With Coke, maybe. With Democrats, definitely.
The president has limited control over the whole economy. Even less so now that it is global. But that does not stop presidents from claiming credit when things go well. And even (as with Donald Trump) when Main Street’s economy is in the toilet while Wall Street’s cruises along profitably. Nonetheless, over most of the last century the economy has been more prosperous under Democratic presidents.
David Leonhardt runs the numbers:
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.
Experts are unsure why this is. But it is more than statistical noise:
First, it’s worth rejecting a few unlikely possibilities. Congressional control is not the answer. The pattern holds regardless of which party is running Congress. Deficit spending also doesn’t explain the gap: It is not the case that Democrats juice the economy by spending money and then leave Republicans to clean up the mess. Over the last four decades, in fact, Republican presidents have run up larger deficits than Democrats.
That leaves one broad possibility with a good amount of supporting evidence: Democrats have been more willing to heed economic and historical lessons about what policies actually strengthen the economy, while Republicans have often clung to theories that they want to believe — like the supposedly magical power of tax cuts and deregulation. Democrats, in short, have been more pragmatic.
Also, water is wet.
Also also, Democrats make public investments that pay off down the road in jobs and prosperity. Investments “that the private sector does not make when left to its own devices.” Not that Republicans Eisenhower and Nixon failed to make them.
But the difference could come down to which interest groups the two parties most heed:
One possibility is that the two parties are both responding to the interest groups that support and finance them, suggested Ms. Wanamaker, who worked in the White House Council of Economic Advisers during the Trump administration. But the Democratic-leaning groups (like labor unions and civil-rights organizations) may favor policies that lift broad-based economic growth, while Republican-leaning groups (like the wealthy) favor policies that mostly shift income toward themselves.
Sen. Elizabeth Warren speaks to that regularly (this quote from 2015 or so):
“From 1935 to 1980, we’re coming out of the Great Depression. What do we do? We do two things. We put a cop on the beat on Wall Street and we started investing in our future together — in education, in infrastructure, in research. And we build America’s great middle class — the 90 percent, everybody outside the top 10 percent. The 90 percent get 70 percent of all wage growth in this country. So GDP [gross domestic product] is going up. And families across the spectrum, they’re doing better.
“Trickle-down economics hits in the 1980s and you just watch this reverse. So from 1980 to 2012, that’s the latest year for which we have data, the 90 percent, everybody outside the 10 percent, do you know how much they got? They got zero percent of income growth; 100 percent of income growth — GDP kept going up — 100 percent of income growth went to the top 10 percent in America.”
The Washington Post fact checker examined Warren’s statements. Including after-tax resources from all sources (including government payments) to measure prosperity makes the difference somewhat less stark. But that analysis uses “sizable improvement” to compare a 50 percent increase in after-tax income for the bottom one-fifth of families and a 36 percent for the middle fifth with a tripling for the 1 percent from 1970 to 2011.
Lacey Rose, a spokeswoman for Warren, responded that market income “paints a better picture of the plight of middle class families than looking at an income measure that includes transfer payments.” She noted that transfers are illiquid and not fungible –housing vouchers cannot be used to fix a car—and that refundable tax credits such as the Earned Income Tax Credit are erratically timed.
Whatever the cause of presidential-term differences, Leonhardt writes, the pattern is clear: “The American economy has performed much better under Democratic administrations than Republican ones, over both the last few decades and the last century.”
You can take that to the bank.