Quay County Sun - Serving the High Plains

By Steve Hansen
Columnist 

Presidents don't sway economy

 

July 26, 2017



The Republicans are still running against Obama, even though the GOP has dropped the ball for the second time on repealing and replacing Obamacare.

Meanwhile, the country waits with bated breath to learn what the Republicans will do, now that they have both the presidency and Congress.

Since they can’t seem to agree among themselves, they fill the vacuum by blaming Obama for problems, real or imagined, that they feel they have a mandate to fix in some way they can’t decide upon.

President Donald Trump is looking at economic stability, a stock market that has been rising without glitches for months, and near full employment. Of course, having been in office for all of seven months, he’s taking full credit.

I have long held the opinion that presidents have less to do with economic conditions on their watch than they would like to take credit or assign blame for.

It is blatantly true of Trump as he claims credit for economic improvements that have been evolving favorably since before he took office.

On the other hand, it is equally debatable whether Obama can take credit for the economic improvements, even if they did begin while he was still in office.

I think the improvements may have come along just because the economy on its own for the past couple years has finally shaken off the effects of 2008’s Great Recession.

Alan Blinder and Mark Watson, two Princeton economists, conducted a study showing that the economy seems to be better in general under Democrats, but there is no reason for I-told-you-sos.

“Democrats would no doubt like to attribute the large growth gap to macroeconomic policy choices,” the economists said, “but the data do not support such a claim.

“If anything … both fiscal and monetary policy actions seem to be a bit more stabilizing when a Republican is president,” they concluded.

The good Democrat results seem to combine good luck “with perhaps a touch of ‘good policy,”’ Blinder and Watson assert.

A study by the Brookings Institution, often labeled a liberal think tank, shows that President Bill Clinton, a Democrat, mostly got lucky with the economic growth that occurred over his two terms.

“The 1990s American boom,” Brookings said, “was led by private-sector spending and private-sector employment.”

Three factors contributed to U.S. economic growth during the Clinton years, Brookings concludes. Those were deregulation, globalization and innovation.

On the other hand, in my opinion, Reagan got lucky in the go-go 1980s. During his watch, the strangle-hold that the Organization of the Petroleum Exporting Countries (OPEC) had on oil prices succumbed to squabbling.

Production cut loose, prices went down and the entire world’s economy, especially ours, soared so high that we could play with junk bonds.

Whether Obama’s emergency measures in the wake of 2008’s Great Recession were beneficial will be debated as long as we have progressives and conservatives.

Conservatives and progressives are still debating whether President Franklin D. Roosevelt’s policies bettered or worsened the Great Depression.

The general conclusion seems to be that presidents can have some effect on the economies they allegedly oversee, but they mostly play the hand they’re dealt. Free enterprise and markets still reign.

Steve Hansen writes about our life and times from his perspective of a retired Tucumcari journalist. Contact him at: [email protected]

 
 

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