Suppostion? Economic performance is stronger when Democrats hold the White House
It appears people will argue the economic and social positives of the different political parties over periods of time. They probably are different. So, EPI has managed to chart the differences. What the first four charts do is detail the differences between the two parties over two different time periods. One time period staring in 1949 and the next time period in 1981. A contrast in beliefs? Maybe . . .
The last two Appendix Charts compare presidencies and their differences in Growth and Distribution (based on income) results. I am sure many of you will flock to those comparisons.
I thought they were interesting. Maybe you will also.
Economic performance is stronger when Democrats hold the White House”
by Josh Bivens
Economic Policy Institute
Since 1949, there has been a Democratic advantage in the average performance of key macroeconomic indicators measuring economic health.
Summary: The economy performs much better during Democratic presidential administrations than during Republican ones.
- This Democratic advantage is across the board in all variables we measure but strongest in private-sector outcomes—notably, business investment, job growth, and the growth of market-based incomes.
- Household income growth (adjusted for inflation) was faster on average and far more equal during Democratic administrations, and the Democratic advantage shows up for every group.
Table 1
Table 1 shows the average performance of a range of key macroeconomic variables under Democratic and Republican administrations since 1949, the beginning of Harry Truman’s first elected term.3 There is a Democratic advantage in every measure.
The next Table or Table Two below shows similar results over a shorter time span. The number should not be taken as the best result that could have been achieved. For example, is “Real Wage Growth” of .64% the best achievement to be had?
Table 2
Table 2 shows an almost identical set of indicators as Table 1 but measured only since 1981, the first term of the Reagan administration. There are two reasons to look at this set of more recent administrations. First, if the Democratic advantage mostly stems from the performance of very long-past administrations (say that the Kennedy/Johnson administration had superior performance relative to the Eisenhower administration), perhaps many will simply find these comparisons irrelevant.
Table 3
In Table 3 is showing income growth over the full post–1948 period. The Census Bureau data shows Democratic advantage in income growth for every percentile measured. The advantage uniformly becomes larger the lower one goes down the income distribution.
For example, income growth for families at the 95th percentile of the income distribution (those making more income than 95% of other families) is about 10% faster during Democratic administrations (1.95% average annual growth compared with 1.74% growth in Republican administrations). But families in the middle fifth of the income distribution see growth that is 48% faster during Democratic administrations (1.9% average annual growth compared with 1.3% growth during Republican administrations). And for families in the bottom fifth of the income distribution, income growth is 188% faster during Democratic administrations (2.1% average annual growth compared with 0.7% growth during Republican administrations).
Table 4
Table 4, shows income growth since 1980. Again there is a “Democratic” advantage in pre-tax money income in every income group, By far it is the largest for the lowest income fifth. In the WID data, there is a Democratic advantage in every income group. By far the smallest for the top 1%.
In short, the clear sweep of income trends is that during Democratic control of the White House, overall income rises faster, income for every measured income class rises faster, and income growth is far more equalizing.
Appendix Tables 1 & 2 (below) are measures of aggregate economic performance. All data is collected at a quarterly frequency. We date the start of a presidential administration as the third quarter of the year following their election.
For growth measures in Appendix Table 1 (including inflation), we average the growth rates measured each quarter relative to the same quarter a year ago. And for Level variables (like the unemployment and federal funds rate), we use quarterly averages of the unemployment rate.
And for our comparisons by partisan control of the White House, we simply collapse the averages of all our variables by either Democratic or Republican control of the White House.
For the distributional variables in Appendix Table 2, we measure the start of a presidential administration as the year that they are inaugurated. For example, the Biden administration starts in 2021. So, the first growth rate measured under the Biden administration is average income in 2021 relative to average income in 2020. For making partisan comparisons, we again simply collapse the average growth rate of all variables by either Democratic or Republican control of the White House.
If you wish more detail on each graph, you can find a complete report here: “Economic performance is stronger when Democrats hold the White House.” Economic Policy Institute.
Wait. So tax cuts targeted at the top 10% don’t actually pay for themselves? Art Laffer was . . . wrong?
One might almost think that “a rising tide lifts all boats” is true — in contrast to “siphoning money from the economy to put into rich people’s stock portfolios” being the key to economic growth.
@Ithaqua,
Don’t tell the folks in Peoria that the top 10% *aren’t* the job creators. It won’t play well there, and that’s the only reality that matters, so I’m told.
Joel
give it up. all you are doing is telling people i hurt your fee fees. i explaind what i meant…something like forced equal opportuity creates the backlash we are living through. apparently you did not understand that.
i made no reference to the t0p 10% or the job creators, or that the “only reality that matters.” I would say you are lying about me. but you are only lying to yourself.
anyone else reading this before joel deletes it “fee fees” was the way joel expressed his contempt of people who disagree with him about something they feel is important when i tried to point out to him that believing people “deserve contempt” is not good politics, nor is it good for the person who enjoys feeling contempt for others.
i have been trying to quit AB because of the censorship, but having been writing important stuff here about Social Security for fifteen years without this nonsense it turns out to be a hard habit to break.
