to be lacking contents.
This lastest items is that I looked a Romer’s papers on economic policy during the 1950s and 60s. Both Truman and Ike really did not have great numbers. Ike had decent numbers but he had 3 recession. So one (not cactus) might ask why.
In the 1950s the government was really serious about trying steer the economy and also to not run persistent deficits. A short sharp recession has the tell tale signs of a fed induced recession. The recession of 1958 fits this description (and maybe the one in 1960) also. So Ike ate a couble of recessions for the sake of beating inflation — and he also put a drag on economy by paying for his interstate highway program.
Things changed in the 1960s. Kennedy lowered taxes, and then Johnson increase spending, escalated a war, and then pushed off trying to pay for it until the very last year he was in office. But he did raise taxes in the last year and passed the tax high along with inflation to Nixon who suffered the consequences. Thus in this case JFK/Johnson inheritied and economy where their predicessor had eaten several recession and passed along an economy with low inflation and they cut taxes. Then they passed their economy with built up recession and a new tax hike to Nixon. So you have a democrat taking a good situation from a republican and passing a bad one to the republican that can after.
With Carter like with all Keynesians he had on again off again monetary policy that drove inflation sky high which he passed to on to Reagan who was left holding the bag.
You know, were starting to run out of economic periods.
This looking at leads and lags is pointless. Two key democratic administrations, JFK/Johnson, and Carter inherited pushed the negative aspects of their economic policy to the adminstation that followed. Johnson pushed his inflation and surtax to Nixon. Carter pushed Massive inflation to Reagan. Bush turned over a pretty good recovering economy to Clinton. And Ike turned over a fiscally sound low inflation economy to JFK (although one where the taxes were to high — which of course provided the opportunity to lower them to give the economy a boost).
Obama — he got screwed. Inherited and economy set to accelerate downward.
Coberly,
You’re going downhill with this post.
buffpilot,
When Republicans claim that only they know the secret to economic growth and that electing Demcrats will doom us all, that is one dimensional analysis. Cactus’ point is that even taking on the Republicans on their own terms, their claims don’t hold up. It’s just a fact that the economy does not grow faster under Republican Presidents than it does under Democratic Presidents. You could believe that it’s just all coincidence (i.e., keep telling yourself that correlation is not causation). You could concoct all kinds of bizarre lag periods to try and explan away the results, but after awhile it all begins to look a lot like some Ptolemian system of an earth centered solar system, with an evergrowing number of epicycles. That’s what Cantab has been engaging in. Or you could believe that Democratic Presidents tend to be somewhat less bound to ideology and more open to just going with what works irrespective of economic ideology. That’s pretty much my take.
You asked why Democratic economic policies are apt to be more successful than Republican economic policies. The first obvious difference is that Democrats believe in two curves, and aggregate demand curve and an aggregate supply curve. Republicans…especially post-Reagan Republicans, only believe in a micro-market supply curves. When you take Real Business Cycle (RBC) and boil it down to its essence, that’s pretty much what you get. And then you marry it up with an anti-tax ideology, give it a name and call it supply side economics. This is fine as long as there is no slack in aggregate demand; but when the economy goes into recession the supply siders have no answer. And they have no answer because disciples of RBC economics believe that there cannot be any such thing as a recession or involuntary unemployment. Democrats do believe in aggregate demand curves and are perfectly willing to stimulate aggregate demand with fiscal and/or monetary policy when private sector investment falls flat. And that is pretty much why Democratic Presidents tend to do better than Republican Presidents.
Cantab,
Johnson pushed his inflation and surtax to Nixon.
Huh??? So are you trying to tell us that inflation would have been lower if LBJ had not instituted a 10 percent surtax??? Let me help you out here. The economy under LBJ was overheating and the rationale for the surtax was to try and cool the economy down. Nixon was responsible for Phase 1, and Phase 2, and wage & price controls, and a hundred other godawful ideads. They even coined a term for it: Nixonomics.
Carter did push inflation onto Reagan, but Carter also gave Reagan the gift of Paul Volcker, without whom it’s pretty hard to see how the economy would have licked inflation during the 80s.
