Ask Not What the President Can Do for the Economy - because he is turning America into a third-world nation.
5
It maybe true that the President has less to do with the growth in the economy than they are often given credit by their partisans. It is also true that the economic growth attributed to Ronald Reagan started when Jimmy Carter was president. More to the point the Supplysider, Arthur Laffer, enthralled Republicans have been shown to be wrong. Both Bill Clinton and Barack Obama raised taxes. The right asserted we would see economic shrinkage if not recessions. Both administrations saw economic growth that outripped their Republican predecessors.
5
There may be truth in the statement that the economy was done better under democrats. Most of the big wars have been during a time when a democrat was in the White House. Roosevelt had WW II, Truman had Korea, and Johnson had Vietnam. Obama has Afghanistan, Iraq, plus smaller conflicts in Libya. and Syria. But he has also reduced the military so that the economy hasn't been able to reap as much an advantage. This may be why the economy is seen by many as stagnant. and in danger of another recession. Who ever is in the president, it will be a difficult time for truly improving the economy in a non war environment
An interesting question that I haven't seen asked: how much are voters influenced by their own economic circumstances and how much by what they read about the economy?
1
The biggest fallacy of all current economists is comparing current situations to the past ones. The closest paradigm to our current issue is Japan, not the past. Don't dredge up the 50's and 60's, where we helped rebuild Europe (hence large demand and limited supply), and high tax rates. Nor can you state anything from the 1990's as an example, as they were primarily at fault for the large financial bubbles that we are seeing.
Presidents and Congress in tandem are responsible for the regulations and ensure transparency and effective but limited regulations on business. Government does not nor ever will create "real" economy. At best it creates a revenue neutral view (think health and education) and is a driver for allowing business to have consistent and acceptable access to the resources it needs.
ACA, Sarbanes & Oxley, Bad Tax Policy, Immigration policies, Trade-agreements without suitable protections, though noble have all been horribly implemented and never reviewed and discussed within the halls of government. Why? Because they aren't popular, and because of that ... new companies are not being made, job participation rates are falling, and tax revenues are falling. Now add taxes (ACA) and cost of living going up, yet the GA consistently warps their economic views (GDP, actual unemployment rates) to make a situation where it hides the truth.
So a revolution is required whether it is Bernie or Trump, because any other candidate will be a failure.
Presidents and Congress in tandem are responsible for the regulations and ensure transparency and effective but limited regulations on business. Government does not nor ever will create "real" economy. At best it creates a revenue neutral view (think health and education) and is a driver for allowing business to have consistent and acceptable access to the resources it needs.
ACA, Sarbanes & Oxley, Bad Tax Policy, Immigration policies, Trade-agreements without suitable protections, though noble have all been horribly implemented and never reviewed and discussed within the halls of government. Why? Because they aren't popular, and because of that ... new companies are not being made, job participation rates are falling, and tax revenues are falling. Now add taxes (ACA) and cost of living going up, yet the GA consistently warps their economic views (GDP, actual unemployment rates) to make a situation where it hides the truth.
So a revolution is required whether it is Bernie or Trump, because any other candidate will be a failure.
Mr. Covert is just flat wrong. Presidents, particularly two-term Presidents, have tremendous influence on the economy. Barack Obama, through his ongoing efforts to regulate nearly every segment of the U.S. economy, has been nothing but a millstone for the incomes of U.S. workers. Vast swaths of the system, from energy to healthcare to banking, have come under bureaucratic assault. The latest and greatest example of bungling overreach is the new phalanx of wage and hour laws propagated by the Labor Department. Scheduled to take effect December 1, these laws make the process of differentiating, scheduling and paying exempt and non-exempt employees nearly impossible to devine, given their immense complexity. Obama simply assumes that employers will comply, profit margins be damned. So much for letting a Community Organizer run the world's largest economy for 8 years. Weak growth and nearly perpetual recession in wages have been the result.
12
What I do no see in the article and comments is the impact of excessive regulation on the ability of businesses to invest and create jobs. The very low economic growth of the post recession years of the Obama administration are a testament to that. And the chronic low growth of Europe is exhibit A. Economic actors and market participants become very cautious when governments at all levels keep promising more and more rules and higher taxes.
4
Before Obama leaves office, I want to record one final regret to his administration.
As soon as it became clear to Obama, after election day, that the Congressional republicans had declared war on his election and administration intending to impede any progress Obama could make, Obama should have declared war on the Republicans.
With little to lose, a full throated battle against the obstruction of Republican members of Congress, would at the minimum led a nationwide battle to achieve progress for the country.
Obama's reticence and self control only served to encourage the Republican cowards in their selfish endeavor. They could see he wasn't going to put up much of a fight.
If I were Trump's campaign manager, I would emphasize Obama's weakness in the face of obstruction and encourage him to emphasize his natural ability to stand up to sabotage with a counter attack.
Obama could have accomplished so much more if he had joined into the battle!
As soon as it became clear to Obama, after election day, that the Congressional republicans had declared war on his election and administration intending to impede any progress Obama could make, Obama should have declared war on the Republicans.
With little to lose, a full throated battle against the obstruction of Republican members of Congress, would at the minimum led a nationwide battle to achieve progress for the country.
Obama's reticence and self control only served to encourage the Republican cowards in their selfish endeavor. They could see he wasn't going to put up much of a fight.
If I were Trump's campaign manager, I would emphasize Obama's weakness in the face of obstruction and encourage him to emphasize his natural ability to stand up to sabotage with a counter attack.
Obama could have accomplished so much more if he had joined into the battle!
6
Every president makes many decisions and appoints innumerable people. He promotes laws and effects an enormous amount of change using regulatory power and appointments. He sets policy and the tone. He uses his office for influence. Moreover, he can stop Congress from making bad choices with his veto power.
As one commentator points out, under Democratic Presidents since 1948, they lead in 5 key areas 1. GDP growth 2. recessions 3. unemployment 4. stock market returns and 5. increasing wages.
It wasn't luck that Obama’s economy did much better than Bush’s and Clinton's did better than Reagan.
Economists are clear that economies do better under a fair regulatory climate with a rising middle class. They do best on moderate, fair policies designed to help all.
While taxes can matter, the fact is they really don’t if they are in the reasonable range. Moreover, regulation has a favorable effect on the economy (think regulation of the financial markets to make them fair, requirements to publish accurate financials, requirements to fund pension plans, environmental regulation to improve health), and clearly on the well-being and health of the population.
You can’t tell me that if the President managed to borrow a trillion dollars and start a huge infrastructure program, enacted TPP, started a trade war, passed a minimum wage of $15, or removed restrictions on the banks so they vastly increased risk, it wouldn’t have a huge effect on the economy.
As one commentator points out, under Democratic Presidents since 1948, they lead in 5 key areas 1. GDP growth 2. recessions 3. unemployment 4. stock market returns and 5. increasing wages.
It wasn't luck that Obama’s economy did much better than Bush’s and Clinton's did better than Reagan.
Economists are clear that economies do better under a fair regulatory climate with a rising middle class. They do best on moderate, fair policies designed to help all.
While taxes can matter, the fact is they really don’t if they are in the reasonable range. Moreover, regulation has a favorable effect on the economy (think regulation of the financial markets to make them fair, requirements to publish accurate financials, requirements to fund pension plans, environmental regulation to improve health), and clearly on the well-being and health of the population.
You can’t tell me that if the President managed to borrow a trillion dollars and start a huge infrastructure program, enacted TPP, started a trade war, passed a minimum wage of $15, or removed restrictions on the banks so they vastly increased risk, it wouldn’t have a huge effect on the economy.
6
What's to say that it's not something that's not considered that is the reason the economy does so much better under Democrats? Even so, why not go with a winner over a perpetual loser?
7
Now I understand. It wasn't Franklin Roosevelt's courage, leadership and the ability to raise hope in a demoralized public. No, I understand, Just luck. No need to vote?
2
I don't think the president can have much impact but congress and the president certainly can. They constantly think of new ways to "goose" the economy. For example, going from non deductible home interest to deductible home interest gooses the savings accounts of homeowners and worsens the finances of potential buyers. Any step change like that should be phased in over decades (and it should be phased out over decades starting now, NAHB and NAR protests be damned). Step changes in capital gains taxes, etc. Same goosing effect. The government should not be in the game of goosing the economy to the benefit of a few.
Look at the jacket in that picture. Says it all about DT supporters. Disgusting.
But it is profoundly stupid to vote for Romney and Ryan style plans and destroy social security and protections for the public while doing no more for economic growth and jobs than supernatural methods do for curing a disease. A national policy that elevates speculative economic activity to a place of reverence is suicidal.
4
Please. Social security is a bankrupt system raided by politicians. So you think a retirement system funded by ious is responsible ?
2
If the stimulus was one of the great accomplishments of the Obama administration then that administration is an unmitigated disaster as was adding a trillion dollars to our national debt with no discernible results. And no tarp and talf loans loans to the financial markets re not what Im speaking of here.
3
"adding a trillion dollars to our national debt with no discernible results.".....Since the recession the economy has set a record for the number of consecutive months of job growth. Further, the U.S. economy has been significantly stronger in recovery than most of the rest of the developed world. Those are facts; so to claim there have been no discernible results without providing a shred of evidence is a little suspect. Further, as to national debt, the Obama administration inherited a budget deficit of 1350 billion which has been reduced to around 500 billion.
16
Hurray for actual facts!
3
Facts are great - when they are actual facts. Truth us that the economy has been in the worst recovery malaise in history. Unemployment stats have been skewed largely by omitting those no linger in the wirk force. If the queation were posed would you add a trillion to the defecit in return for less than two percent growth and most of the money flowing directly to those at the top, only a complete fool would say yes. And you are dead wrong about the defecit which has doubled under obama. Stat you cite is pure spin - benchmarking annual spending with stimulus versus subsequent years. Look at any credible picture of the total defecit and that is abundently clear.
All this is certainly true, even though most American voters credit/blame the president for whatever happens in the economy. Most intelligent school kids get beyond the "president is boss of the country" theory by the 5th grade, but many voter apparently never do. What is critical in our present situation, however, is that Republicans in congress have been working to tank the economy since 2010. Their expressed concern with the national debt is obviously phony since they generated virtually the whole thing, not with spending, but with tax cuts for the wealthy (which, of course, have had almost no effect on the economy). Government spending has been cut, and the federal response to the recession since 2010 has actually been negative, the only instance of that since we have been keeping stats. If their efforts succeed by November, perhaps they can elect Donald Trump.
3
Here's an argument that government policy does affect the economy and people's lives. There are public schools. There are minimum wage, overtime and unemployment laws; there is Social Security and Medicare and Obamacare, there was/is the GI Bill and there were GI Mortgages. There were huge public building programs: highways, bridges, etc. that created the building boom of the suburbs and all those jobs. There are many middle class/upper class tax breaks: tax free health and retirement contributions at work; there's the mortgage interest tax deduction and the low tax rate for capital gains. It's obviously not true that Presidents can't/don't affect the economy.
5
The President has the nuclear button and that can destroy all of us. Do you want that in Trump's hands?
4
So I suppose you are going to try to say that FDR's new deal, which created a social safety net for average Americans and taxed the grotesque wealth of the top financial elite, did nothing for America, Mr. Covert? You are wrong. The President WE elect can speak out loudly and forcefully for social and economic equity for average people and can lead the charge to make it happen. However, you are right about one thing. It will be much easier when WE also elect a socially conscious democrat/independent Senate and U.S. House of Representatives as well as state, county, city, judge and school board candidates. Then WE must remain vigilant and DEMAND that President Clinton and other officials WE elect restore the kind of America the vast majority of us want to inhabit.
4
As others here have suggested, government affects the economy the most when the president and the congress work together.That said, it is remarkable that neither Ms. Covert nor any of the commenters so far address the economic implications of addressing - or failing to address - climate change. Failure to address climate change will, even if not necessarily during any particular presidential tenure, be economically devastating, as it will in every other respect. Addressing climate change, particularly through a refundable carbon tax, would result in spending by businesses and individuals that they would otherwise be disinclined to make, causing new circulation of money through our otherwise sclerotic economy. A collateral benefit would be some degree of redress for our country's widening income inequality.
Those who are already whining about the burdens of regulation fail to recognize that regulation internalizes otherwise external costs. Regulation does not create costs out of thin air; nor does the lifting of regulation cause those costs to vanish back into thin air again. Internalizing costs allows purchasers of goods and services some ability to decide if they want to pay those costs. If they don't, producer sand providers will have to compete harder and innovate more. Letting costs remain as externalities means they are paid without knowledge or consent.
Those who are already whining about the burdens of regulation fail to recognize that regulation internalizes otherwise external costs. Regulation does not create costs out of thin air; nor does the lifting of regulation cause those costs to vanish back into thin air again. Internalizing costs allows purchasers of goods and services some ability to decide if they want to pay those costs. If they don't, producer sand providers will have to compete harder and innovate more. Letting costs remain as externalities means they are paid without knowledge or consent.
1
"Regulation does not create costs out of thin air; nor does the lifting of regulation cause those costs to vanish back into thin air again"
Adding ever more regulations results in ever more useless, parasitic, self-serving government bureaucrats to enforce them thus it does create more costs. However, should these regulations be dropped there is no guarantee that these costs will also disappear since the government never seems to be able to fire unneeded bureaucrats.
Adding ever more regulations results in ever more useless, parasitic, self-serving government bureaucrats to enforce them thus it does create more costs. However, should these regulations be dropped there is no guarantee that these costs will also disappear since the government never seems to be able to fire unneeded bureaucrats.
3
While many factors affect the economy, this column is way overstated re the lack of influence of the President The President along with Congress set both tax policies and and spending amounts and priorities that nudge the economy is different directions. And things like social security, Medicare, and the ACA have huge economic impact on people's lives separate from any measure of GDP.
