The Economy Does Much Better Under Democrats. Why?

[G_j]

https://nyti.ms/36xgxoa

G.D.P., jobs and other indicators have all risen more slowly under Republicans for nearly the past century.

By David LeonhardtGraphics by Yaryna Serkez
Mr. Leonhardt is a senior writer at The Times. Ms. Serkez is a writer and graphics editor for Opinion.

Feb. 2, 2021, 5:00 a.m

A president has only limited control over the economy. And yet there has been a stark pattern in the United States for nearly a century. The economy has grown significantly faster under Democratic presidents than Republican ones.

It’s true about almost any major indicator: gross domestic product, employment, incomes, productivity, even stock prices. It’s true if you examine only the precise period when a president is in office, or instead assume that a president’s policies affect the economy only after a lag and don’t start his economic clock until months after he takes office. The gap “holds almost regardless of how you define success,” two economics professors at Princeton, Alan Blinder and Mark Watson, write. They describe it as “startlingly large.”

Since 1933, the economy has grown at an annual average rate of 4.6 percent under Democratic presidents and 2.4 percent under Republicans, according to a Times analysis. In more concrete terms: The average income of Americans would be more than double its current level if the economy had somehow grown at the Democratic rate for all of the past nine decades. If anything, that period (which is based on data availability) is too kind to Republicans, because it excludes the portion of the Great Depression that happened on Herbert Hoover’s watch.

The six presidents who have presided over the fastest job growth have all been Democrats, as you can see above. The four presidents who have presided over the slowest growth have all been Republicans.

The big question, of course, is why. And there are not easy answers.

..more..

[no_hypocrisy]

1. Part of the reason is no Trickle-Down Economics.

If there is wealth redistribution during democratic administrations and legislatures, it's getting money to the masses, to spend. This economy is mostly driven by consumer spending. It's easy to understand: Give money to more people to spend in the economy. This leads to more orders in factories to replenish inventory and to do research & development.

By contrast, the republican governments take money from the masses and give them to the elite 1% who don't spend the extra cash; they hoard it and hide it outside the territories of the United States. That makes the businesses, the governments (local, county, state, federal) anemic for cash, which doesn't exist. In the meantime, consumers can't purchase even necessities, pay their rent or home mortgages, etc. Not to mention, the lack of money leads to instability in families as money woes are the leading cause of divorce, not sex. But the republicans who are the proxies and surrogates for the Rich don't see it and don't care. (Also there is a subsection of the masses that believe if they wait their turn in line, the Republicans will reward them for their faith and give them some of that money.)

[Buckeye_Democrat]

3. This, for the explanation. nt

[Buckeyeblue]

5. Yes. Just this morning my daughter was complaining about her Trumpy economy teacher

She's a senior in HS. I told her to tell him that the only thing the trickle down theory explains is how old, white men pee.

[Tommymac]

7. This

[Buckeye_Democrat]

2. Yes, and the GOP has been LYING about better economies...

... under their administrations for as long as I recall too.

As a teenager in the 80's, their constant lying fooled me too. Then I read a similar article with the same kind of historical data from a US News & World Report magazine while sitting in the waiting room at a dentist's office.

The economic numbers were better under Carter than Reagan too. Yet nearly everyone squawked otherwise back in those days.

[stevesinpa]

13. what too many people miss..

is the fact that "reaganomics" "voodoo economics" "trickle down" whatever republicans want to call it, it works exactly how it is planned to work. we must get more people to understand, dont listen to what politicians say, pay attention to what they do. republicans talk about money trickling down, but their actions push money up to those that already have it.
unfortunately, there are millions of Americans that are too ignorant to even look into it.
just look at how many Americans still believe reagan cut taxes for everyone? he only cut them for the ultra wealthy, he raised taxes on working people at least 13 times

[Harker]

4. "Better" means different things to people...

Regardless of the metrics, the republican't policy intent is to further enrich the rich, while Democrats strive to improve circumstances for everyone.

That's one easy answer, I think, as part of the issue.

[tclambert]

15. But are Republican policies actually better for the rich? Relative to working class people, maybe,

Last edited Tue Feb 2, 2021, 10:04 PM - Edit history (1)

in that the rich get a bigger piece of the overall pie. But Democratic results make the economic pie bigger. So a smaller piece of a bigger pie may be larger in absolute terms than a bigger piece of a smaller pie.

Was that confusing? In college, we called this pizza math. Back then a large pizza cost about as much as two small pizzas. With the small pizzas, you could eat more pieces, but each piece was a lot smaller than a single slice from a large pie. When you include the crust factor, the large was more economical. Eventually, after much calculation and price comparison between pizzerias, we decided the mathematically correct answer was pan pizza, because the toppings go all the way to the edge, and some of us tended to throw unadorned crust in the trash.

(Edited to add: During this period, Republicans held the White House for 40 years. So the 2.2% differential, compounded over 40 years gives a GDP 2.2 times larger. (Man, we would have gotten a whole free pizza out of that!) The rich would definitely be richer if the economy grew at the Democratic rate rather than the Republican rate.)

[Harker]

20. I appreciate your pizza math...

It seems that the conclusions were thoughtfully drawn by a group of considerate, cooperative pals.