CoRev:
FDR unemployment numbers were bad if one doen’t count all of those doing the dig holes and fill holes work, working on the dams, roads and infrastructure, and being employed as artists, photographers, etc. for various other projects. Those people were counted as unemployed even though by today’s criteria they were working and should have been counted as employed. Back those people back into the count, and FDR’s Unemployment Numbers change for the better. Someone else over in Europe did the exact same thing with the autobahn and getting his country ready for war.
2slugs: Strange argument. You feel like you’ve accomplished something by being marginally more intelligent that the most retarded people in the world?
Southpark was dead on when it said that in elections we have the choice between a giant douche (Church of Democrats) and a turd sandwich (Church of Republicans).
For those that want to state an alternative hypothesis to GDP growth is greater under Republicans, what is the Beta (or conversely Power)?
sammy,
Read to the end of the post. It indicates what baggage you have to carry if you’re going to hang your hot on the two year lags. My guess is that no Republican is prepared to carry those bags.
Slugs,
Huh???
You can direct your Huh??? to the Romer family. Try reading some of their papers before commenting. Try to remember that I very often look data or read part or all of a paper before making a comment.
Here is Christina D. Romer (She works at the Whitehouse now) Starting a talk.
I suspect that like many visitors to this library, I find much to admire in the Johnson
administration: its commitment to civil rights, the war on poverty, the expansion of the social safety net. The theme of my talk, however, will be that its conduct of macroeconomic policy was not one of them. Indeed, I will argue that far from being the high point of economic policymaking in the postwar era, the 1960s represented the beginning of a long dark period formacroeconomic policy. Both monetary and fiscal policy actions were seriously misguided in the1960s, and led to undesirable economic outcomes.
slugs,
You are obviously not reading what I posted. So I will make it perfectly clear. None of the data posted by cactus either lately or a few years back can get you to the statement that GDP growth is better under a Democrat President than a Republican (or vice a versa). Neither cactus or anyone else here has been able to make that connection. Jay’s rather funny example is perfect.
Nor can you say that Democrats have been more successful the Republicans. The data is not there either. Like I said before. All you can say is that during the times since Hoover the GDP has grown more during periods when Democrats have been President than Republicans. You can also say South African life expectancy correlates with US Defense Deptartment . Both are meaningless – no link to a causation is ever mentioned.
We had a random walk – I would say that Volcker was far more important to Reagan’s economic success than Reagan. Clinton had nothing to do with the tech explosion. He just happened to be sitting President when we went into the information age.
I’ll repeat again – does anyone on this board believe that if Bush Sr had been re-elected we would not have had the information age explosion?
And Democratic Presidents in the period we are discussing DO NOT make better presidents than the Dems on the whole. Carter was abysmal. JFK came within a hairs-breath of getting us in a nuclear exchange with the Soviets, and with LBJ gots us into Vietnam. I give Truman good marks and Clinton. On the R side we have Ike who was very good. Nixon, for all his warts, ended Vietnam and opened up China – then blew it all in Watergate. Reagan brought down the Soviet Union and got the economy back on track after the disaterous Carter years. Ford was in very long and best that could be said is he got us past Watergate and Vietnam crap. I’ve mentioned Bush Sr. before, and I’ll take Bush Jr. over his opponents (Gore /Kerry) every day. On the whole a mixed bag.
And I disagree with the inital premise from the start. Presidents don’t have that great an effect on the economy.
cactus puts up some interesting data. Never argued with it. Just the data doesn’t support the incredible leap of logic to saying that Dems are better than Reps on the economy. For that you would need a far more in depth analysis – far more than the one-dimensional analysis presented.
So when is Obama getting us back to LBJ levels??? I’m waiting for my 5% unemployment and 5% GDP growth…and a pony!
Islam will change
Cactus,
Christina Romer,
Both monetary and fiscal policy actions were seriously misguided in the1960s, and led to undesirable economic outcomes.
The more we do this the more your story sinks. You have JFK/LBJ as one of the good periods yet Christina Romer uses their time in office as an example of misguided policy leading to undesirable economic outcomes. This supports my arguments and contradicts yours.
run
just for the record a lot of those holes dug and filled by FDR’s boys are still around. people use ’em for stuff. libraries, dams, even ski resorts.
Kharris,
Falling unemployment, from any particular rate, is generally a good thing
Well its better than it going up. So you win that part of the point. But I don’t think its a good performance. Unemployment at 25 percent leaves a lot more room from improvement then unemployment at 4 percent.