2
A question all candidates including Presidential candidates should answer: what is the minimum income our individual citizens must have to escape poverty? What policies will they propose to ensure every citizen lives above the poverty level? Prospective Senators, Representatives, and Presidential candidates should answer these questions or get out of races for national offices.
4
Great post. One item that would help is a progressive labor department that actually helped achieve unionization of Walmart. That would be a dramatic first step.
Mr Covert and Readers: To not assign blame to the designers of an under performing economy promotes an increased lack of accountability. To grant general absolution to the 535 members of Congress and the President without scoring individual performances in the economic sphere is a dereliction of the citizenry's duty to protect their economic goals from others' competing conflicts of interests. For example, as many wages have stagnated over recent decades, the value of a 4-year degree has increased in its marginal value to deliver employment and opportunities for increased wages. Upward mobility economically, socially, and politically seems to be at stake. Although the $1.3 trillion in outstanding student loans will garner much attention during the political campaign, especially of note is a large portion of this debt owed to private, for profit internet universities, that do not deliver the promised ROI from increasingly attractive 4-year college degrees. The goal of these internet students is to acquire the human capital to try and advance in an often stagnant job market. Studies have shown that the US ranks very low among OECD (developed) countries in offering opportunities for its citizenry to advance economically via apprenticeship programs, worker training, and educational programs. This economic stagnation seems to have been well documented in Dr. Piketty's treatise: "Capital in the Twenty-First Century."
[JJL 06/20/2016 M 11:22a Greenville NC]
[JJL 06/20/2016 M 11:22a Greenville NC]
3
A different take: national politicians would do well to ensure all citizens earn enough to live at or above poverty levels. Step one is to establish the dollar amount necessary to escape poverty. Replace existing give-away programs with jobs programs that ensure all citizens are contributing to society. If the private sector doesn't put individuals to work, the goverment can and must employ them. The minimum wage should enable individuals to earn whatever it takes to escape poverty. Universal social security should pay enough to escape poverty, but individuals should use their own resources (savings or earnings) to enjoy a more affluent live style. This approach would motivate people to save for retirement and at the same time ensure every citizen has sufficient income to escape poverty. Again, the first step is to establish the income level necessary to escape current poverty level. Yes, those who earn high incomes must pay enough in taxes to pay those who choose to live at the poverty level. But no one would escape the necessity of working and saving to achieve a higher standard of living. Since all citizens would be living at or above the poverty level, food stamps and housing subsidies would be unnecessary. Get rid of give-away and start motivating all to contribute to both society and their own well-being. Veery one wins when everyone contributes.
1
The president can push for a strong fiscal stimulus package to rebild and modernize our infrastructure and to support R&D projects so that we dtay a global technology leader. Billions if not trillions need to be spent. The cononybwould boom. Yes, debt would increase, but at a 2.5% borriwing rate for 30 years it's cheap and with debt st 75% of GDP it's affordable. With a booming GDP, the debt percentage would come down. of sourse, we need a Democratic landslide for this to happen, but it's what thus country needs. And the president can lead the way.
1
"The president can push for a strong fiscal stimulus package to rebild and modernize our infrastructure "
Of course he would, since the democrats would demand that all infrastructure work only be done by "prevailing wage" union workers who not only cost 25% more than their non-union counterparts but also kickback most of their union dues to the democrats. The more infrastructure spending the more union kickback money for the democrats.
Of course he would, since the democrats would demand that all infrastructure work only be done by "prevailing wage" union workers who not only cost 25% more than their non-union counterparts but also kickback most of their union dues to the democrats. The more infrastructure spending the more union kickback money for the democrats.
4
Covert's column skirts the real issue that divides the two parties, namely, the capacity of the federal government (not just the president) to influence the course of the economy. The fate of a market economy, of course, depends mainly on forces beyond the state's control, but the GOP and Democrats differ sharply over the subsidiary role played by government.
The Republicans, with their doctrinaire faith in the power of markets, advocate an essentially passive role for the state. The party routinely demands lower taxes; reduced business regulations; and a curtailment of spending on the safety net. That any or all of these measures might destabilize the economy, under certain conditions, is an idea whose acceptance would require an understanding of the inherent volatility of markets. Nuanced thinking of this nature would constitute cause for expulsion of the heretic from the contemporary GOP.
The Demos, for their part, harbor a more skeptical view of the self-regulating capacity of markets. Their support of a more robust economic role for government stems partially from this attitude, combined with a belief that markets by themselves cannot advance the cause of social justice and equality. These biases sometimes cause the party to exaggerate the positive impact of government, but its eclectic voter base usually restrains the progressive elements. This nuanced approach, not luck, explains the better performance of the economy under Democratic administrations.
The Republicans, with their doctrinaire faith in the power of markets, advocate an essentially passive role for the state. The party routinely demands lower taxes; reduced business regulations; and a curtailment of spending on the safety net. That any or all of these measures might destabilize the economy, under certain conditions, is an idea whose acceptance would require an understanding of the inherent volatility of markets. Nuanced thinking of this nature would constitute cause for expulsion of the heretic from the contemporary GOP.
The Demos, for their part, harbor a more skeptical view of the self-regulating capacity of markets. Their support of a more robust economic role for government stems partially from this attitude, combined with a belief that markets by themselves cannot advance the cause of social justice and equality. These biases sometimes cause the party to exaggerate the positive impact of government, but its eclectic voter base usually restrains the progressive elements. This nuanced approach, not luck, explains the better performance of the economy under Democratic administrations.
2
The government worshiping liberal/progressive democrats can never have too much government. In their ideal world the primary function of the US military would not be national defense but rather "social justice" by making high school dropouts get their GEDs.
3
The news regarding the American middle class is not all bad. Although the middle class has not kept pace with upper-income households, its median income, adjusted for household size, has risen over the long haul, increasing 34% since 1970. That is not as strong as the 47% increase in income for upper-income households, though it is greater than the 28% increase among lower-income households.
2
Regardless of one's belief in luck or not to explain the gap, reading the first of the two papers referred to in this piece is extremely interesting. Blinder investigates many possible factors that individually might explain the gap, and none do so. I found that the non-parametric blind analysis to be the most convincing on the luck side, but that 1.8% difference over time is hard to ignore.
1
It is the FED, stupid. Many Federal Reserve officials and others have expressed the view that the level of unemployment is either now or soon will be at an unacceptably low level. In order to prevent a low level of unemployment leading to an unacceptably high level of people with jobs and having their wages increase, some Federal Reserve officials and others believe that the Federal Reserve should increase interest rates.
Interestingly, almost all politicians in this election year assert that unemployment is too high and that wages and economic growth are too low. Those running for office all promise that by electing them they will increase jobs and wage growth. Clearly, given the stance of some Federal Reserve officials, all of the promises of higher growth and wages by the politicians logically are false.
Even if we make the assumption, and it is quite an heroic assumption, that newly elected officials will implement the absolutely greatest jobs creating program which gives an unprecedented “bang for the buck” increase in jobs for each dollar spent, either from tax incentives, tax cuts or spending programs, it will all be in vain if the Federal Reserve uses the power it has to prevent unemployment from falling below the Federal Reserve's desired level. The only result of the fiscal policy that attempted to increase jobs and wages would be higher deficits accompanying higher interest payments on a growing national debt...."
http://seekingalpha.com/article/3977109
Interestingly, almost all politicians in this election year assert that unemployment is too high and that wages and economic growth are too low. Those running for office all promise that by electing them they will increase jobs and wage growth. Clearly, given the stance of some Federal Reserve officials, all of the promises of higher growth and wages by the politicians logically are false.
Even if we make the assumption, and it is quite an heroic assumption, that newly elected officials will implement the absolutely greatest jobs creating program which gives an unprecedented “bang for the buck” increase in jobs for each dollar spent, either from tax incentives, tax cuts or spending programs, it will all be in vain if the Federal Reserve uses the power it has to prevent unemployment from falling below the Federal Reserve's desired level. The only result of the fiscal policy that attempted to increase jobs and wages would be higher deficits accompanying higher interest payments on a growing national debt...."
http://seekingalpha.com/article/3977109
1
The majority of voters don't understand that the economic cycle has its' own life. Dems insist that Bush was responsible for the last recession.
2
While Bryce Covert's main point---that the president on his own can do little to create jobs---is well taken, a couple of caveats are in order.
1) Ultimately, it is only the government that can create the climate and conditions to stimulate economic growth through its regulatory, monetary and fiscal policies. Growth does not occur automatically.
2) Economic growth in and of itself, does not ensure job creation. Job creation in an economy that delivers the benefits of growth to 0.1% of the population will always be somewhat anemic at best. Job creation occurs when it seen as one of government's primary goals, rather than simply the by-product of economic growth.
Economists should be required to re-read Keynes as a condition of their employment.
http://www.levyinstitute.org/pubs/wp_789.pdf
1) Ultimately, it is only the government that can create the climate and conditions to stimulate economic growth through its regulatory, monetary and fiscal policies. Growth does not occur automatically.
2) Economic growth in and of itself, does not ensure job creation. Job creation in an economy that delivers the benefits of growth to 0.1% of the population will always be somewhat anemic at best. Job creation occurs when it seen as one of government's primary goals, rather than simply the by-product of economic growth.
Economists should be required to re-read Keynes as a condition of their employment.
http://www.levyinstitute.org/pubs/wp_789.pdf
I didn't really need 1200 words to tell me that a President is less effective when facing a hostile congress. You can find plenty of examples throughout US history. The 80th "do-nothing" Congress under Truman is the most frequently cited. Although, the current 114th makes them look like amateurs.
The conclusion provides an alarming foreshadow of think-tank forecasting though. Check the very last paragraph. While I don't know Bryce Covert's politics, I'll take this opinion to suggest he prefers or expects a President Clinton over a President Trump. However, the entire piece focuses on distancing the President from the economy and directing responsibility towards Congress.
Note, Democrats have almost zero chance of re-capturing the House this election cycle. They may conceivably re-take the Senate but by a narrow margin at best. So, assuming Clinton wins the general but the House remains Republican, why would you distance the most public figure of the Democratic party from the most critical issue for voters?
I'm guessing economists are expecting the economy to tank within the next President's first term. This is laying the ground work to point the blame elsewhere. Call it preemptive damage control.
The conclusion provides an alarming foreshadow of think-tank forecasting though. Check the very last paragraph. While I don't know Bryce Covert's politics, I'll take this opinion to suggest he prefers or expects a President Clinton over a President Trump. However, the entire piece focuses on distancing the President from the economy and directing responsibility towards Congress.
Note, Democrats have almost zero chance of re-capturing the House this election cycle. They may conceivably re-take the Senate but by a narrow margin at best. So, assuming Clinton wins the general but the House remains Republican, why would you distance the most public figure of the Democratic party from the most critical issue for voters?
I'm guessing economists are expecting the economy to tank within the next President's first term. This is laying the ground work to point the blame elsewhere. Call it preemptive damage control.
1
Wow, you are not even close on the "almost certainly" point. Iceland "ripped the band-aid off" and they bounced back just fine. Great Britain did not blow up their debt level and their economy is not too shabby either. In addition, "without, most likely, costing jobs" ignores the ways of the world today. Just as consumers are compelled each day by their ability to buy stuff cheaper, businesses are playing the same game. In strikes me as curious that consumers are willing to use coupons to save but they find it horrify that a business would seek the lowest labor cost. The minimum wage job gain/loss argument is far from decisive.
2
Given what has been learned about ultra-conservative efforts to sabotage President Obama, sadly, it would not be surprising that some conservative corporate leaders deliberately refused (even conspired) to hire, with the goal of damaging the economy and blaming President Obama.
Seems more like a plot of a thriller, but it seems that no matter the harmful impact on the U.S., there appear to be some ultra-conservatives willing to do anything to try to destroy the Obama administration.
Seems more like a plot of a thriller, but it seems that no matter the harmful impact on the U.S., there appear to be some ultra-conservatives willing to do anything to try to destroy the Obama administration.
2
In a nutshell, the President has limited direct influence over the economy, but much indirect influence. Further, all the traditional Republican policies are counter productive, the Democrat policies are productive.
Got it.
Got it.
6
This leads to the conclusion that the president at any given time, i.e. the result of an election's outcome, is a symptom rather than the cause. The economy does better while Democrats are in because, when the climate leans left, we're more resistant and less vulnerable to the things that drive income inequality, such as lopsided tax cuts, slashed entitlements, deregulation, low minimum wages, incentivized offshoring, etc. etc.
So, it seems to me that there is a connection, but with the cart and horse reversed.
So, it seems to me that there is a connection, but with the cart and horse reversed.
1
The reason why it seems that presidents don't have much of an impact on the economy is that since WWII most presidents, including the current one, managed macroeconomic issues within a narrow set of assumptions. In effect, they all accepted the counter cyclical macroeconomic arguments of Fisher and Keynes. If aggregate demand was weak, some sort of fiscal stimulus was applied along with eased monetary policies executed through lower interest rates. If inflation was high, fiscal restraint was applied along with higher interest rates. Everyone governed this way, even Eisenhower, Nixon, Reagan, and Bush pere, so it's really hard to tease out the impact of various presidents on economic growth from all the background noise influencing that growth. There just hasn't been enough of a difference in presidential economic management styles across time to generate unambiguous statistical results in the data.
It's also in part what makes today's GOP so spooky. None of their principles seems to understand what makes the macro economy work. All they do is parrot the tax cut balanced budget nonsense of the Norquist camp. So believe me, if our nation is foolish enough to give control of the government back to today's GOP, you'll see a huge impact by the president on the nation's economy. Unfortunately, that impact will be like Hoover's in 1929!