Surely, a gluttonous bully at the table, punching everyone reaching for a second slice, would've necessitated further strategic planning.

[Wawannabe]

6. We don't do trickle down!

That’s easy!

[WarGamer]

8. the NYT, as usual... relies on the work of others.

To be the smartest person in the room the next time this subject is broached, read this:

Blinder and Watson at Princeton published a paper in 2015 documenting the very real phenomenon.

https://www.aeaweb.org/articles?id=10.1257/aer.20140913

I recommend dl the .pdf, it's the final authority on the topic.

Abstract

The US economy has performed better when the president of the United States is a Democrat rather than a Republican, almost regardless of how one measures performance. For many measures, including real GDP growth (our focus), the performance gap is large and significant. This paper asks why. The answer is not found in technical time series matters nor in systematically more expansionary monetary or fiscal policy under Democrats. Rather, it appears that the Democratic edge stems mainly from more benign oil shocks, superior total factor productivity (TFP) performance, a more favorable international environment, and perhaps more optimistic consumer expectations about the near-term future. (JEL D72, E23, E32, E65, N12, N42)

[Hortensis]

9. I'll give one: Overall, liberals BELIEVE in government of, by and for the people

and enter politics to use it. Ideology. They come to office with all kinds of flaws, but also with ideas of good things they want to accomplish, and in general this keeps Democrats far more honest and committed than their anti-government colleagues in what's become an extremely corrupt and economically extremist GOP.

The biggest corrupting factor among liberals, and it is big, is the need to get reelected. And we now have the power to help them with that and reform bills already written and ready for the next steps to passage.

Another he probably won't hit is smarts. I'm convinced Democrats are typically a lot more intelligent and informed than what Republicans are electing. Experts in environmental iand dozens of other important issues entering government to make things happen run as Democrats. Those who see time serving in government as a stepping stone to a lucrative position in business run as Republicans because that's where it's done.

[DFW]

10. There's an old saying that every Republican knows, but never says out loud

If you want to live like a Republican, vote for a Democrat.

[Mike 03]

11. We also invest in potential--the potential for something creative and small to grow

into something big and profitable, whereas it seems the Republican way is to reward cruder manifestations of success, like net worth (through tax cuts and loopholes), allocating more money to corporations and individuals already at the top of the list hoping they will expand and employ, when they move towards automation and financial strategies that don't result in expansion.

I think it's Thomas Piketty in his book "On Capital" argues that the wealthiest among us don't actually spend much money. That capital often sits and accumulates more capital. Or worse, incestuous schemes like share buybacks...

[malthaussen]

12. "Over the last four decades... Republicans have run up larger deficits than Democrats"

It seems to me one might consider looking right there for answers.

-- Mal

[LiberalLovinLug]

14. This has been true for such a long time....WHY CAN'T DEMOCRATS PUBLICIZE THIS BETTER?

Is it all the fault of TV news networks? Even though this article speaks the truth, still the fake myth keeps getting projected by the MSM that Democrats are "tax and spend" terrible fiscal managers, while Republicans know all about being successful business people, and know the importance of not spending more you bring in etc...

How can this still be an accepted thing?

[Bernardo de La Paz]

18. +1. . . . nt

[uponit7771]

21. No, its not the news networks fault. We need to have a discussion on progressive messaging ...

... with facts and proven go forward solutions that have worked to getting a message across.

The republican party fought against giving money direct to citizens during a pandemic where their party leader, Trump's, inaction caused economic collapse they shouldn't be in ... ANY ... parliament system but they are.

That's either gop smacking horrid campaigning or a fragmented message.

We've got to get to the bottom of this as a political party

[Dawson Leery]

16. The GOP has been the one bit whore of big business since 1870.

Nothing has changed.

[Celerity]

19. TBF, you just left out the whole Progressive Teddy Roosevelt Era. Deffo NOT a big business

whore time, it was the rise of the trust busters .

After that, yes, for sure, starting with Taft, Harding, Coolidge and Hoover.

The only 3 truly decent (2 being great) Repub POTUS's in history were Lincoln, Teddy Roosevelt, and Eisenhower, IMHO.

Around 20 years out of the last 160. Not a good record.

[Bernardo de La Paz]

17. Not difficult: Ds invest in people. Rs invest in trickle down. People work, trickles don't

The RepubliCONs always say you should run a government like a business or a household from the kitchen table.

Thing is, business that are strong for the long run invest in their people. They train them, they mentor them, they give them health care, they make it easier for them to succeed and therefore for the company to succeed.

Democrats do the same thing with their policies for the country. It works.

RepubliCons pass tax cuts for the rich. It doesn't work.


The economy is powered from the bottom up. Cash spent to help poor and disadvantaged people rise is cash that gets spent into the economy almost immediately as it is helping them rise.

[Vinca]

22. Democrats consult bona fide experts about the economy and what should be done to improve it.

Republicans consult their big donors and the only thing up for debate is how big the tax break should be. In addition, "small government" Republicans have a tendency to spend half the treasury anytime one of them has a crack at it. Think Iraq war. They also love making their donors open their pockets by eliminating regulations. Think 2008. And, of course, they love self-dealing. Think Trump.