My main point in looking unemployment is to show that FDR’s peacetime Keynesian economic policy never led to an economic recovery. So its not the right thing to do now.
jay
actually his “analysis” assumes nothing. just the facts, man.
your argument proves that people who hate democrats will grasp at any straw.
you may have noticed that the world is a complex place. so you can always find a reason why something didn’t work out the way you expected. but then you ought to have a hard time arguing with a straight face that things, if you only vote Republican, are going to turn out the way you want.
good thinking, there, jay.
Cantab,
You can direct your Huh??? to the Romer family.
A little tip to avoid embarrassing yourself in the future. Christina Romer and David Romer are not related and are not married despite the coincidence of having the same last name and both being at Berkely at the same time.
Getting back to your earlier post, the point that you were missing was that the surtax dampened inflationary pressures. Your goofy post suggested that the surtax fed inflation.
And oh by the way, no one denies that there weren’t plenty of misguided economic policies in the 1960s. Usually people have in mind the idea of “fine tuning” the economy. Still, despite all those misguided policies of the 1960s, the period as a whole seems to have given us pretty good economic growth overall, as cactus’ numbers demonstrate. The 1960s were not the only dark period for macroeconomic policy….the early 1980s prove my point.
cactus,
It indicates what baggage you have to carry if you’re going to hang your hot on the two year lags
Why do I have to carry any baggage at all? With a 2 year lag, R’s outperform D’s. The data is the data. The facts are the facts. I’m just calling ’em as I see ’em. yada yada 🙂
buff
sorry, i did not mean to imply Republicans are evil. i meant to say that Cantab’s reasoning is either insane or evil. that was not fair to you, because most people don’t share my perverse metaphysics.
so i’ll take back the “evil” part, and let it go at insane.
and nothing i say should EVER be taken as an endorsement of Dems. or Obama.
buff said (again)
“I’ll repeat again – does anyone on this board believe that if Bush Sr had been re-elected we would not have had the information age explosion? “
No. but what the R’s say, every day, is that with a tax increase the information age explosion would not have happened. Tax increases kill jobs. Tax increases kill growth. Tax increases kill enterprise. Tax increases kill innovation. Stuff like that.
buffpilot,
None of the data posted by cactus either lately or a few years back can get you to the statement that GDP growth is better under a Democrat President than a Republican (or vice a versa).
I don’t think that’s what you intended to say. Obviously, cactus’ data shows that economic growth was in fact greater under Democratic Presidents than under Republican Presidents. I think that what you intended to say was that this fact alone does not demonstrate that Democratic Presidents caused better growth. And that’s true. But at some point you have to start spinning some stories to explain the rather lopsided result. Sometimes correlation does in fact suggest some causal relationship. At some point you have to explain away the amazing coincidence repeated over and over and over. I offered one possible explanation. To repeat…the problem with Republicans is that their understanding of economics is incomplete; it only includes the supply curve and Republicans completely ignore (and sometimes even outright deny) the existence of an aggregate demand curve. Democrats look at both curves; Republicans only talk about one curve. It’s no surprise that Republicans aren’t as successful since they ignore half of the problem.
You asked if things would have been any different if Bush 41 had been rel-elected. Yes, they would have. We would not have had the 93 tax hike, which was critical in getting the Fed to cooperate. I’m one of those guys who believes Clinton was responsible for about 30 percent of the good economic news of the 90s. Things probably would have been pretty good just because the stars were aligned just right; but I don’t believe they would have been as good as they were. Clinton turned the fiscal situation around.
Now let me turn things around and ask if you believe things would have been the same if Al Gore had won in 2000. Oh wait, Gore did win. Well, you know what I mean. I don’t think there can be much doubt that there probably would have been a mild recession in 2001, but I don’t think Gore would have made a mess of things like Bush did. We would be much better off today if Bush 43 had not been appointed President. So Presidents do matter even if they are not the only thing that matters.
Jay,
You feel like you’ve accomplished something by being marginally more intelligent that the most retarded people in the world?
There once was a poster called “Maptwo0” (perhaps you know him ;-> ) that used to hear me complain about voters being nitwits, but I don’t recall ever calling them retarded.