It's also in part what makes today's GOP so spooky. None of their principles seems to understand what makes the macro economy work. All they do is parrot the tax cut balanced budget nonsense of the Norquist camp. So believe me, if our nation is foolish enough to give control of the government back to today's GOP, you'll see a huge impact by the president on the nation's economy. Unfortunately, that impact will be like Hoover's in 1929!
34
If the nation is foolish enough to give complete control to today's GOP it will indeed be a disaster; no check or balance. Regardless of how the economy performed under past presidents, it and they benefited from having a reasonable Congress. Recently Congress has been all check and no balance, and this is likely to continue unless control of the Senate changes. Control of the House is unlikely to change, but that at least provides some balance.
3
@PJ:
You're right about that. If I had had the space, I would have emphasized how at odds current GOP economic orthodoxy is from everything you should learn from a freshman year macroeconomic college course. It's really amazing to see so many credentialed people on the Right get so much wrong about their field of expertise. I suppose it's just the continuing fallout from the politicization of economics that started with Milton Friedman and the Chicago school of economics back in the 1960's.
You're right about that. If I had had the space, I would have emphasized how at odds current GOP economic orthodoxy is from everything you should learn from a freshman year macroeconomic college course. It's really amazing to see so many credentialed people on the Right get so much wrong about their field of expertise. I suppose it's just the continuing fallout from the politicization of economics that started with Milton Friedman and the Chicago school of economics back in the 1960's.
3
The source of all money is congressional appropriation. When congress appropriates, there is prosperity. That's _congress_, not the president.
3
The global economy has a life of its own. It rises and falls, expands and contracts on its own schedule. The President of the United States can affect this rise and fall around the edges, but he or she does not and cannot control the global business cycle. No matter who won the 2012 election, Obama or Romney, the national economy was going to get better. That is what it does.
What the President CAN do is set policies that tilt the field one way or another as the economy strengthens and weakens. Presidents can affect who suffers most in a downturn and benefits most in an upswing.
Republicans who claim Obama is popular because he gives people free stuff ignore the act that Romney would have given people free stuff too--it just would have been different people than those who have benefited from President Obama's policies.
http://c-dawson.blogspot.com/2012/11/mitt-romneys-analysis.html
What the President CAN do is set policies that tilt the field one way or another as the economy strengthens and weakens. Presidents can affect who suffers most in a downturn and benefits most in an upswing.
Republicans who claim Obama is popular because he gives people free stuff ignore the act that Romney would have given people free stuff too--it just would have been different people than those who have benefited from President Obama's policies.
http://c-dawson.blogspot.com/2012/11/mitt-romneys-analysis.html
1
Presidents of both political parties have made deliberate choices that align with the interests of multinational corporations, banks, & billionaires at the expense of the American middle (& now upper middle) worker. This has decimated & gutted millions of once-proud middle & working class jobs in anything ranging from once-unionized contractors to once-secure health care, teaching, legal, manufacturing, research positions, etc. The problem is economists are too often aligned to the plutocratic class & so define the 'economy' to measure only aspects of our system that matter to the plutocrats.
In fact, presidents make powerful decisions that impact American workers daily.
The presidential decision for NAFTA & now to further expand "free" trade has been a huge driver of the disappearance of American middle class jobs.
The presidential decision to support H-1B visas non transparently, with a wink, wink nod nod, has been a huge driver in the disappearance of American middle class jobs - American workers (most recently tech workers) have been forced to train their cheaper replacements, while, straightfaced, CEOs claim they 'can't'' find skilled American workers.
The presidential decision to attack teachers & professors as a threat to our already decimated middle class jobs has been a huge decimater of middle class jobs.
I could go on & on. Presidents have enormous power to impact economic quality of life, as long as you count 90% of Americans as mattering.
In fact, presidents make powerful decisions that impact American workers daily.
The presidential decision for NAFTA & now to further expand "free" trade has been a huge driver of the disappearance of American middle class jobs.
The presidential decision to support H-1B visas non transparently, with a wink, wink nod nod, has been a huge driver in the disappearance of American middle class jobs - American workers (most recently tech workers) have been forced to train their cheaper replacements, while, straightfaced, CEOs claim they 'can't'' find skilled American workers.
The presidential decision to attack teachers & professors as a threat to our already decimated middle class jobs has been a huge decimater of middle class jobs.
I could go on & on. Presidents have enormous power to impact economic quality of life, as long as you count 90% of Americans as mattering.
3
Since Jimmy Carter and before it has been common propaganda to say government cannot make jobs or influence economic growth. That's total nonsense. Although nobody particularly cares to look at history, it is nevertheless a fact that the first FDR Administration created 6 million jobs. The ability of the federal government to create jobs is a matter of political will, not a question of insufficient power. Unfortunately we have a "do nothing" Congress that stands against economic growth. But when we can finally get to work on building infrastructure and environmental safety, joblessness will become a story of an avoidable past.
4
And so many things done in the FDR years not only provided employment at that moment, but have had a lasting effect on the country: the golden Gate Bridge to name just one. It linked disparate geographies, it is a beautiful icon for the ages, and people come from all over the world to see it-- and spend their tourist dollars while they are here.
What? Obama takes all the credit and the NYT says he really has nothing to do with this? We know the President has never put forth a jobs plan. in fact his entire economic policy is summed up in 2 words. Janet Yellen. Even when all 2 branches of government were controlled by Democrats there was not one jobs bill. Democrats and OBAMA did NOTHING on immigration, education, help for minorities, gun control. They could have done it all with no one to stop them. They did nothing. If not for Trump Republicans would sweep and also get rid of the terrible law know as the ACA. Shameful President with Clinton even worse in judgment than Obama. Help us someone. Anyone
1
The NYT doesn't say he has nothing to do with it. Covert Say Presidents don't.
Jobs Plan was submitted 2009. Dream act. ACA was a Republican Heritage Foundation plan that Romney implemented successfully in Mass.
Shameful do knowthing Republican Congress.
Jobs Plan was submitted 2009. Dream act. ACA was a Republican Heritage Foundation plan that Romney implemented successfully in Mass.
Shameful do knowthing Republican Congress.
2
Mr. Conyers is skillful at cherry-picking the evidence to advancing his political agenda. For example, he points out that measures to reduce income inequality, as advocated by the current Democratic Presidential candidates, can be a drag on growth. But he fails to mention that the economics also clearly shows that concentration of economic power in oligopolies, consistently supported by Republicans, hampers growth and innovation as well.
It's no mystery why the economy performs better under Democratic administrations. For the last 30 years the Republicans have blocked all public investments and engineered redistribution of income away from the middle class. How anti-growth can you get?
It's no mystery why the economy performs better under Democratic administrations. For the last 30 years the Republicans have blocked all public investments and engineered redistribution of income away from the middle class. How anti-growth can you get?
1
This article shows we need a new congress. The one we have does not work and will not work with Hillary. Republicans for decades now, have only cared about the rich and businesses. Democrats have always cared about the people. It should be obvious to everybody, but the media has a way of skewing details to meet their own agenda - which is to keep on making money.
5
I strongly disagree with this analysis. It seems to me that the economy is most affected by HOPE. Under good leadership there is a sense of hope and under poor leadership there is a sense of hopelessness. As Jesse Jackson said at the Democratic convention in 1988, "keep hope alive."
The more hope we feel, the more optimistic we are, and the more people will invest and spend in the economy.
It seems to me that Hillary Clinton will likely offer more optimism for the economy, than Trump. Clinton has the experience, while Trump has zero experience. Clinton, as the first woman president, will encourage more women to seek hope in the workplace.
I think the only thing we have to fear is...Donald Trump.
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The more hope we feel, the more optimistic we are, and the more people will invest and spend in the economy.
It seems to me that Hillary Clinton will likely offer more optimism for the economy, than Trump. Clinton has the experience, while Trump has zero experience. Clinton, as the first woman president, will encourage more women to seek hope in the workplace.
I think the only thing we have to fear is...Donald Trump.
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Bryce Covert claims that, despite a clear, post-WW2 pattern of better economic performance during Democratic administrations than during Republican administrations, two papers claim that 1) Presidents have limited power to affect the economy, and 2) the better Democratic performance is "mostly about luck".
He is correct about the first claim. The second claim, about luck, is wrong and is based on his misreading of the papers.
The Blinder/Watson paper documents the major difference between Dem. and Rep. administrations, then attempts to explain that difference. It does not conclude that it's "mostly about luck". Instead, it suggests a variety of explanations, each of which contribute in some part to the difference.
Among those explanations, it includes "shocks" to oil prices, productivity, and consumer expectations, and states that "the first two of these look a lot more like good luck than good policy. That is a far cry from Covert's "It's mostly about luck".
Moreover, it's hard to believe that "luck" could create such a major difference. Over 68 years, split roughly equally, with 6 Democrats in office for 32 years and 6 Republican in office for 36 years, "average growth rates under Democratic and Republican presidents were starkly different: 4.35% and 2.54% respectively. This 1.80 percentage point gap ... is astoundingly large ... " an average of 18.6% growth over a Democratic term, but only 10.6% over a Republican term.
Whatever the cause, it's not luck.
He is correct about the first claim. The second claim, about luck, is wrong and is based on his misreading of the papers.
The Blinder/Watson paper documents the major difference between Dem. and Rep. administrations, then attempts to explain that difference. It does not conclude that it's "mostly about luck". Instead, it suggests a variety of explanations, each of which contribute in some part to the difference.
Among those explanations, it includes "shocks" to oil prices, productivity, and consumer expectations, and states that "the first two of these look a lot more like good luck than good policy. That is a far cry from Covert's "It's mostly about luck".
Moreover, it's hard to believe that "luck" could create such a major difference. Over 68 years, split roughly equally, with 6 Democrats in office for 32 years and 6 Republican in office for 36 years, "average growth rates under Democratic and Republican presidents were starkly different: 4.35% and 2.54% respectively. This 1.80 percentage point gap ... is astoundingly large ... " an average of 18.6% growth over a Democratic term, but only 10.6% over a Republican term.
Whatever the cause, it's not luck.
44
Other than those very expensive regulations that this administration has imposed the president can only be a good leader. Obama makes regulations that restrain the economy, is a very poor leader, and being foolish like shovel ready projects lacks truth.
1
Interesting to read the examples you have cited to support your claim.
2
When job growth or other good economic markers are present, presidents and their supporters tout the president's success. When the markers aren't good, we get articles like this. If HRC becomes president she'll talk about progressive policies but she'll work for corporatist ones! Where on earth the author got the idea that HRC actually cares at all about paid family leave, or an real increase int the minimum wages beyond their use as a cover for her real corporatist policy views, I guess he got the HRC campaign memo and that was enough.
The government can do a lot about jobs and income for workers and the middle class but in the last decade or so it has chosen not to; instead, it has focused on more tax cuts for the rich and corporate. It has sent more money abroad for wars and to support theocratic dictatorships. It has allowed the erosion of workers and consumer rights and made it clear that the only "people" that matter are the legal fictions called corporations.
That is the Obama-Clinton legacy that the Democratic Party leadership is pushing. It's appalling.
The government can do a lot about jobs and income for workers and the middle class but in the last decade or so it has chosen not to; instead, it has focused on more tax cuts for the rich and corporate. It has sent more money abroad for wars and to support theocratic dictatorships. It has allowed the erosion of workers and consumer rights and made it clear that the only "people" that matter are the legal fictions called corporations.
That is the Obama-Clinton legacy that the Democratic Party leadership is pushing. It's appalling.
7
The Congress passes the laws. The President can request, but he doesn't necessarily get, and can only sign or veto what does pass. President Obama has never requested tax cuts for the rich.
3
Of course John Boehner and Paul Ryan had nothing to do with those limits on infrastructure spending and the aggressiveness of the tax cuts, especially those for the wealthiest Americans. Congress controls the purse strings and it has been the Republicans who have fecklessly eroded the American economy.
This article is very disingenous.
It's true a single president in a single mandate (be it one or a two term mandate) cannot, ceteris paribus, change the "economy" in the sense that he or she can change the relations of production of society completely (the exception is when we are in a revolutionary context).
But the author is wrong when he implies the State is not an instrument of substantial and permanent change. It can be an instrument of revolutionary change in the hands of the working class; it can be an instrument of maintenance or strenghtening (reactionary change) of the status quo if in the hands of the capitalist class (as is the default case). It can't be both at the same time, but it can be one or another.
So, the premise implied by the author - that the State can never be an instrument of revolutionary change, and thus that it's not worth for the working class to dispute it because the real power is with big corporations (private property) - is the ideal rationalization for the dominant class, because it ends with the good fight before it begins. That said, the American working displayed it's division, defeatism and cowardice when it rejected Sanders, so this psychological strategy to kill hope really works - it's up to the people to break this encirclement.
It's true a single president in a single mandate (be it one or a two term mandate) cannot, ceteris paribus, change the "economy" in the sense that he or she can change the relations of production of society completely (the exception is when we are in a revolutionary context).
But the author is wrong when he implies the State is not an instrument of substantial and permanent change. It can be an instrument of revolutionary change in the hands of the working class; it can be an instrument of maintenance or strenghtening (reactionary change) of the status quo if in the hands of the capitalist class (as is the default case). It can't be both at the same time, but it can be one or another.
So, the premise implied by the author - that the State can never be an instrument of revolutionary change, and thus that it's not worth for the working class to dispute it because the real power is with big corporations (private property) - is the ideal rationalization for the dominant class, because it ends with the good fight before it begins. That said, the American working displayed it's division, defeatism and cowardice when it rejected Sanders, so this psychological strategy to kill hope really works - it's up to the people to break this encirclement.