I read Braudel’s Civilization and Capitalism, 15th—18th Century, three-volume set many years ago (and his two-volume set The Mediterranean). Yeah, the middle class is where it’s at, and has been for a long time.
@Ithaqua,
Someone needs to tell the GOP. They think it’s the 1%.
All we have is about 40 years of data and statistics. That is not enough to persuade someone who wants to believe that no taxes generates infinite revenue. As it must if cutting taxes always increases revenue and more than pays for itself. It only is absurd if you care about reality. Obviously quite a few Americans don’t.
it’s not that they don’t care, they just have no idea what it is.
deficit spending, however, has been shown to work, within limits.
Back in 2010, Dan Crawford posted that a new book was coming out about this. I believe the title was going to be Presidential Economics. I can’t find hide nor hair of it. The book was written by cactus who also posted on this blog. As now, Democrats did much better than Republicans.
This effect also shows up in the red-state/blue-state paradox in which anti-business blue states provide a better economic environment for businesses than pro-business red states. My thinking is that Democrats understand that the way to get rich is to provide something that just about everyone wants to buy and that requires that just about everyone have some money to spend. Republicans don’t understand business. They think water comes from a tap in the wall. They don’t like the idea that if one is going to make money, other people have to have money. Republicans hate it when other people have money.
Here’s a link to another relevant post:
Kaleberg:
Maybe this ?
Presimetrics: What the Facts Tell Us About How the Presidents Measure Up on the Issues We Care About
Kaleberg
“Republicans hate it when other people have money.”
it certainly seems that way. there are people who hate it when other people are happy. i don’t think this is exactly the problem with R’s. but lying about taxes and debt wins them elections and helps the people who pay for their campaigns feel better about themselves.
someone i knew said “he who dies with the most expensive toys, wins..”
sadly, even the Left believes this. they just want the rich to buy them more toys.
I’ve seen this argument many times and it’s a futile one. There are so many factors and moving parts when in reality it’s almost impossible to gauge under which party an economy is better. Whether or not an economy is better or worse is a subjective question. There’s one simple way to settle this debate. Bottom line if it were true that the economy performs better under Democrats, every single election cycle would go to the Democrats. As my favorite Democrat once said: “It’s the economy stupid” and going by that if the economy was better under Democrats, Democrats would win every election cycle.
@matt,
“As my favorite Democrat once said: “It’s the economy stupid” and going by that if the economy was better under Democrats, Democrats would win every election cycle.”
The phrase “going by that” is doing all the work in that sentence. While it’s true that the economy matters a lot, other things matter, too. GW Bush got a big boost from 9/11, for example. Candidates matter, too: McCain was a weak candidate, and Palin weakened him further. The notion that the economy is the only thing that matters in all elections is simplistic and flies in the face of historical evidence.
Joel
I agree with you about this.
I would add, though, not especially contra you, but to the general idea here that the workers create wealth, of course they do, but it is not clear that they would create as much wealth without the entrepenurial and management contributions of the rich.
I am happier with the idea that ‘WE” create wealth, and we do need to manage the distribution of that wealth so “the poor” are not starving for all the things that make life worth living, and the rich are not so rich they can buy the government.
I think most “rich” people can be made to understand this well enough to find ways to control the predatory rich. but we might have to find ways to stop scaring the near-rich if we are going to get them to cooperate with us in achieving a truly fair distribution.
mindless greed from the Left is no better than mindless greed from the Right.
“…without the entrepreneurial and management contributions of the rich.” You mean like Paris Hilton? Taylor Swift? The grandchildren of Sam Walton? Sam Bankman-Fried? Donald Trump?
You seem to have made a very classist assumption that the rich are the ones who make entrepreneurial and management contributions, and the remaining 99% are, by inference, pretty much mindless proles who would wander aimlessly about without them.
I can assure you that if everyone worth > $1 billion disappeared from the face of the earth tomorrow (except Taylor Swift, and Paul McCartney if he’s in that group,) after the tabloids had had their day, things would carry on pretty much unchanged, except at X and Tesla where they would get better.
Ithaqua
perhaps. but at least I can read, and not jump to ridiculous conclusions.
I made no assumptions whatsoever and certainly not classist ones.
Try to find someone to help you read what I actually said.
But just to give you some moral satisfaction: here is me jumping to a conclusion: I conclude that you represent what is wrong with “the Left.” completely unable to manage anything more complex than a football cheer.:
Republican’s have learned that lesson, but they also know that if you can control perception, reality does not matter.
Reagan gets far more credit than he deserves because Republicans have worked very hard to get their people to believe. Examples abound.
Arne
yes.
matt
your “simple way to settle this debate” has been adequately answered here by others.
but as to the “many factors and moving parts” the data are strong and consistent enough to suggest at least that the R claims to be the Party that creates good economic times is noise and nonsense.