Cactus’ post simply puts the lie to one of the claims we used to hear from Republicans. The GOP always liked to present themselves as clear eyed grown-ups who understood business and economics. The GOP always tried to scare voters by painting Democrats as naive and soft-headed. The message was clear: vote for a Democrat and the economy will go down the tubes, you’ll lose your job and inflation will gobble up your savings. Well, the facts say otherwise. The GOP simply does not understand economics any better than Democrats….and probably not as well.
buffpilot,
We had a random walk
Actually, if you look at the way cactus presented the data he effectively used first differences, so even if you believe the economic growth under Democrats was a random walk (i.e., a stochastic trend), the fact that he was looking at y/y rates of change means that the random walk effects were canceled out…so to speak.
And Sammy, when the data don’t lie it is ours! I vote for 2 yr lags! That’s the obvious “Why” in this correlation/causation. 2 Yr lags is “THE POLICY” difference between high perfoming Repubs and less high performing Dems. Yup, that’s it! Cactus, you can now write a new book re: this economic policy difference. Wink, wink, yank yank. 😀
sammy,
Cantabl doesn’t want to use the 2 year lag thing because it messes up his theory about Ford being a closet Keynesian Democrat. I suspect that this would have come as a surprise to the Great Klutz from Grand Rapids, but that’s the story that Cantab feels he has to create. And did you know that Clinton was really a Reagan supply sider? No, really. That’s what Cantab has told us. So apparently the 1992 election was meaningless because both Bush 41 and Clinton held the same supply side views. Except that Cantab would tell us that Clinton was not being a supply sider with the 93 tax hike. And except that Clinton was not being a supply sider with the emphasis on Rubinomics and interest rates. And except that Clinton wasn’t being a supply sider by trying to cut the deficit during the “fat”years. Other than those minor details, Clinton and Reagn were just alike. You heard it from Cantab and he must be right because he learned his macro from Thomas Sargent.
Thanks slugs:
It was the temporal relationship between Greenspin and Clinton which I believe set the economy in motion. Clinton agreeing to redue the deficit and Greenspin holding Fed Rates at an equitable level. Many seem to miss the talks between the two when examining what took place during Clinton’s tenure.
Lucky conincidence “appears” to be striking every time a Dem President takes office. It must be Clotho, Lachesis, and Atropos deciding what each such do as President. For some reason The Fates do not like Republicans. How else can one explain it as nothing else does?
run75441,
Of course, Cantab insists that the whole Clinton/Greenspan agreement was just some after-the-fact fabrication that was created for Woodward’s book. He’ll tell you some junk about how Clinton really wanted to break the bank with Hillarycare and all this deficit reduction stuff was just an accident.
Slugs,
Cactus’s analysis is data mining. Putting more leads, lags, or leads with lags until you get the results you want is just more data mining.
Clinton raised taxes to pay for healthcare. It failed, the republicans took Congress and they wouldn’g do the spending increases that Clinton wanted to threatened to Veto any tax cut. Thus the stalemate and the budget surplus.
Just enjoying the exchange, as I don’t really have time for anything else. But just a point of information, Christina and David Romer are married.
http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=4048
Paul Romer is no relation to the two of them.
Ok… as you were.
Slugs,
The other factor that wipes our your argument is that interest rates have been lower under Bush, and Obama so far. This is why you and the other followers of Rubinomics keep silent now unlike earlier this decade.
Slugs,
Slugs,
by the way, you let this comment by Romer pass:
Both monetary and fiscal policy actions were seriously misguided in the1960s, and led to undesirable economic outcomes.
This undermines his entire weasly constructed argument. Romer is a democrat working in Obama’s Whitehouse and she is talling us that the Johnson/JFK economic policy were seriously misguided and led to undesirable economic outcomes. And she is predisposed to say good things about these two.
Slugs,
You heard it from Cantab and he must be right because he learned his macro from Thomas Sargent.
I don’t think you can catch Coberly for this forums economic troglodyte award. But you deserve and “A” for effort.
Cantab,
What is the NAIRU implied interest rate today?
You might want to rethink your post.
Oops. You are correct. My bad.
Thanks.
Cantab,
I think you’re the one who is “peeking” at the data and then trying to concoct some way to spin the results. And it’s pretty transparent. Why not check log likelihoods to see which lag makes the most sense? Oh wait…you won’t want to do that because it doesn’t give you the answer that you want.