10
Given that global forces will ultimately produce economic gains or losses it is the individual himself (or herself) who must ford a path to prosperity by developing skills that another is willing to pay for. Look in the mirror for solutions rather than to elections. Flexibility is paramount.
4
The main premise of this opinion piece is flawed. The President has very limited power to influence the economy without a Congress willing to help. If the Congress composition changes it could lead to a very different economy. We can see that at the state level. California government was almost as dysfunctional as the Federal government while Republicans had enough representatives in the sate assembly to block changes. With that hurdle removed California is enjoying a renaissance thanks to Governor Brown and a cooperative legislature. The problem for presidents is that voters tend to blame (or praise) them for the national economy without taking into account the important role of Congress and other extraneous factors.
5
The underlying message here is that only the wealthy count. And if you take care of them they will take care of you. No matter who writes it it's still the same.
Please stop telling me how wonderful people coming from Mexico is for the economy. It's great for the economy if you're a massive corporation or if you are rich but it's not so hot for anyone else. The day these people are paid a fair wage and have the benefits of other employees I'll say yes but until that day they are just a way for the rich to skim more cream at the expense of everyone else.
To my fellow Democrats, if you believe in this policy then you should be fighting for these folks to be paid honestly and get the same benefits as everyone else. They drive down wages and YES they do take jobs from Americans who can't afford to work for 5.00 an hour. Americans WILL DO this work. They may not in California but the rest of the country has plenty of lawn care people and construction and farming all done by Americans.
As to the President, (s)he sets the tone for the Party. (s)he can drive the narrative or could until each member of Congress had their own Corporate Sponsor. At best it is disingenuous to imply the President can do nothing. The President can pressure Congress to set proper policy for growth. And that is really the biggest stick.
Please stop telling me how wonderful people coming from Mexico is for the economy. It's great for the economy if you're a massive corporation or if you are rich but it's not so hot for anyone else. The day these people are paid a fair wage and have the benefits of other employees I'll say yes but until that day they are just a way for the rich to skim more cream at the expense of everyone else.
To my fellow Democrats, if you believe in this policy then you should be fighting for these folks to be paid honestly and get the same benefits as everyone else. They drive down wages and YES they do take jobs from Americans who can't afford to work for 5.00 an hour. Americans WILL DO this work. They may not in California but the rest of the country has plenty of lawn care people and construction and farming all done by Americans.
As to the President, (s)he sets the tone for the Party. (s)he can drive the narrative or could until each member of Congress had their own Corporate Sponsor. At best it is disingenuous to imply the President can do nothing. The President can pressure Congress to set proper policy for growth. And that is really the biggest stick.
2
The president can do only so much in terms of formal policy decisions. As a reader of the Nation, I'm fond of Ms. Covert but I do think she's leaving out some crucial stuff. Namely, the psychological impact a president can have on people's economic behavior. It a hard thing to measure, but one can look at the trends on a broad scale. Compare FDR, who people listened to and took advice from. The result was a generation or more who managed money well, saved but did not hoard, and had a solid knowledge of the value of money. Contrast with what a generation learned under Reagan: Borrow, it's fun. Bankruptcy is just fine even when it's not morally cool (Trump anyone?) and a whole litany of bad long tern habits. To say nothing of the young having zero concept how hard Americans worked to build up the standard of living that Reagan's policies were able to crush for many in just eight years. Reagan may not have said "act bad" but he and his crew knew exactly what kind of messages they were sending out, in the most cynical way possible.
28
The real death blow to American manufacturing was Reagan nixing Metric Conversion. The US is the lone nation on this planet still using measurement units based on the dimensions of kings.
Stupid presidents can blow out the brains of the whole country.
Stupid presidents can blow out the brains of the whole country.
1
I am voting for Hillary, but I am not gullible that what ever comes from her mouth about economy will be better in the future.
Because, we already know what will affect the future jobs, pretending an election year promises are going to override those trends is only the gullible voters dream.
Reality is different. Presidents can do something but they do not change over all trend. That si why Obama's economic score is excellent meanwhile GW Bush economic score is in shambles.
Let's put in this way, at least a president can do , not to inflict harm nations economy. GW Bush was unfortunately created a huge economic devastation with his decision to go 2 wars, Afghanistan was necessary but still kept under control, Iraq was not justifiable. ( please do not tell me Hillary vote yes for IRAQ war, buck stops at presidents desk)
So please not to be that much gullible.
Because, we already know what will affect the future jobs, pretending an election year promises are going to override those trends is only the gullible voters dream.
Reality is different. Presidents can do something but they do not change over all trend. That si why Obama's economic score is excellent meanwhile GW Bush economic score is in shambles.
Let's put in this way, at least a president can do , not to inflict harm nations economy. GW Bush was unfortunately created a huge economic devastation with his decision to go 2 wars, Afghanistan was necessary but still kept under control, Iraq was not justifiable. ( please do not tell me Hillary vote yes for IRAQ war, buck stops at presidents desk)
So please not to be that much gullible.
1
Thid administration has saddled the economy with 400,000 pages of new regulation. So, let's stop the big lie about the White House not having any responsibility for this terrible economy.
2
Nonsense! The President can set the tone and change the focus. Given a rational Congress, major economic change is the result. Teddy and Franklin Roosevelt, Truman, Eisenhower, LBJ, Clinton, and Obama have all re-directed the economy successfully. Where would the Economy be today had Obama not saved the auto industry? Renewable energy? Healthcare? Where would America be today but for Obama's efforts. Sure, it's popular among economists who want a job with Republicans (once they dump Trump) to portray Obama as a failure, even while collecting stock dividends. These apologists for racists are an incestuous cabal who have no audience beyond our borders. The world knows what Obama has accomplished. It's not about luck.
"Starting a war in the Middle East will affect oil prices" was a pre-Obama truism. Remember, Romney promised gas at $2.50 per gallon? Under Obama we increased oil and gas production and explosive growth in the renewable energy economy broke the back of OPEC and bankrupted coal.
B. Clinton raised taxes, aided and promoted the dot.com economy. When Hillary Clinton wins the White House, the Senate will become Democratic and the House will be defanged. No one thinks Republicans can hold the Senate unless they win the White House. Clinton will get her infrastructure funding.
The private sector creates bubbles, and depressions. Government, under Democratic Presidents, has restored collapsed economies, not the "invisible hand". The invisible hand is hocus pocus.
"Starting a war in the Middle East will affect oil prices" was a pre-Obama truism. Remember, Romney promised gas at $2.50 per gallon? Under Obama we increased oil and gas production and explosive growth in the renewable energy economy broke the back of OPEC and bankrupted coal.
B. Clinton raised taxes, aided and promoted the dot.com economy. When Hillary Clinton wins the White House, the Senate will become Democratic and the House will be defanged. No one thinks Republicans can hold the Senate unless they win the White House. Clinton will get her infrastructure funding.
The private sector creates bubbles, and depressions. Government, under Democratic Presidents, has restored collapsed economies, not the "invisible hand". The invisible hand is hocus pocus.
4
PERCEPTION and politics make strange bedfellows. For in our day and age it is far more common for parties and pols to portray image rather intent. Clearly what is needed is clarification of who does what and how. As things stand now it's like the Abbott and Costello immortal question: Who's On First? Obama in an early press conference, used the metaphor of the power of the presidency to effect change being like a captain steering a huge ocean going vessel, where some small changes in course may bring about change in the distant future. So it is, I believe, with the economy, which symbolizes the dynamic by which the US produces and consumes goods and services. Understanding the mix and measuring the activity is extremely complex and subject to unexpected changes due to events beyond the control of government, leave alone the President. So why was it that FDR inspired such courage in reviving the economy from the Great Depression? In his fireside chats, he reassured the people that things would turn around, and matched his word with actions. His economies are classic examples of the powerful benefits of deficit spending, increasing government programs and reviving manufacturing and trade. The emergency measures required to respond to WW II helped. But surely nobody could attribute that horrible to the direct actions of the President. So with our Balkanized culture where every group lives online in its own parallel universe, what's a President to do?
The perception that the president is responsible for economic growth is for most part naive and dangerous.
The economy is extraordinarily complex----like any large system. Yes there are some things a president can do, but for the most part each decade has its own DNA ---its own issues, problems, challenges etc.
Yes Obama help stave off a really bad depression. The financial crisis needed to be addressed and frankly once the safety net was put in place the inner strength of the economy was able to flexed hence a recovery.
But we have failed to address the real drivers of innovation and expansion. Education and government investment and thus we have a huge economic malaise for the middle 80%.
But there is an opportunity to deal with the DNA of our current economy Amp up and ramp up rebuilding our infrastructure. Pour money into R and D for medical innovation and cyber security. Put real money and backbone into education for all Americans---a total no brainer. Adjust tax rates to help reduce deficits to make our tax policy fair and balanced.
Yes the tools to reinvigorate our economy are within reach to HRV. Whether she has the courage and political chops will be her ultimate test.
The economy is extraordinarily complex----like any large system. Yes there are some things a president can do, but for the most part each decade has its own DNA ---its own issues, problems, challenges etc.
Yes Obama help stave off a really bad depression. The financial crisis needed to be addressed and frankly once the safety net was put in place the inner strength of the economy was able to flexed hence a recovery.
But we have failed to address the real drivers of innovation and expansion. Education and government investment and thus we have a huge economic malaise for the middle 80%.
But there is an opportunity to deal with the DNA of our current economy Amp up and ramp up rebuilding our infrastructure. Pour money into R and D for medical innovation and cyber security. Put real money and backbone into education for all Americans---a total no brainer. Adjust tax rates to help reduce deficits to make our tax policy fair and balanced.
Yes the tools to reinvigorate our economy are within reach to HRV. Whether she has the courage and political chops will be her ultimate test.
The President controls a great deal of economic policy by his/her appointments - for the Cabinet, the Fed and regulatory agencies. The President takes the initiative on international trade. This can be very important in setting trends such as deregulation, financialization and globalization. Presidents of both parties have made decisions and appointments that have reduced regulation, leading to major financial crashes, increased the economic power of big banks and Wall Street, and caused the movement of jobs out of the country. If the trends of the last 50 years are to be reversed, it will probably be necessary to have a President who is really committed to such change and has plans that are not just perfunctory on the one hand or empty bluster on the other.
7
The truth lies closer to the observation that while a President can't create meaningful jobs, the President can lead the country down the path of destroying them. This has been a fact since 1980 and the election of Ronald Reagan.
91
The most important thing government can do today to improve the economy is to rebuild and upgrade our crumbling infrastructure, improve our schools and public education, and invest in basic research. Properly addressing these issues will provide more jobs that can't be shipped overseas, stimulate business, and improve the quality of life for everyone. Unfortunately the Republican Congress in its zeal to cut spending and lower taxes has foolishly blocked these necessary steps. They must take a very large part of the blame for the continuing underemployment, the slow recovery, and income inequality. Sometimes party dogma can be the right option, but in the present environment, further tax cuts and further reduction in government spending is exactly the wrong solution. The present slow economy will continue until their is a significant change in Congress.
7
"The most important thing government can do today to improve the economy is to rebuild and upgrade our crumbling infrastructure,"
Perhaps if the democrats did not demand that all infrastructure work only be done by "prevailing wage" union workers who cost 25% more than their non-union counterparts and then kickback most of their union dues to the democrats the GOP might agree to infrastructure spending. But they would be foolish to agree to anything that gives kickback money to the democrats.
Why not let states with Right-to-Work laws use only non-union workers for infrastructure repairs and restrict union workers to those states without such laws. Then compare the cost and quality of union vs non-union work?
Perhaps if the democrats did not demand that all infrastructure work only be done by "prevailing wage" union workers who cost 25% more than their non-union counterparts and then kickback most of their union dues to the democrats the GOP might agree to infrastructure spending. But they would be foolish to agree to anything that gives kickback money to the democrats.
Why not let states with Right-to-Work laws use only non-union workers for infrastructure repairs and restrict union workers to those states without such laws. Then compare the cost and quality of union vs non-union work?
3
A lack of analytical talent often characterizes Democratic thought. Ever considered that economic performance is a trailing consequence? That its performance improves during Democratic administrations because the causes for the improvement were implemented by the preceding Republican? (As, for example, in G.H.W. Bush - Clinton,) And that Democrats then proceed to muck it up (again), requiring the NEXT Republican administration to fix things (again), which becomes the reality Democratic "analysts" see when Democrats again are elected?
The president, as we've seen for the past few years under Mr. Obama's diktat, has great control over regulation, which is oppressive in the U.S. and that retards economic activity. A president can choose how intensively to enforce regulation, while a Republican Congress certainly can help immensely by doing away with Dodd-Frank or at least minimizing its immense damage.
Presidents can affect economic activity tremendously -- either to our benefit or to our damage.
The president, as we've seen for the past few years under Mr. Obama's diktat, has great control over regulation, which is oppressive in the U.S. and that retards economic activity. A president can choose how intensively to enforce regulation, while a Republican Congress certainly can help immensely by doing away with Dodd-Frank or at least minimizing its immense damage.
Presidents can affect economic activity tremendously -- either to our benefit or to our damage.
5
Our Congress could make it harder for corporations to outsource jobs to other countries, to import people to do the jobs Americans can do, to move their income to low/no tax havens. Congress has plenty of power to influence the economy. In fact Congress was the body that refused to fund jobs programs during the Great Recession (Depression for most of us and still going strong.).
The president can do certain things but is limited by the checks placed on the executive branch. Congress can do more depending upon who is in control. The fact that the GOP decided not to cooperate with President Obama meant that the average American was left adrift by the recession and the recovery. How much of a recovery is it when the 1% make out like bandits while the rest of us fall farther behind? Or is it that the rest of us, the moochers, don't count? This reader opts for don't count unless they need our votes. Then we count until they get re-elected and go back to DC to forget about us for another few years.
