2008-07-07 Presidential economics: Do parties matter

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Since Franklin Roosevelt’s third term (1941–44), Democrats have generally presided over faster growth and stronger stock markets than Republicans; Republican administrations have been friendlier for disinflation and the bond market. Also, Republicans tend to preside over recessions early in their terms, with growth accelerating as time passes; Democrats tend to preside over earlier accelerations followed by slowdowns as the term matures.

David Brin comments on this (2008-10-12):

Notes: bear in mind that the one major democratic outlier the - 1944-48 “Roosevelt-Truman” term - had to manage the end of WWII and the biggest conversion of the economy in history, finding employment for five million soldiers re-entering the civilian economy. In fact, that term ended very well and was arguably the best-managed in all of US history. Likewise Roosevelt III - both waging WWII and yanking us out of a depression might offer an excuse for that outlier in government deficit. Otherwise, democrats (and Eisenhower) always do better at balancing budgets. Always.

Likewise, without question, stocks do better - on average - under democrats, especially if you (properly) pull Eisenhower out of the Republican column, since his version of republicanism bears no genetic relationship with today’s. Note also that Truman again took a difficult transition and turned it into a boom.

Of course, the most recent year of Bush 43 is missing from these stats, where stock losses and skyrocketing deficits would extrapolate the “red” republican blood-draining to truly vampiric levels.

There is, of course, one exception to the dems’ almost perfect record of better economic performance... the inflation figures for (especially) Jimmy Carter’s term. Though one could easily blame that on backlash effects from trying to do both guns and butter earlier, during Vietnam.

Missing from this tally – and I suspect potentially just as devastating – would be Small Business Startups. I’d also be interested in rates of GDP growth and rates of monopoly aggrandizement. These last three would put the final nails in the coffin.