Clinton raised taxes to pay for healthcare.
I don’t think anyone else remembers it that way. And it contradicts the Woodward book. The 1992 election was about deficits and the economy…that’s what got Ross Perot so much traction. The 1993 tax cut was advertised and sold as a way of getting the economy on the right foot. Hillarycare would have added new taxes (or at least that was the GOP claim at the time), so this pretty much shoots down your interpretation. The tax increase was about getting the deficit under control.
Cantab,
I at least know that there are two curves, not one. You need both an aggregate demand curve and an aggregate supply curve. I at least understand that the problem today is weak aggregate demand and that supply side arguments are irrelevant to today’s problem. When Krugman writes about Dark Age macroeconomics I’m pretty sure that he has Thomas Sargent front and center in his mind’s eye. The Rational Expectations fad has come and gone. Sargent’s brand of macro is stuck in the late 1970s along with gold chains and disco. It doesn’t speak to today’s problems. Get a new textbook.
You’re attack on Sargent’s book is groundless. He starts by presenting the classical, Keynesian, and Tobin model in a straight forward way. In the second part of the book he introduces stochastic macroeconomics. He also went on to write an entire book on dynamic macroeconomics. This latter material is just too difficult for it to have caught on as a way to teach macroeconomics. But the start of the book is they way macroeconomic models ought to be presented.
And by the way, Romer says the pre-rational expectiation economic policy of the 1970s and 1980s was seriously misguided, and let to undesirable economics outcomes.
It this last line that I’ll try to explore more if Cactus recycles this column for a record forth straight time.
Cantab,
You keep arguing with a straw man. No one is claiming that the state of macroeconomic knowledge was at its zenith in the 60s. No one is claiming that there were not policy mistakes in the 1960s & 1970s. You keep pretending that left leaning economists say otherwise. But strangely, you do seem to be implying that the state of economics was at its zenith in the late 1970s and early 1980s with the coming together of rational expectations, RBC and Laffernomics.. You forget that freshwater economics has its own set of problems. Your thinking is frozen in time. Sargent’s brand of economics had some interesting things to say back in the day, but that does not mean it speaks to all problems for all times. And this is a perfect example of what I mean by the difference between Republicans and Democrats. Republicans are intellectually trapped into one and only one economic model that gaves the same policy recommendations for every problem. You’re still living in the late 70s and early 80s. You still see the threat of hyperinflation everywhere you look. Wake up! Democratic Presidents are able to learn from past policy mistakes…that’s Romer’s point. It seems that Republican policymakers are unable to learn from past mistakes because they refuse to admit that their policy prescriptions are not eternally and universally true. This quest for a single and eternal truth is the hobgoblin of the conservative mind.
As to dynamic macroeconomics, this is not something that informs public debate. I don’t regularly watch Fox News, but offhand I don’t recall ever seeing Rep. John Boehner or Rep. Eric Cantor or Sen. Jim DeMint getting up in front of the camera and talking about Bellman’s equation, Hamiltonians and stochastic differentials. A lot of that stuff is interesting in microeconomics (e.g., oil markets), welfare economics, and it’s pretty standard stuff in finance theory, but on the macro side…not so much. And some of the more recent stuff in macro tends to support more liberal policies; e.g., corrections to net national product, environmental economics, etc.
The problem is that Sargent really doesn’t have much to say at all concerning today’s primary economic problem, which is weak aggregate demand. He’s just irrelevant.
Well cactus,
It comes full circle. Lags, now that bases are covered, have become irrelevent? eventhough you were pushed and shoved into lags as explanations offered in the past by the loyal opposition. Political language about economics doesn’t even pretend to be consistent as it masquerades for thought.
rdan,
I think we can expect the emergence of a new theory of dynamically flexible lags.
Urrrk.
2slugs, and Dan, if this was a simple system the models would be well developed and actually useful. What Buff, and the several others still arguing with Cactus is that he continues to try to simplify the complex and can not explain the causation of his simple models.
2slugs these articles are smack in the middle of your boiler room, and since ti seems to support your politics is acceptable. analysis.
Those of us who spent a lifetime doing analytical reports can recognize the failure to sufficiently support any of the findings. Data, and statisitical analysis, are the weakest links. We just saw that in the AGW arguments.