The president can do certain things but is limited by the checks placed on the executive branch. Congress can do more depending upon who is in control. The fact that the GOP decided not to cooperate with President Obama meant that the average American was left adrift by the recession and the recovery. How much of a recovery is it when the 1% make out like bandits while the rest of us fall farther behind? Or is it that the rest of us, the moochers, don't count? This reader opts for don't count unless they need our votes. Then we count until they get re-elected and go back to DC to forget about us for another few years.
5
I think this article underplays the fact of political polarization on the economy. With a Democrat in office, this polarization--surely due to continue under Clinton unless she can usher in a Dem majority in Congress, a doubtful prediction in this weird election--they will do to Clinton what they did to Obama: sit on her initiatives.
And yet, with a GOP president, particularly this strange nominee, he'd go for the jugular on his key bogemen: China, trade, tariffs. Krugman and others have told us the net effect of that on our economy.
The truth is, as the GOP loves to say, is that corporations and small business create jobs. But unless the GOP rolls back it's proven false trickle down proposals and unleashes the true impact of a healthy economy--workers with good paychecks and the desire to spend them--no president will succeed.
Because of globalization, companies aren't investing or expanding here in the US. They're doing fine with tax loopholes and foreign holdings. No proposal that favors big business profits with the goal of getting that money here and employing more workers can win given our business tax structure.
Yes, the economy is affected by far more than a President: Congress is key and it's still controlled by "trickle down" house members.
And yet, with a GOP president, particularly this strange nominee, he'd go for the jugular on his key bogemen: China, trade, tariffs. Krugman and others have told us the net effect of that on our economy.
The truth is, as the GOP loves to say, is that corporations and small business create jobs. But unless the GOP rolls back it's proven false trickle down proposals and unleashes the true impact of a healthy economy--workers with good paychecks and the desire to spend them--no president will succeed.
Because of globalization, companies aren't investing or expanding here in the US. They're doing fine with tax loopholes and foreign holdings. No proposal that favors big business profits with the goal of getting that money here and employing more workers can win given our business tax structure.
Yes, the economy is affected by far more than a President: Congress is key and it's still controlled by "trickle down" house members.
40
How about instead of a ram it down your throat Congress and President, such as brought us all the well-intended but poorly-planned ACA, we elect those who are willing to negotiate and compromise and do what used to be called politics.
That's what a democracy is....it's not a cabal of Democrats.
That's what a democracy is....it's not a cabal of Democrats.
1
You are simply incorrect. The Democrats controlled the Presidency/House and Senate for the first 1/2 of Obama term 1. As the author suggests, the President and Congress do little to ultimately affect the economy. Similarly, the Democrats have been promoting a populist theme that increasing taxes on the wealthy will drive improvements in the economy. Since we dissociated spend from taxes, this makes no sense. We basically spend $3T while only collecting $2T. Growth is only impinged on by increased taxes. Finally, the view that you can force people against basic economic issues has been shown to be false time and time again. US Jobs will recover with a properly skilled workforce and not by artificially implementing a min wage
2
I am an older IT worker.
Under Obama, there has been a dramatic increase in the number of jobs off-shored. Disney is not a one-off event, but the new normal. Your job is next.
Trump has raised this issue. Clinton is in the pockets of contributors foreign and domestic.
I'd have to have severe brain damage to vote for Clinton.
People tend to be blind to issues that don't directly affect them.
I understand that Clinton promises lots of freebies to those on public assistance and unions. But Socialism only works while other people have money to steal viz. Cuba and Venezuela.
Mr. Trump is correct again. We have had a total $747 Billion trade deficit with foreign countries. That's simply wealth leaving the country. Foreigners have been using that money to buy US energy resources, corporations, securities, real estate, debt etc.
Under Obama, there has been a dramatic increase in the number of jobs off-shored. Disney is not a one-off event, but the new normal. Your job is next.
Trump has raised this issue. Clinton is in the pockets of contributors foreign and domestic.
I'd have to have severe brain damage to vote for Clinton.
People tend to be blind to issues that don't directly affect them.
I understand that Clinton promises lots of freebies to those on public assistance and unions. But Socialism only works while other people have money to steal viz. Cuba and Venezuela.
Mr. Trump is correct again. We have had a total $747 Billion trade deficit with foreign countries. That's simply wealth leaving the country. Foreigners have been using that money to buy US energy resources, corporations, securities, real estate, debt etc.
1
I have personal experience with this phenomenon (that the person in office is responsible for the performance of the economy).
In the early '70's I served as a Peace Corps volunteer on a small south Pacific atoll. The only cash crop was copra (the meat of the coconut), which would be dried, packaged and exported for the manufacture of cosmetic oils.
The previous advisor was nearly lynched by the natives, because the coconut cooperative experienced a loss and the farmers had no money. During my tenure the cooperative thrived, and the people were flush with cash. I was feted at numerous island banquets. (As the guest of honor, I was offered the head of the sea bass. I told them I was unworthy, and would settle for a humble filet, with no eyes).
The reason for our two different experiences? When my predecessor left, the world price of copra was two cents per pound. While I was there it increased to 22 cents. I can assure you I had no influence over the world price of copra. But, being an American, I was happy to take the credit.
In the early '70's I served as a Peace Corps volunteer on a small south Pacific atoll. The only cash crop was copra (the meat of the coconut), which would be dried, packaged and exported for the manufacture of cosmetic oils.
The previous advisor was nearly lynched by the natives, because the coconut cooperative experienced a loss and the farmers had no money. During my tenure the cooperative thrived, and the people were flush with cash. I was feted at numerous island banquets. (As the guest of honor, I was offered the head of the sea bass. I told them I was unworthy, and would settle for a humble filet, with no eyes).
The reason for our two different experiences? When my predecessor left, the world price of copra was two cents per pound. While I was there it increased to 22 cents. I can assure you I had no influence over the world price of copra. But, being an American, I was happy to take the credit.
40
Not a single word on the effects of NAFTA and CAFTA and TTP and TTIP - all trade treaties that have or will have devasting effects on America's economy. And I mean the real economy that the 99% live under, not the twisted economy where the thieves in the 1% live.
53
Those things cannot really be discussed here. After all the NYT doesn't want to remind us that their chosen candidate,mHRC, supports them all and doesn't care what impact they have on the lower forms of life...aka the rest of us.
4
LEADERSHIP. baby. When a president has it, he inspires confidence and prosperity. He sets the table for feasts of income, jobs, advancements, investments and opportunities. When he fails to inspire confidence because his economic program is out of sync with the goals and traditions of American free enterprise, consumers, investors, employers and every commercial enterprise pick it up based on what he does--not what he claims. The result is a bitter helping of stagnation, misery, low GDP and hard times--exactly what Obama fostered.
In eight years of Obama (the left winger who ran as a deceptive moderate), American GDP was never above 3% for a quarter, NEVER. People learned his true stripes quickly after his first election. Lack of advancement, lack of opportunity, sinking family net worth, poor jobs with lousy wages. Yet all he ever did was blame, blame, blame Bush. Bush, Bush. He was always too dense to assess the situation and change course, blinded by rank ideology. Lacking pragmatism. Totally unaware of how to harness the exceptional power of free enterprise.
Cause and effect: the wrong direction, a failed economy, lack of effective LEADERSHIP! They all came together.
In eight years of Obama (the left winger who ran as a deceptive moderate), American GDP was never above 3% for a quarter, NEVER. People learned his true stripes quickly after his first election. Lack of advancement, lack of opportunity, sinking family net worth, poor jobs with lousy wages. Yet all he ever did was blame, blame, blame Bush. Bush, Bush. He was always too dense to assess the situation and change course, blinded by rank ideology. Lacking pragmatism. Totally unaware of how to harness the exceptional power of free enterprise.
Cause and effect: the wrong direction, a failed economy, lack of effective LEADERSHIP! They all came together.
10
This letter is so far from reality, it's laughable. Imagine our economy, not to mention how many wars we would be in, if John McCain had been elected. Obama has done very well in very difficult times. Look at the rest of the world and how their economy has been.
2
OH stuff it. Bush and Cheney "led" according to this view and thousands of young Americans paid the bill in money and lives and many more still do thanks to their fostering the creation of ISIS. Trickle down? Yeah, that's another baloney "Truth." Economies grow when individuals can pay for more than the minimum life sustainers.
Republicans love the 19th century when there were no minimum wages and no unions and few or no taxes. Ryan's latest effort to wipe away a century of hard fought for regulations on the poisoning of Americans etc. and the obscene profits gouged from slave wages is another look back to the future. Even when the economy does well, like DT, the Republicans take credit for it; and when it does poorly as after 8 years of Bush -- well, it's always the other team's fault. As a group I've never heard them apologize for or try to change what they've done that is clearly bad and they always take credit for something that wasn't their idea but on which they eventually gave ground. Anyone want to bet on the number of Republican House members who will vote for this sliver of gun regulation today? More than you'd think. Just remember: the Senate will vote it down. Another effort to bamboozle the voters who don't read and can't think.
Republicans love the 19th century when there were no minimum wages and no unions and few or no taxes. Ryan's latest effort to wipe away a century of hard fought for regulations on the poisoning of Americans etc. and the obscene profits gouged from slave wages is another look back to the future. Even when the economy does well, like DT, the Republicans take credit for it; and when it does poorly as after 8 years of Bush -- well, it's always the other team's fault. As a group I've never heard them apologize for or try to change what they've done that is clearly bad and they always take credit for something that wasn't their idea but on which they eventually gave ground. Anyone want to bet on the number of Republican House members who will vote for this sliver of gun regulation today? More than you'd think. Just remember: the Senate will vote it down. Another effort to bamboozle the voters who don't read and can't think.
1
Right. Congress, by design of the "founding fathers," holds the purse strings. The POTUS can send a budget to Capitol Hill, but the Congress can refuse to even discuss it (as happened recently). The House & Senate, even if they consider the POTUS' budget, can amend, negotiate, and add with abandon. Banking law is also the purview of Congress, which is why Sander's statements about dismantling the big banks were only lovely fantasies. The current House is trying to rid us of Dodd-Frank a banking management bill far short of "dismantling" banks.
Candidates must, though, put forth proposals for only in doing so do they communicate to voters the positions they might take, their economic outlooks, and their philosophy of government. Most voters are savvy enough to know that promises like growing the economy by 6% or creating jobs with a magic wand are simply empty. Some voters live in a fantasy bubble believing that their chosen candidate is really some kind of Sugar Daddy who can give them all the good things. Fortunately, those poor souls are outnumbered by the majority who are firmly planted in reality.
Candidates must, though, put forth proposals for only in doing so do they communicate to voters the positions they might take, their economic outlooks, and their philosophy of government. Most voters are savvy enough to know that promises like growing the economy by 6% or creating jobs with a magic wand are simply empty. Some voters live in a fantasy bubble believing that their chosen candidate is really some kind of Sugar Daddy who can give them all the good things. Fortunately, those poor souls are outnumbered by the majority who are firmly planted in reality.
18
If congress really holds the purse strings how is say planned parenthood still getting money?
1
Its necessary to remind people, even though it never seems to stick in most journalists' memories, or they have unsavory reasons to self-censor.
Presidents have less impact on the economy and jobs than most people imagine, but don't tell the media.
Presidents have less impact on the economy and jobs than most people imagine, but don't tell the media.
6
Only Government and aggregate demand can create jobs, which is very different from what everyone has been told by the politicians. The stimulus, which the economy was supposed to have had between 2009 and today, never actually happened! Monetary policy was represented to us as economic stimulus, but the bizarre regime of Quantitative Easing on the Zirp was anything, but economic stimulus.
QE combined with the zero interest rate policy was austerity by slight of hand! It punished the real economy, savers, and investors, but it inflated financial assets, giving the impression of recovery. New assets were not created.
There was a dearth of depository lending by banks for the purpose of growing new businesses. Instead, Corporations were encouraged by zero interest rates to buy back their own stocks, rather than to engage in capital investment, and no effort was made by the private sector or the government to create jobs by granting wage hikes or countercyclical deficit spending respectively.
Naturally, only the already rich got richer, and the rest of us were lucky to tread water. Under similar circumstances FDR birthed the New Deal, and regulated the banks to revivify the economy by creating a level playing field for investment. FDR gave us infrastructure investment, and hope!
Bill Clinton repealed FDR's banking legislation, crippling the New Deal, and Obama stood by and did nothing! While the Fed gave the rich QE, he remained mute in the bully pulpit. We have been had!
QE combined with the zero interest rate policy was austerity by slight of hand! It punished the real economy, savers, and investors, but it inflated financial assets, giving the impression of recovery. New assets were not created.
There was a dearth of depository lending by banks for the purpose of growing new businesses. Instead, Corporations were encouraged by zero interest rates to buy back their own stocks, rather than to engage in capital investment, and no effort was made by the private sector or the government to create jobs by granting wage hikes or countercyclical deficit spending respectively.
Naturally, only the already rich got richer, and the rest of us were lucky to tread water. Under similar circumstances FDR birthed the New Deal, and regulated the banks to revivify the economy by creating a level playing field for investment. FDR gave us infrastructure investment, and hope!
Bill Clinton repealed FDR's banking legislation, crippling the New Deal, and Obama stood by and did nothing! While the Fed gave the rich QE, he remained mute in the bully pulpit. We have been had!
7
You left out the most important part of the story. Congress. Congress controls spending and has the most direct impact on how well the economy performs for working main street Americans !!
1
I ask that the President do nothing for the economy, and instead leave productive individuals the freedom to run their lives and their businesses as they see fit - so long as they do not violate the rights of others to do the same. That is all that is required in a free society - no Social Justice Warriors Need Apple.
