Guest post: by Nathan Salminen (Politics that work)
Comparing performance between Republican and Democratic years
The performance gap we see at the state level could still theoretically be the result of factors other than policy. It could be that the red states have simply drawn the short straws and happen to have inferior access to natural resources or trade or that they simply lost out in the lottery of history. That seems unlikely because states that are very different in every other way still tend to perform similarly to states with which they share little other than policy, but it is still a possibility. So, to eliminate the possibility that the differences are the product of localized factors, next we want to see how the policies of the parties perform when we hold the locality constant and look instead at years when each party was in power.
The most fundamental measure of economic performance is the rate at which the gross domestic product (GDP) grows. At the national level, the differences between how fast our GDP has grown during years when the Democrats have controlled both the legislature and the presidency, how fast it has grown when the Republicans controlled both, and years when the parties have split control are as follows:
The parties’ records for stock market performance vary even more dramatically:
But, GDP and stock market performance are not everything. It is always possible for the size of the economy and the value of the market to grow without actually benefiting the average American much if the wealth is overly concentrated in the pockets of the very rich. The U.S. certainly does have a major problem with overconcentration of wealth. So, we should also look at some indicators that measure how typical Americans are doing.
One obvious measure is the unemployment rate:
That result certainly is dramatic. But, still, if, for example, the number of jobs fell under Republicans and grew under Democrats, but wages did the opposite, that might not be as strong of an endorsement for Democrats as it first seems. Or, if taxes shoot up so much under Democrats that it swamps the gains for most Americans, that would weaken the Democrats’ case as well. The way to see if either of those problems is occurring is to look at how much personal income Americans are getting after taxes:
You see similar results when you look at how states that have tried out both parties have performed under each. For example, Florida’s GDP has grown twice as much under Democratic governors as it has under Republican governors since 1970, despite the Republicans having had more years to accumulate growth. Minnesota’s GDP has grown two and a half times as much during the most recent 12 years under Democrats as it has under Republicans and its unemployment rate has fallen 9 percent under Democrats since 1977 and risen by 7 percent under Republican governors.
No matter how one looks at the data- by relying on the findings of economists, by looking at state level or looking a federal data, and no matter which economic measure one looks at, the answer is the same: Democratic policies are performing better. And not just a little better- drastically better.
Any of these measures standing alone could simply be a coincidence. For example, even if policy was not related to economic performance at all, we would still see results that differ as dramatically as they differ in the GDP chart above approximately 1 out of every 200 times. However, when you add up all of this data, the odds of it happening purely due to bad luck are for all practical purposes zero.