Cantab:
What exactly did the Romers say about Martin, Burns, Miller, Volcker, and Greenspin in their discussion with Metzer?
Cantab:
I believe you are misrepresenting the study by Christina Romer.
Slugs,
The problem is that Sargent really doesn’t have much to say at all concerning today’s primary economic problem, which is weak aggregate demand. He’s just irrelevant.
You’re not correct. I already told you the’s Sargent Macroeconomic text book covered the Keynesian model.
No one is claiming that there were not policy mistakes in the 1960s & 1970s.
It goes way beyond some nebulous “mistakes were made” cliche.
Again Romer says:
Both monetary and fiscal policy actions were seriously misguided in the1960s, and led to undesirable economic outcomes.
So what we have here is a paradigm shift starting with JFK and extending through Carter.
And I’m pointing out that the numbers behind Cactus’s charts really hide and mislead us – which I accuse him of doing intentially. This is the point behind why this thread is in its third version. And I’m just warming up. I still haven’t done technical change in the 1960s with new highways, commication systems, widespread use of corporate computing, jet aircraft, and other factors not relating to current economic policy that was driving the economy in the 1960s. Finding the Romer piece was an accident — I never read it or head or it until I started fishing around. Isn’t the internet wonderful?
CoRev:
Cactus put forth his data. You, CanTab (who appears to talk a sound statistical talk), Jimi, and Sammy can use Cactus’s data to construct any statistical model you wish to do so. Plot it, give it a smoother, and see what construct you can come up with to refute the simple bar graphs Cactus offers.
The data is good from what I can see of it and are not weak links. Cactus has manipulated the data several different ways in a contiguous manner and shuffling the parameters to suit your requests. In each instance you have not accepted the results. I see nothing wrong with the statitiscal analysis that can be ascertained by the groups unsupported “opinions” as matched against Cactus’s data supported observations.
What is AGW? I must have missed something.
cheers
clinton, rubin, greenspan, others. stock market keynsianism boosted ‘thanks’ to the later 1990s asian crisis, strong dollar, et cet. read brenner’s book ‘boom and bubble’ or any of a number of papers dealing with neoliberal policies but please, please folks do not fall into the trap of accepting some notion of u.s. politics determining processes that are very definitely beyond the national.
cactus, the comps are neat but fail to account for qualitative changes such as, e.g., shifting from production driven to financially determined or national to transnational not to mention unequal exchange with row.
http://books.google.com/books?id=M0gU5PDDNOwC&pg=PA66&lpg=PA66&dq=%22third+technological+revolution%22,+mandel&source=bl&ots=4uGZADVfRp&sig=X–D-QRSvJnWOZfCS_8HnB-xEfY&hl=en&ei=0J8yS9DOKI2IswPtgKXLBA&sa=X&oi=book_result&ct=result&resnum=1&ved=0CAgQ6AEwAA#v=onepage&q=&f=false
CoRev,
Slugs does not understand the idea or statistical regularity. We are going between different policy regimes and situations in the economy with FDR and the war years; Truman and Eisenhower where economic policy sought to balance the budget and keep inflation in check; the 70s and 60s where they abandoned the policy objectives of both balanced budgets and keeping inflation down; and then the 80s on with an emphasis if keeping inflation in check but not balancing the budget. This is no stable economic system generating the data so models that assume there is can’t work since they assume there is a stable system.
Eisenhower sat through a recession to beat inflation. So if you wanted to credit this to the Kennedy/Johnson period you would have to extend the this period backward so they would get both the cost and the benefit. And the end of the Johnson administration they passed on rising inflation (in the face of falling energy costs) and a tax bill to causing Nixon to start with a recession, so you would have to now extend the Johnson period forward to cover the period of impact from the policy. And with Carter he ran up inflation so with this lead lag mentality you would have credit Carter for the recession of the early 1980s. They you could argue that Bush 41 really was not responsible for getting rid of regulation Q and the small town S&L bank managers going to vegas to try to save their dequed destined to fail institutions. Clinton inherited a recovered economy and left on set to go into recession so you might take some from him and pass it around. Bush inherited an economy going into recession and then got a double whammy of the stock market going down because the economy went into recession. Obama’s been trying to catch falling knives since his first day in office and true impact of his stupid policies have yet to what the economy.