But Hillary and Bernie don't like this idea - they don't believe that you should be free to live your life in pursuit of your happiness. They are essentially traitors to the guiding principles that founded this nation.
Trump is equally bad, and so perhaps we should try something like we're trying with the Supreme Court: Let's have no POTUS.
But Hillary and Bernie don't like this idea - they don't believe that you should be free to live your life in pursuit of your happiness. They are essentially traitors to the guiding principles that founded this nation.
Trump is equally bad, and so perhaps we should try something like we're trying with the Supreme Court: Let's have no POTUS.
4
So without a government how would you ensure that corporations and those wonderful individuals you praise don't "violate the rights of others"?
1
Should have been: No Social Justice Warriors Need Apply.
1
Justice Holmes: Please point to where I want to be "without a government"? Do you see POTUS as the government? You are childishly mistaken if so.
How do I ensure corporations and productive individuals don't violate the rights of others? By obeying the Constitution, and laws passed by Congress - laws the current POTUS has felt free to ignore. If your "rights" are violated, you take the violators to court. But you have no "right" to health care or education - such would require forcing people to provide each, and that violates the rights of medical and educational professionals and all those forced to supply hard-earned wealth to deliver "healthcare" and "education" to anyone who demands it as their "right". The same is true for retirement funds, unemployment funds, and every other take-from-those-who-earn-it program. Only a thief wants what someone else earned.
How do I ensure corporations and productive individuals don't violate the rights of others? By obeying the Constitution, and laws passed by Congress - laws the current POTUS has felt free to ignore. If your "rights" are violated, you take the violators to court. But you have no "right" to health care or education - such would require forcing people to provide each, and that violates the rights of medical and educational professionals and all those forced to supply hard-earned wealth to deliver "healthcare" and "education" to anyone who demands it as their "right". The same is true for retirement funds, unemployment funds, and every other take-from-those-who-earn-it program. Only a thief wants what someone else earned.
1
President can do a lot for the economy. Firstly, restrict government spending on essentials and refrain from spending on escalating conflicts and regime changes. Eliminate the tax breaks that Bush had introduced. Ensure global trading practices that are fair to Americans. Invest in infrastructure that makes Western European and Scandinavian countries keep moving on public transportation. Not give away stimulus willy-nilly to every company that may on may not pay back the tax payers. Stop foreign aid to countries that shelter terrorists. Have a plan to eliminate the national debt in 8 years. It is the economy stupid that will decide who will be our next president. A candidate that will keep throwing away money ineffectively at problems should not become our next president.
25
Most of what you posted is impossible for a president without Congress' support. Line-item veto might be a solution,
1
However, a lot--if not all--of the things you mention *cannot* be done unilaterally by the president ... not even through executive order. That's the point of balance of power. Most of the items you list have to be passed or approved by Congress.
1
Why on earth should a President have a plan to eliminate the national debt in 8 years?
What are we going to use for transactions, Euros? Pounds?
The national debt is a blessing.
Unless voters come to understand basic macroeconomics, we're doomed.
What are we going to use for transactions, Euros? Pounds?
The national debt is a blessing.
Unless voters come to understand basic macroeconomics, we're doomed.
1
The economy, even more than most things, is a combination of ingredients. The policies pursued by the President and the administration have a substantial effect on the President's administration and a greater effect upon future Presidents and their administration. As Len Charlap points out, the money supply and trade balances are important and they are directly affected by the President's appointment of the Chairman of the Federal Reserve and by the terms of any trade treaties the President chooses to negotiate.
In the White House, on Main Street and Wall Street, luck play a part. Being lucky is even better than being smart. But being smart and lucky is a sure winner,.
In the White House, on Main Street and Wall Street, luck play a part. Being lucky is even better than being smart. But being smart and lucky is a sure winner,.
11
The USA economy is fueled by contracts and networking. Manufacturing, agriculture and resource extraction is much easier in third world countries so why bother forcing the production in the states?
Procuring a civil service job, a contract supplying the schools, senate and military with catsup, supplying law enforcement and fire & rescue with vehicles, helicopters, computers, cell phones networking with connected people that determine above circumstances is little lucky too. I am suggesting that anyone with Presidential connections is "lucky".
Procuring a civil service job, a contract supplying the schools, senate and military with catsup, supplying law enforcement and fire & rescue with vehicles, helicopters, computers, cell phones networking with connected people that determine above circumstances is little lucky too. I am suggesting that anyone with Presidential connections is "lucky".
The president does have a key role in determining economic policy. For example, whatever President Obama would call for would be precisely what the opposition party in the Congress would oppose. The president must be a pedagogue who can rally the country. Reagan altered economics by telling America to spend a little more time at home during the gas crisis.
Of course, the president has enormous persuasive powers with all matters military. War means jobs and jobs means tax revenue which means a stronger federal government.
Of course, the president has enormous persuasive powers with all matters military. War means jobs and jobs means tax revenue which means a stronger federal government.
2
Right. So remember this as trade pacts through fast track wreck working class lives. Remember this as the extra-legal activities of the IRS harass small business because they are paid off not to audit large corporate sponsors. Remember this as immigration policies replace Americans with illegals. Yep, none of these EXCLUSIVELY Oval Office powers has a thing to do with our economy. Right.
7
The trade pacts are a convenient whipping boy, as is the immigration policy. Neither of these things has anything to do with the fact that world collectively (we are part of the world) has a large over abundance of un skilled labor, and no political philosophy can change that fact. Further your indictment of the IRS is a nothing but a bad joke. In fact if the IRS had collected all of the taxes owed over the last fifty years, there would be no national debt today.
No offense here, folks....but the Executive Office holder of our government is only able to sign legislative bills into law or veto them. Yes, we all know he can issue Executive Orders, but there are many restrictions.
What he can do and should do is work closely with BOTH political parties and urge bipartisanship. He, and soon she, must be able to catalyze negotiations....you know, we'll give you this if you give us that.
But, like much of our electorate, politicians today are polarized and unyielding. Let me repeat one more time:BOTH sides and our President are responsible for this non-productive impasse.
And so are we!
What he can do and should do is work closely with BOTH political parties and urge bipartisanship. He, and soon she, must be able to catalyze negotiations....you know, we'll give you this if you give us that.
But, like much of our electorate, politicians today are polarized and unyielding. Let me repeat one more time:BOTH sides and our President are responsible for this non-productive impasse.
And so are we!
5
I disagree, when the president pursue trade policies that ship jobs overseas. In the election we have in Trump a person who has actually created jobs. Hillary Clinton has created nothing, absolutely nothing, in her life, except trouble. Thank you.
17
Unless you imagine the country in total isolation from the world, the trade pacts have little or nothing to do with sending jobs overseas. Further, unlike Trump, Clinton did not receive millions of dollars as a gift from her father and she has not gone bankrupt four times leaving creditors to swallow the loss. In fact you don't know anything about Trump's business acumen until you see five or so years of his tax returns, which he could reveal tomorrow, but has so far refused to make public. I wonder why?
1
Business owners historically make awful economic stewards as presidents. The record extends back to Herbert Hoover:
George W. Bush (oil, MLB) - Average monthly private sector job growth = MINUS 4,125; unemployment increased by 3.6%
George H.W. Bush (oil) - Average monthly private sector job growth = 31,458; unemployment increased by 1.9%
Jimmy Carter (small farmer) - Average monthly private sector job growth = 188,354; unemployment increased by 0.0%
Harry Truman (failed haberdasher) - Average monthly private sector job growth = 80,292; unemployment decreased by 1.4%
Herbert Hoover (worldwide mining operations) - We don't have BLS statistics from this era, but anecdotally the unemployment rate exceeded 25% on his watch
There is NOTHING to indicate that Donald Trump would alter this trend
George W. Bush (oil, MLB) - Average monthly private sector job growth = MINUS 4,125; unemployment increased by 3.6%
George H.W. Bush (oil) - Average monthly private sector job growth = 31,458; unemployment increased by 1.9%
Jimmy Carter (small farmer) - Average monthly private sector job growth = 188,354; unemployment increased by 0.0%
Harry Truman (failed haberdasher) - Average monthly private sector job growth = 80,292; unemployment decreased by 1.4%
Herbert Hoover (worldwide mining operations) - We don't have BLS statistics from this era, but anecdotally the unemployment rate exceeded 25% on his watch
There is NOTHING to indicate that Donald Trump would alter this trend
5
Trump creates jobs in China. He doesn't seem to pay people who work for him here, as just reported in USA Today.
3
It's funny to contrast the columns written about a media-favored President in the twilight of their Presidency with the stories written about less favored candidates campaigning for office.
Invariably, the twilight stories make the usual claims about the limits of the Presidency and all the many factors which limit the accomplishments of a President. The economy, foreign policy, domestic policy -- all of these areas have many variables beyond even the President's considerable power. And these statements, by and large, are true even if any given op-ed pieces is really structured as apologia.
Yet the stories about less favored candidates? They are written as if the less favored candidate can and will single-handedly alter the course of the nation (and to borrow a line from the movies, we will pray they do not alter it further). More favored candidate are invested with a kind of hope about how much better it will be when they gain power, righting all wrongs, smiting all enemies.
I just wish the media would make up its mind -- either Presidents are all-powerful forces, capable of accomplishing anything and molding the future to fit their vision, or they are limited -- by their own vision, politics, and myriad external forces beyond their control. Pick one, they can't be both.
Invariably, the twilight stories make the usual claims about the limits of the Presidency and all the many factors which limit the accomplishments of a President. The economy, foreign policy, domestic policy -- all of these areas have many variables beyond even the President's considerable power. And these statements, by and large, are true even if any given op-ed pieces is really structured as apologia.
Yet the stories about less favored candidates? They are written as if the less favored candidate can and will single-handedly alter the course of the nation (and to borrow a line from the movies, we will pray they do not alter it further). More favored candidate are invested with a kind of hope about how much better it will be when they gain power, righting all wrongs, smiting all enemies.
I just wish the media would make up its mind -- either Presidents are all-powerful forces, capable of accomplishing anything and molding the future to fit their vision, or they are limited -- by their own vision, politics, and myriad external forces beyond their control. Pick one, they can't be both.
11
The Democrats have crowed (especially in these comment sections) for at least 6 years that Obama had EVERYTHING to do about any job growth. I always cautioned that more Jamba Juice, I know it is your day off but if you are not at work in 15 minutes your fired type jobs are not the kind of jobs that are good for the economy and don't exactly make citizens happy. HRC will be more of the status quo along with as many giveaways aimed at the Democrat base as she can slide by Republican lawmakers. Trump at least will not be inextricably bound to Wall Street and the 1% as he has not already sold his soul to them as HRC has.
14
Please provide evidence that HRC is bound to the 1% and Wall St. any more than any other candidate. This is a tired meme oft repeated and not one person ever provides evidence beyond their personal surety it is true.
Good luck because you won't find it. It simply is not true.
Good luck because you won't find it. It simply is not true.
1
@mj----uhhh, do Wall Street payola speeches (hundreds of thousands of dollars for a speech, please) and donations to the Clinton foundation (foreign governments are you kidding me??) sound familiar to you? Vote for her if you must but don't delude yourself that she will be good for anything other than Washington business as usual.
@mj---not to mention her various superpacs, pull your head out of the sand.
Progressive dream world. High taxes and excessive regs are extremely detrimental to small business.
12
The real threat to small businesses is large businesses. Small towns around the country are littered with closed shops not because of high taxes or regulations, they're closed because Walmart, McDonald's, and Home Depot have taken their customers. These large companies actually benefit from manipulating big government to their advantage.
8
I guess you haven't heard that big business is working hard to enshrine regulations to crush small business. That wonderful strategy has nothing to do with progressives. It's all to do with lobbyists and big corproate power as laid out in the TTP and other proposed gifts to the all powerful multinationals and billionaires.
5
Except FDR and LBJ created social programs that have fror the most part allowed people to retire and age with dignity. The GOP would have us all save our own money to pay for retirement and medical care like only the 1% can do. And a Democratic administration has and can do more to regulate Wall Street so they don't blow up the world with their greed as almost happened in 2008. Which brings up the matter of a financial crisis like 2008, GOP leaders would have let the banks and auto companies go belly up. If that would have happened things would be very different today, and it would not be good. Just because the economy didn't collapse people don't realize how close we came to a disaster.
24
Roscoe, the global capitalist economy did collapse and was only revived by massive government intervention. Unfortunately, since that time we have seen the global economy underperforming.
4
It did? And of course the massive government intervention is actually the problem not the solution. See Japan for a great example.
and furthermore - as this illusion - that a President 'can do' for the economy is so widely shared - this illusion is also responsible for so many votes for Chicken Trump.
As some of my fellow Americans seem to tolerate such a disgusting and disgraceful character - just hoping that he might improve their economics!
As some of my fellow Americans seem to tolerate such a disgusting and disgraceful character - just hoping that he might improve their economics!
6
But if the economy does well, however briefly, a president always takes full credit. Just ask Bill Clinton.
12
Or Ronald Reagan.
