The Economy Grows Faster Under Democratic Presidents

Jared Bernstein comments on a “provocative new paper by the economists Alan Blinder and Mark Watson that rigorously examines how the economy has performed under presidents since the 1940s. Their main questions are: Which party’s presidents preside over better economies and why?”

“Their answer to the first question is clear: The American economy has grown faster — and scored higher on many other macroeconomic metrics — when the president of the United States is a Democrat rather than a Republican.”

“The two looked at key macroeconomic variables averaged over 64 years (16 four-year terms), from Harry Truman to Barack Obama. Mr. Blinder and Mr. Watson focus mostly on the 1.8 percent annual difference in real G.D.P. growth. That is, over the full study, real G.D.P. growth averaged 3.33 percent per year. But under Democratic presidents the economy grew 4.35 percent and under Republicans 2.54 percent.”

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Chart: CBS News

Bernstein concludes: “It is glaringly obvious that complex, advanced economies need well-functioning federal governments that can accurately diagnose and prescribe; they need governments that can absorb factual information and respond to threats and opportunities. These requirements hold regardless of the president’s party, and the fact that we do not currently have such a federal government is without doubt what’s most important and most scary.”

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