Slugs is just faking it when he starts talking about leads and lags and information criteria. At the end of the day they are just throwing a model at economic data even though the model had no hope of capturing what was actually happening at the time.
Run,
believe you are misrepresenting the study by Christina Romer.
Make a list why and we’ll have something to work with.
Run,
One thing that Romer said about Burns is that he forced or at least cajoled Nixon into trying to push wage and price controls. I take this as Burns like a Keynesian deer caught in the headlights not knowing what to do when confronted with both rising unemployment and inflation at the same time so he just made something up. Her account of Volker with Reagan’s support is positive with respect to getting inflation under control.
Between Romer and Clinton I think I can find statements saying that Reagan layed down the economic environment with industrial restructuring and beating down inflation that plowed the way for future growth. This is my argument.
CoRev,
What Buff, and the several others still arguing with Cactus is that he continues to try to simplify the complex and can not explain the causation of his simple models.
For the umpteenth time, Cactus is not trying to explain causation. Cactus’ point is that contrary to what Republicans like to believe about themselves and Republican Presidents, there is no evidence that they actually perform any better than Democrats if you define performance as growth in real per capita GDP. That’s the inconvenient fact that you guys keep trying to dance around. So instead we hear theories about lags. Then when the lag theories fall apart we hear how you really can’t look at lags because things are just so complicated. No kidding…except you guys are the ones who first complained that Cactus wasn’t accounting for lags. You complained, Cactus accommodated and you’re still not happy with the results. Then you say Cactus’ results can’t be right because he didn’t offer any causal relationship. Ummm…..no, that’s not how it works. Cactus has shown a result. There may be simple reasons are complex reasons for those results, but the bottom line is that GOP Presidents tend to underperform. Maybe it’s just bad luck. Maybe the econ gods just don’t like Republicans. Or maybe it’s Republican policies that don’t make sense. But the key point is that Cactus does not have offer a theory as to why the results are what they are; all he has done is show that despite Republican fantasies, Republican Presidents are crappy managers of the economy.
Cantab,
We are going between different policy regimes and situations in the economy with FDR and the war years;
And yet despite all of these policy regime changes, Republicans always offer the same prescription for every economic ill. Good times or bad, recession or recovery, inflation or deflation, the prescription is always the same: cutting taxes will fix the problem. You don’t seem to get it. The reason Republican Presidents perform so poorly is that they don’t recognize why you need different policy prescriptions at different points in time.
Slugs is just faking it when he starts talking about leads and lags and information criteria.
Hey, you were the one who first complained that Cactus wasn’t taking account of lags. That’s why he redid the analysis after showing just about every lag imaginable. My only point about using loglikelihood information criteria tests was to offer up a fairly standard econometric approach for determining the appropriate number of lags.
2slugbaits
Slugbaits,
And yet despite all of these policy regime changes, Republicans always offer the same prescription for every economic ill. Good times or bad, recession or recovery, inflation or deflation, the prescription is always the same: cutting taxes will fix the problem.
This is not correct. Neither Ike, Nixon, Ford, of Bush 41 were tax cutters. And why should Republicans not want to cut taxes. Reagan turned the economy around and set the stage for our post Keynesian prosperity. Bush 41 raised then and put the economy into recession, and Bush 43 lowered them and steered the economy out of recession.
So since its not broke don’t fix it (actually I say this about my chicken salad on top of a greek salad with a bag of ruffles and a diet coke that I have for lunch most days).
The problem with Obama is he thinks there’s a new way. A fantasy land where they take the incentives out of work and business and people work harder and harder to be good citizens so they can afford their taxes.
You left out cutting regulatio
You don’t seem to get it. The reason Republican Presidents perform so poorly is that they don’t recognize why you need different policy prescriptions at different points in time.
Slugs is just faking it when he starts talking about leads and lags and information criteria.
Hey, you were the one who first complained that Cactus wasn’t taking account of lags. That’s why he redid the analysis after showing just about every lag imaginable. My only point about using loglikelihood information criteria tests was to offer up a fairly standard econometric approach for determining the appropriate number of lags.
Cantab
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2slugbaits
Slugbaits,
And yet despite all of these policy regime changes, Republicans always offer the same prescription for every economic ill. Good times or bad, recession or recovery, inflation or deflation, the prescription is always the same: cutting taxes will fix the problem.