4
Don't forget Bill Clinton had a showdown with the Gingrich congress over raising taxes. The government shut down, Clinton won and the budget was balanced.
the economy has done better under democrats. hmmm - must be just darn lucky. one wonders about such a simple notion.
let’s look at what government can or cannot do. think of the most recent 10 years. After the recession started, state began to shrink the public sector - so much so that the job recovery of the entire nation was effected. so while private sector jobs recovered, the public realm has not - at least no nation wide.
and state by state, Republican states refused to accept federal infrastructure funds for projects like high speed rail. Even in otherwise Democratic NJ, our governor dismantled 20 years of planning when he cancelled the ARC tunnel.
similarly, the ACA included grants to increase medicaid funds - routinely refused by Red states and accepted by Blues.
my guess is that if we looked at the last 50 years, we would see not luck but lots of small scale efforts at the state and federal level whenever Democrats had the reins of power- and a similar lack of effort by Republicans.
can’t prove it, but whenever a lucky streak goes on too long, maybe it ain’t luck.
let’s look at what government can or cannot do. think of the most recent 10 years. After the recession started, state began to shrink the public sector - so much so that the job recovery of the entire nation was effected. so while private sector jobs recovered, the public realm has not - at least no nation wide.
and state by state, Republican states refused to accept federal infrastructure funds for projects like high speed rail. Even in otherwise Democratic NJ, our governor dismantled 20 years of planning when he cancelled the ARC tunnel.
similarly, the ACA included grants to increase medicaid funds - routinely refused by Red states and accepted by Blues.
my guess is that if we looked at the last 50 years, we would see not luck but lots of small scale efforts at the state and federal level whenever Democrats had the reins of power- and a similar lack of effort by Republicans.
can’t prove it, but whenever a lucky streak goes on too long, maybe it ain’t luck.
19
Thanks for pointing out these truths, but few most likely will be paying attention. They prefer to believe that presidents have magic powers, when in fact they are quite helpless without a cooperative Congress.
History does show, however, despite your claims to the contrary, that massive government spending, on goods and services that otherwise would not be produced and consumed, will stimulate employment and spendable earned income. Those who doubt that were not here to witness what happened to the Great Depression with the start of WWII or with the effect of the national highway building program in the post WWII years. That extra earned income did stimulate demand for consumer goods and services. During WWII it did so at a pace that actually caused shortages of some goods for which production could not keep up with accelerating demand. Previously dormant productive capacity had been claimed for war goods production. Rationing was not entirely due to reduced wartime production of consumer goods. It was often due to accelerating demand by the formerly unemployed. Those who were there saw and remember.
History does show, however, despite your claims to the contrary, that massive government spending, on goods and services that otherwise would not be produced and consumed, will stimulate employment and spendable earned income. Those who doubt that were not here to witness what happened to the Great Depression with the start of WWII or with the effect of the national highway building program in the post WWII years. That extra earned income did stimulate demand for consumer goods and services. During WWII it did so at a pace that actually caused shortages of some goods for which production could not keep up with accelerating demand. Previously dormant productive capacity had been claimed for war goods production. Rationing was not entirely due to reduced wartime production of consumer goods. It was often due to accelerating demand by the formerly unemployed. Those who were there saw and remember.
9
Covert manages to completely overlook Obama's contribution to DC deadlock. His performance in pushing through the ACA without a single Republican vote while telling the Republican congressional leadership "Elections matter and I won" guaranteed that there would be all out war for the ensuing years of his Presidency. His victory also was a powerful influence in the discrediting of the mainline Republican leadership, facilitating the rise of the Tea Party. When the public realized over the next 2 years that the ACA was a mess and ousted the Democrats from control of the Senate it was a certainty that Republicans would seek to retaliate.
12
Obama put GOP members on the committee that drafted the law - modified it at their urging to get their votes and they still wouldn't vote for it. He tried reaching out and it only hurt him. It's documented that their only mission was to hurt him - country be damned.
21
In addition to not receiving any Republican votes, the ACA was actually opposed by a significant number of House Democrats. It wouldn't have passed the Senate, save for the "Cornhusker Kickback" and the "Louisiana Purchase." Now that it's falling apart - try getting PPO coverage in Texas - the Democrats want to go back and blame the people who knew it was a bad deal in the first place.
6
ACA was completely doomed when single payor option was dropped. Without the baseline floor of single payor option, ACA is an overpriced ill conceived Heritage Society scheme to subsidize Big Farm and Big Health Care. Doomed.
3
Hilary Clinton promised jobs for upstate that never materialized when she was senator so nothing will happen on a national level. She does not have the business savvy. As for extended family leave and other programs: enjoy your W2 as the deductions increase.
16
It's not mostly luck. Sure as in most things luck plays a part, but it's mainly about the supply of money to the private sector. He is right that the President doesn't control this, but to a large extent the gov, including the FED, does.
When the gov doesn't supply enough money, the economy turns bad. Our 6 depressions & 2008 show that. Before each of our 6 depressions we had a sustained period of federal surpluses which leeched money out of the private sector. From 1997 to 2008, except for a brief period in 2003, too small deficits & federal surpluses combined with a large trade deficit to cause money to flow out of the private sector.
Luck plays a part. If an asteroid hits NYC or if oil is embargoed, the economy will be adversely affected, but these events are not pervasive.
There are other factors. Federal deficit spending must be in the form of useful money. It is not useful to send it to the Rich because they do not use it in domestic commerce as much as the non rich. They leave it in their coffers or use it to speculate.
It is true that when we have surpluses & pay down the debt, some of the money comes back to the private sector, but half goes out of the country to foreign bond holders & the rest goes mainly to the Rich.
When we have persistent deficits as in 1946 to 1973 (21 years out of 27), and increase the debt (by 75%), & our trade balance is around zero, we have prosperity. Today with a large trade deficit, we need a large deficit, but it is shrinking.
When the gov doesn't supply enough money, the economy turns bad. Our 6 depressions & 2008 show that. Before each of our 6 depressions we had a sustained period of federal surpluses which leeched money out of the private sector. From 1997 to 2008, except for a brief period in 2003, too small deficits & federal surpluses combined with a large trade deficit to cause money to flow out of the private sector.
Luck plays a part. If an asteroid hits NYC or if oil is embargoed, the economy will be adversely affected, but these events are not pervasive.
There are other factors. Federal deficit spending must be in the form of useful money. It is not useful to send it to the Rich because they do not use it in domestic commerce as much as the non rich. They leave it in their coffers or use it to speculate.
It is true that when we have surpluses & pay down the debt, some of the money comes back to the private sector, but half goes out of the country to foreign bond holders & the rest goes mainly to the Rich.
When we have persistent deficits as in 1946 to 1973 (21 years out of 27), and increase the debt (by 75%), & our trade balance is around zero, we have prosperity. Today with a large trade deficit, we need a large deficit, but it is shrinking.
10
So Bill Clinton can't take credit for the strong economy during his terms?
3
That presidential policy is economically irrelevant strikes me as a little disingenuous.
That Clinton didn't raise spending and deficits allowed the Fed to keep interest rates low. That Reagan indulged in armaments Keynesianism and tax cuts counteracted the effects of high interest rates under Volcker, enabling the economy to bounce back from a deliberately induced recession. That Clinton and even more Bush Jr abandoned the financial regulatory helm contributed to the 2008 financial Armageddon.
So the interaction of the president with the Fed, the budget and regulatory policy can be rather decisive, even if president cannot dial up a growth rate at will.
That Clinton didn't raise spending and deficits allowed the Fed to keep interest rates low. That Reagan indulged in armaments Keynesianism and tax cuts counteracted the effects of high interest rates under Volcker, enabling the economy to bounce back from a deliberately induced recession. That Clinton and even more Bush Jr abandoned the financial regulatory helm contributed to the 2008 financial Armageddon.
So the interaction of the president with the Fed, the budget and regulatory policy can be rather decisive, even if president cannot dial up a growth rate at will.
5
This is a set up in advance to excuse further lack of action on behalf of American workers. HIliary Clinton is not telling the whole story. She was a planner of the TPP, which is the biggest corporate power grab in the history of the world. She is owned by the banks. Don't think for a minute that will help Americans. The money in the economy has gone steadily to the top percentage and there it remains, choking off the rest of us. It is the outcome of the financialization of our economy and the deregulation that caused this that her husband promoted. The president can do quite a bit, but Obama has also been in the pockets of the banks. They were well funded after the 2008 crash, but homeowners got a watered down program that was voluntary for the banks. Essentially only about a million homeowners were helped by the mortgagers. Many homeowner that applied were taken to the cleaners by the process and lost their homes instead of getting a reprieve. And since most people's wealth was tied to the vaule in their home, Americans lost their shirts. M3 has not been reported in years..in other words the inflation of food and housing goes unreported. So the facts are that American workers are much worse off than the government reports.
76
Carolyn, those are excellent points. Also, I listened to a Justice Department lawyer on NPR a couple of years ago who pointed out that Obama Justice Department has only prosecuted about 4 bankers for the 2008 crash, which was the biggest fraud in the history of the world.
3
"Tax policy can either exacerbate or reduce income inequality, for example, which has been found to slow economic growth." Which is it? Exacerbate or reduce income inequality BOTH slow economic growth? Or only the latter slows economic growth? This is an important assertion that is unclear from the phrasing.
1
You are completely wrong about tax policy. If an increase in taxes on high wage earners is used to rebuild and upgrade our crumbling infrastructure, both the economy and income inequality will improve. In times of low inflation it is the demand side of the equation (not the supply side) that needs attention.
3
this same pattern the USA economy doing better under democratic presidents does not just extend to ww2, but all the way to 1901. To think this is just luck is to defy logic. The returns are buy a huge statistical amount. To my republican friends , why don't Conservative principals of tax cuts for the rich, small government, and deregulation result in superior economic growth, why the failure of republican policies????
36
If you lived in CT instead of Thailand, you would have seen an economically thriving state that focused on low personal taxes and local control move to a state controlled economy with increased taxes and regulations to become one of the most overburdened, least desirable, failing economies in the entire country.
3
This is so clearly a Democrat sap piece. One could go through Mr. Covert's points and easily dispute each; but even that wouldn't properly indicate the failures of the Obama administration to right the economy. Start with the fact that this may be the most anti-business administration ever. The "stimulus" program, for example, was nothing more than an effort to help teachers retain their jobs. Help businesses take risk and invest? Nothing.
The president has been decidedly left-wing all the way. Early on, all his political weight was thrown behind the selling of Obamacare rather than focusing on the economy. Now, the nation is experiencing the faiure of the president's "greatest achievement" with health care agencies collapsing everywhere. Obamacare only survives through the expansion of Medicaid - which could have been accomplished without the job killing AFC statutes dumped on industry.
Mr. Covert claims an president doesn't have much influence over economic growth. This is an excuse; I would challenge him to list any pro-growth, business oriented programs initiated by Obama not driven by Democrat political expediency - such as the GM (Government Motors) - save the UAW - bailout. Any that would make business executives take the plunge and invest with confidence that the government would not impede, if not support. Any.
The president has been decidedly left-wing all the way. Early on, all his political weight was thrown behind the selling of Obamacare rather than focusing on the economy. Now, the nation is experiencing the faiure of the president's "greatest achievement" with health care agencies collapsing everywhere. Obamacare only survives through the expansion of Medicaid - which could have been accomplished without the job killing AFC statutes dumped on industry.
Mr. Covert claims an president doesn't have much influence over economic growth. This is an excuse; I would challenge him to list any pro-growth, business oriented programs initiated by Obama not driven by Democrat political expediency - such as the GM (Government Motors) - save the UAW - bailout. Any that would make business executives take the plunge and invest with confidence that the government would not impede, if not support. Any.
9
Perhaps the greatest failure of American civics is that so few people know how our government works. That is why they flock to elect a President, but don't bother to vote in midterm elections, and if they do know they have a state government, they can't name their legislators, and they don't know what they are doing.
Most of the economic policy that affects us is at the level, and at the Congressional level. Check out ALEC's business agenda.
But some things can be done and be driven by the White House. They can look at international mergers, like In-Bev and Miller; they can look at selling off assets to foreign companies; they can look at trade, dumping; they can look at policies that favor American jobs.
They could drive the effort remove healthcare from businesses, and make it a non-factor in the cost of American labor. They could re-structure payroll taxes, and make American labor cheaper. They could subsidize industries that are needed for national defense to keep some of that capacity here: vaccine, antibiotic and medication manufacture, communications, computing, energy distribution.... there is a list of things we should have domestic capacity to build.
The President can't do everything on her own.... but the White House should be a bully pulpit to get people to look at those other elections.
Most of the economic policy that affects us is at the level, and at the Congressional level. Check out ALEC's business agenda.
But some things can be done and be driven by the White House. They can look at international mergers, like In-Bev and Miller; they can look at selling off assets to foreign companies; they can look at trade, dumping; they can look at policies that favor American jobs.
They could drive the effort remove healthcare from businesses, and make it a non-factor in the cost of American labor. They could re-structure payroll taxes, and make American labor cheaper. They could subsidize industries that are needed for national defense to keep some of that capacity here: vaccine, antibiotic and medication manufacture, communications, computing, energy distribution.... there is a list of things we should have domestic capacity to build.
The President can't do everything on her own.... but the White House should be a bully pulpit to get people to look at those other elections.
46
The right rants about too much government intervention in their lives but they want the government to fix their paychecks. Most people who complain about big government actually have a problem with big business.
29
Left out of this piece is the fact the President appoints cabinet members who shape policy. Think Timmy Geithner, who as Sec. of Treasury paved the way for the Wall Street bailouts, while leaving tens of millions foreclosed upon. Think Eric Holder, white shoes corporate lawyer turned chief law enforcer who chose not to indict a single financier for tanking the economy. They all received get out of jail cards by working for companies who paid hefty fines.
The public focuses on laws, but regulations and political appointments set the agenda. And that is why special interests and lobbyists donate millions. To influence policy. There is much a President does.
Oh--did I mention lying us into a war in the Middle East in which we are still fighting? Yes--that is a huge affect on our economy.
The public focuses on laws, but regulations and political appointments set the agenda. And that is why special interests and lobbyists donate millions. To influence policy. There is much a President does.
Oh--did I mention lying us into a war in the Middle East in which we are still fighting? Yes--that is a huge affect on our economy.
113
Lying us into two wars...that was the Bush administration. Cheney, Rumsfeld, Rice, Yoo, Greenspan. Bush setup Wall St. bailouts and got his Saudi friends out of the US on 9/12/01.
4
The data are not even close - across the entire 70 year span of our history since the end of WWII, in every single instance, the economy was better under a Dem POTUS than under GOP'ers - with GDP under Dems averaging 70%+ higher at 4.35% to Repubs 2.54%:
http://www.salon.com/2015/12/28/these_5_charts_prove_that_the_economy_do...
And this has occurred without fail across 7 decades, despite GOP'ers since 1947 inheriting an average growth rate of 4.1% whilst Dems inherited an average growth rate of just 1.8%:
https://www.washingtonpost.com/news/wonk/wp/2013/12/02/the-u-s-economy-d...
Most recently, we need only look at GOP'ers deliberately destroying the 4 years of Clinton budget surpluses they were handed in Jan. 2001, which GOP'ers turned into the most epic financial collapse in 80 years by 2009, to illustrate the differences.
Vote Democratic to keep the economy growing :)
http://www.salon.com/2015/12/28/these_5_charts_prove_that_the_economy_do...
And this has occurred without fail across 7 decades, despite GOP'ers since 1947 inheriting an average growth rate of 4.1% whilst Dems inherited an average growth rate of just 1.8%:
https://www.washingtonpost.com/news/wonk/wp/2013/12/02/the-u-s-economy-d...
Most recently, we need only look at GOP'ers deliberately destroying the 4 years of Clinton budget surpluses they were handed in Jan. 2001, which GOP'ers turned into the most epic financial collapse in 80 years by 2009, to illustrate the differences.
Vote Democratic to keep the economy growing :)
161
It's probably greater than 70 years, if we look at the Democrats going back to Andrew Jackson as favoring expanding the money supply and easing credit then we are able to see why the Democrats have often been associated with economic growth.
However times have changed and US economic policy shifted to a Harvest Model from the prior Growth Model used for overy 150 years. The US economy has been harvested to subsidize growth in the developing world over the past 30 years and this has resulted in stagnation of median wage income levels.
However times have changed and US economic policy shifted to a Harvest Model from the prior Growth Model used for overy 150 years. The US economy has been harvested to subsidize growth in the developing world over the past 30 years and this has resulted in stagnation of median wage income levels.
1
kenneth - Yep, it is probably more than 70 years, which is why GOP'ers switched to trying to appeal to ' wedge ' issues hoping to counter Dems' overwhelmingly better economic track record. The GOP'er base would go along as long as the jobs being lost were not their own, and as long as they could afford to educate their kids into a better future.
Vulturedom in the GOP donor class has vaporized that carefully tended mirage.
Vulturedom in the GOP donor class has vaporized that carefully tended mirage.
7
It is a mistake to assume that more infrastructure spending automatically creates jobs. It depends in the spending.
A lot of times it is in bridges to nowhere or projects that take years to complete so the net marginal effect is not that great; sure completing the transcontinental railroad or the interstate highway system had great payoffs but an incremental increase of a few more roads and bridges isn't going to increase gdp very much.
Plus it has to be offset with the greater debt burden. At best it may keep future gdp from falling substantially. Think of it like overdue maintenance, not as a gdp driver.
PS. We are already in a trade war with China. The truth is we are losing. Besides NAFTA, allowing China to join the WTO ranks as one of the greatest blunders in American Policy.
A lot of times it is in bridges to nowhere or projects that take years to complete so the net marginal effect is not that great; sure completing the transcontinental railroad or the interstate highway system had great payoffs but an incremental increase of a few more roads and bridges isn't going to increase gdp very much.
Plus it has to be offset with the greater debt burden. At best it may keep future gdp from falling substantially. Think of it like overdue maintenance, not as a gdp driver.
PS. We are already in a trade war with China. The truth is we are losing. Besides NAFTA, allowing China to join the WTO ranks as one of the greatest blunders in American Policy.
8
What is this debt burden thing? After accounting for the interest returned by the FED, our current debt service is well under 1% of GDP? Tell me Ken, when did the debt EVER adversely affect our economy?
6
Giving China most-favored-nation status may not be anyone's favorite historic moment but we must consider the question: are our affairs with China - all the trade and currency games, all the pollution, all the human rights discussions, all the military posturing and provocation, and all the rest including with regard to North Korea - are those affairs better or worse for the MFN status? I don't know but I suspect China is and has always been more dangerous than we appreciate in the western public dialogue; tying their economic engine to our markets may well have dampen an aggressive and repressive politic and helped modernize a dangerously backward world view. Yes - with costs. And yes, many of their behaviors continue to be problematic. But is MFN status the problem, part of a soultion, or irrelevant?
2
Length Chapman, excess debt load is always a drag on economic growth. Currently our debt service is about $400 billion per year, which makes it one of our largest budget commitments. If interest rates rise much above our currently low low levels, then our $19 trillion on debt will not be servicable; nor will we be able to incur more debt to finance necessary capital projects.
1
Yes, politicians love to take credit for job growth, and the opposition will throw blame at job losses.
The truth is all that government can do is set tax rates, and spend taxpayer dollars... Government csn not create one single job, only rediistribute or allocate taxed wages of those already employed.
Liberal governments tend to believe they can spend taxpayer money better than taxpayers themselves, and reject the argument there is any harm in deficit spending....In principle, conservatives believe the opposite.
There is no leadership displayed with massive deficit spending... But no outcry from taxpayers either, who do not have taxes increased to pay for growth in government spending.
Half of American federal tax revenues are spent on the military... That is a choice. Putting roughly twenty years of middle east war spending on the 'taxpayer credit card', or national debt, is another choice.
No society in the history of the world has ever spent half their wealth on military adventures that had no intention of conquering new land or reaping rewards for the nation, for it is not sustainable, and nothing gained for the cost. Infrastructure at home is underfunded and left to decay. Investments that could be made in American citizens and their standard of living are not made... All recent American government choices.
The truth is all that government can do is set tax rates, and spend taxpayer dollars... Government csn not create one single job, only rediistribute or allocate taxed wages of those already employed.
Liberal governments tend to believe they can spend taxpayer money better than taxpayers themselves, and reject the argument there is any harm in deficit spending....In principle, conservatives believe the opposite.
There is no leadership displayed with massive deficit spending... But no outcry from taxpayers either, who do not have taxes increased to pay for growth in government spending.
Half of American federal tax revenues are spent on the military... That is a choice. Putting roughly twenty years of middle east war spending on the 'taxpayer credit card', or national debt, is another choice.
No society in the history of the world has ever spent half their wealth on military adventures that had no intention of conquering new land or reaping rewards for the nation, for it is not sustainable, and nothing gained for the cost. Infrastructure at home is underfunded and left to decay. Investments that could be made in American citizens and their standard of living are not made... All recent American government choices.
62
1. We need money to conduct commerce.
2, As the economy grows we need more money.
3. Money can come to the private sector from 2 places--the federal government or from a favorable trade balance.
4. Money comes from the federal government in 2 ways--spending (fiscal) or from the FED to the banks (monetary).
5, The FED has sent a lot of money to the banks with little effect. The money has sat in the vaults of the banks or been lent to the Rich who use it to speculate. This money has low velocity--it doesn't change hands in domestic commerce frequently.
6. Net federal spending is measured by the federal deficit, i.e. the deficit measures the net flow of money to people, businesses (not banks) and state & local govs.
7. Thus in order to get the new money the private sector needs, the federal deficit must be larger than the trade deficit. We have a large trade deficit. We need a large deficit.
8. If the above is correct, periods of negative deficits, surpluses, which pay down the federal debt should lead to a bad economy. They have. There have been 6 such periods of longer than 3 years in US history, They have ALL ended in a real gut wrenching depression. In fact this accounts for all of our depressions.
9. On the other hand, in 1946 we had the largest debt ratio in our history. The public debt ratio was 47% larger than today. We had deficits for 21 of the next 27 years. We increased the debt 75%.
And we had Great Prosperity.
2, As the economy grows we need more money.
3. Money can come to the private sector from 2 places--the federal government or from a favorable trade balance.
4. Money comes from the federal government in 2 ways--spending (fiscal) or from the FED to the banks (monetary).
5, The FED has sent a lot of money to the banks with little effect. The money has sat in the vaults of the banks or been lent to the Rich who use it to speculate. This money has low velocity--it doesn't change hands in domestic commerce frequently.
6. Net federal spending is measured by the federal deficit, i.e. the deficit measures the net flow of money to people, businesses (not banks) and state & local govs.
7. Thus in order to get the new money the private sector needs, the federal deficit must be larger than the trade deficit. We have a large trade deficit. We need a large deficit.
8. If the above is correct, periods of negative deficits, surpluses, which pay down the federal debt should lead to a bad economy. They have. There have been 6 such periods of longer than 3 years in US history, They have ALL ended in a real gut wrenching depression. In fact this accounts for all of our depressions.
9. On the other hand, in 1946 we had the largest debt ratio in our history. The public debt ratio was 47% larger than today. We had deficits for 21 of the next 27 years. We increased the debt 75%.
And we had Great Prosperity.
7
"Government csn not create one single job.."
This is nonsense. Teachers, construction workers, police officers ... these are all jobs. That the money to pay their salary comes from taxes doesn't change this.
This is nonsense. Teachers, construction workers, police officers ... these are all jobs. That the money to pay their salary comes from taxes doesn't change this.
26
Excellent points.
1
These are economists--and that's how they make their subject a dismal science. So contradictory arguments, so unsupported conclusions, and so futile are exercises. Presidents of the United States have both formal and informal powers, both direct and indirect powers, both implicit and explicit powers, and sometimes sheer personality power that make big difference. Remember Ronald Reagan--Tear Down the Wall--not a single bullet fired, a mighty wall of Cold War came down immediately. Presidents do make a big difference to the economy. Remember Hoover before Depression? Remember FDR during the Great Depression? The difference is earth shattering. That's presidents matter, even for economy, dear economist.
8
But there was also a huge difference in the composition of Congress between the Hoover years and the FDR years.
3
The point is not that the president can enact fiscal policy without a partner in Congress. That's old news. The point is she must explain and detail why fiscal policy has failed working Americans and why it is critical to improve an economy stuck with low growth, low wage growth low inflation, and low interest rates.
These things are of theme: slack demand and a sagging global economy. Monetary policy is constrained by very low, zlb, or even negative interest rates in some countries. Fiscal policy is the solution. We are looking and persistent secular stagnation.
The president needs to explain this to the electorate. The president may not be able to legislate, but she can, in non-condescending ways, educate.
These things are of theme: slack demand and a sagging global economy. Monetary policy is constrained by very low, zlb, or even negative interest rates in some countries. Fiscal policy is the solution. We are looking and persistent secular stagnation.
The president needs to explain this to the electorate. The president may not be able to legislate, but she can, in non-condescending ways, educate.
8
Thank you - and for years we tried to tell - but as US economists love to compliment 'their Presidents' for 'good' economics and hate to blame 'the Job Creators' for the misery -(in order not to make them mad) - better late than never - for: Ask Not What the President Can Do for the Economy'.
3
"Hillary Clinton, the presumptive Democratic nominee, is far more cautious about what she promises..."
Therein lies her problem now that she she has won her primary. The promises she was willing to make were wholly insufficient for about 45% of Democratic voters, among which were millenials and voters who fell out of the middle class as a result of the Great Recession. Two weeks after California, Clinton has yet to make any overtures to unify a fractured party, and there is open talk of creating a new third party for progressives after the November election.
Therein, also, lies Clinton's problem. Working class voters may well overlook Donald Trump's deficiencies in favor of the promise of the midas touch of a successful businessman and the expertise he promises to bring. To understand this, one must take a deep look at what has happened to the middle class: http://wp.me/p2KJ3H-2hl and http://wp.me/p2KJ3H-2f9
Of course, Trump is not really a successful businessman, but after decades of fame on the TV circuit, that is not the image he projects. Without the record one expects of a politician, Trump does have some advantage over his opponent in an election in which both candidates have terrible negatives when it comes to credibility. Recent polls show that neither candidates' voters believe their campaign promises. With three months of bad jobs reports and the risk of another downturn, who will voters believe more? http://wp.me/p2KJ3H-2hl
What will anxious voters do?
Therein lies her problem now that she she has won her primary. The promises she was willing to make were wholly insufficient for about 45% of Democratic voters, among which were millenials and voters who fell out of the middle class as a result of the Great Recession. Two weeks after California, Clinton has yet to make any overtures to unify a fractured party, and there is open talk of creating a new third party for progressives after the November election.
Therein, also, lies Clinton's problem. Working class voters may well overlook Donald Trump's deficiencies in favor of the promise of the midas touch of a successful businessman and the expertise he promises to bring. To understand this, one must take a deep look at what has happened to the middle class: http://wp.me/p2KJ3H-2hl and http://wp.me/p2KJ3H-2f9
Of course, Trump is not really a successful businessman, but after decades of fame on the TV circuit, that is not the image he projects. Without the record one expects of a politician, Trump does have some advantage over his opponent in an election in which both candidates have terrible negatives when it comes to credibility. Recent polls show that neither candidates' voters believe their campaign promises. With three months of bad jobs reports and the risk of another downturn, who will voters believe more? http://wp.me/p2KJ3H-2hl
What will anxious voters do?
23
The concensus is that Trump's campaign is in free fall as party leaders actively dismiss him while others pretend he doesn't exist. He's alienated and insulted nearly every voting bloc except white working class male voters over 50. He currently has no path to the presidency and may not even be the nominee. Only the unpatriotic or sclerotic would turn to Trump, a person ushering in fascism to America. And that percentage of D voters will be be near zero. Sour grapes taste bitter but they usually do not cause blindness.
6