This is not correct. Neither Ike, Nixon, Ford, of Bush 41 were tax cutters. And why should Republicans not want to cut taxes. Reagan turned the economy around and set the stage for our post Keynesian prosperity. Bush 41 raised then and put the economy into recession, and Bush 43 lowered them and steered the economy out of recession.
So since its not broke don’t fix it (actually I say this about my chicken salad on top of a greek salad with a bag of ruffles and a diet coke that I have for lunch most days).
The problem with Obama is he thinks there’s a new way. A fantasy land where they take the incentives out of work and business and people work harder and harder to be good citizens so they can afford their taxes.
Hey, you were the one who first complained that Cactus wasn’t taking account of lags.
I never talked about it in the sense of some simple minded time series rule. Different presidents followed different economic programs. Reagan was the first of the supply siders and as we all know he had to start his presidency by throwing the economy into recession to beat inflation. After you do that its hard to have better numbers than a president who never was tested with an economic downturn.
Slugbaits,
And yet despite all of these policy regime changes, Republicans always offer the same prescription for every economic ill. Good times or bad, recession or recovery, inflation or deflation, the prescription is always the same: cutting taxes will fix the problem.
This is not correct. Neither Ike, Nixon, Ford, of Bush 41 were tax cutters. And why should Republicans not want to cut taxes. Reagan turned the economy around and set the stage for our post Keynesian prosperity. Bush 41 raised then and put the economy into recession, and Bush 43 lowered them and steered the economy out of recession.
So since its not broke don’t fix it (actually I say this about my chicken salad on top of a greek salad with a bag of ruffles and a diet coke that I have for lunch most days).
The problem with Obama is he thinks there’s a new way. A fantasy land where they take the incentives out of work and business and people work harder and harder to be good citizens so they can afford their taxes.
Hey, you were the one who first complained that Cactus wasn’t taking account of lags.
I never talked about it in the sense of some simple minded time series rule. Different presidents followed different economic programs. Reagan was the first of the supply siders and as we all know he had to start his presidency by throwing the economy into recession to beat inflation. After you do that its hard to have better numbers than a president who never was tested with an economic downturn.
Cantab,
Sheesh, with you we have to repeat, repeat, repeat, repeat, and repeat some more. I had posts for the past few weeks showing that whatever you say about marginal rates, every Republican admin since the BEA started collecting data reduced the share of personal income collected by the Federal gov’t, and every single Dem administration except Truman increased it.
You know, Reagan once noted that the Soviet Constitution bore a strong resemblance to the American Constitution, but that there was a big difference in how the Soviets and Americans interpreted theirs. The same is true of taxes here in the US. Maybe you can learn what Reagan figured out some day.
Cactus,
You’re losing the debate. The Romer work shows JFK/LBJ set the economy in the wrong direction. This kills your implied story that your data mining is trying to sell. The Romer work shows the worst economic policy happened under Kennedy/Johnson/Carter.
FDR had 15 percent undemployment going into the run up to WWII; and Truman is hard to judge because he inherited an economy winding down from war. Moreoover,you’re throwing Obama under the bus because given the economy he inherited he’s unlikely to have strong number. Therefore, you are left with Slugs sitting in the bleachers with those big number 1 finger gloves for Clinton. I can live with that, he’s the guy said big government was over (and sex in the dish room had just begun).
You’re losing the debate. The Romer work shows JFK/LBJ set the economy in the wrong direction. This kills your implied story that your data mining is trying to sell. The Romer work shows the worst economic policy happened under Kennedy/Johnson/Carter.
FDR had 15 percent undemployment going into the run up to WWII; and Truman is hard to judge because he inherited an economy winding down from war. Moreoover,you’re throwing Obama under the bus because given the economy he inherited he’s unlikely to have strong number. Therefore, you are left with Slugs sitting in the bleachers with those big number 1 finger gloves for Clinton. I can live with that, he’s the guy said big government was over (and sex in the dish room had just begun).
Who is the loyal opposition? I consider myself part to the majority in waiting.
verry interesting! We here all bout US consumer’s LOW SAVINGS. But, the government (STARTING WITH REAGAN) had a hand in all that. Savings went down cause everyhting we buy came from overseas because REAGAN was responsible for massive FDI into ASEAN and China from the US. Reagan was champ of DEFICIT SPENDING.