I recently stumbled across an academic paper that is stunningly counterintuitive. One of the most widely held beliefs in America—one held by virtually all Republicans and even a fair amount of Democrats—is that the Republican Party is the party better capable of dealing with the economy. This, apparently, is not only false, it’s absolutely, 100 percent false.
“Presidents and the Economy: A Forensic Investigation” by Alan Blinder and Mark Watson of Princeton University deals a death blow to the “common wisdom” that Republicans are better for the economy. Their findings show that, since the late 1940s, the economy has performed better—with more private-sector job creation and higher stock market returns—under Democratic presidents than under Republicans. In fact, over that period, it has grown at a rate almost two percentage points higher under Democrat presidents.
According to the study’s authors, “Specifically, the U.S. economy performs much better when a Democrat is president than when a Republican is. The superiority of economic performance under Democrats rather than Republicans is nearly ubiquitous; it holds almost regardless of how you define success. By many measures, the performance gap is startlingly large—so large, in fact, that it strains credulity.”
The exhaustive study shows that, in every single case since 1949, the U.S. economy grew more and performed better under a Democratic president than it had under his Republican predecessor or than it would under his Republican successor. Every time; no exceptions. And the differences are often not even close.
Under Truman, the U.S. Gross Domestic Product (GDP) grew at a robust rate of nearly 7 percent per year. Truman’s successor, Republican Dwight Eisenhower, saw the rate of GDP growth plunge to under 3 percent his first term and down near 2 percent his second term.
In John F. Kennedy’s only term (finished off by Lyndon Johnson after Kennedy’s assassination), the economy takes off again and was growing at nearly 6 percent per year. In Johnson’s only elected term, it grew at a rate of 5 percent. As soon as Richard Nixon took office, it dropped back down to around 3 percent, and in the four years of Nixon/Gerald Ford, it was under 2 percent.
Here’s where it gets really interesting. You know how there’s almost universal agreement among Republicans that Jimmy Carter was the worst president of the last 60 years? Well, the U.S. economy grew at almost twice the rate under Carter than it had under Nixon/Ford. More importantly, the economy performed better under Carter than it would in Ronald Reagan’s first term or in Ronald Reagan’s entire eight years in office, combined. (Reagan’s second term saw a slightly higher growth in GDP than had happened under Carter.)
It dropped down under 2 percent when the first George Bush was in office, but popped back up to just under 4 percent in Bill Clinton’s first term and over 4 percent in his second term. The second George Bush saw the GDP growth dip to under 3 percent his first term and under 1 percent the second term. That .5 percent increase in Bush’s second term is the smallest for any president since Herbert Hoover presided over the start of the Great Depression.
Taking over in the depths of the Great Recession (and with Republicans intent on blocking his every move), Barack Obama saw the GDP growth edge back up over 2 percent in his first term and may be looking at that figure doubling by the time his second term is over.
The authors meticulously looked at every possible reason to explain away this glaring discrepancy, but found none. The party in control of Congress didn’t matter and neither did the age or experience of the president. While we heard nothing but the gnashing of teeth over budget deficits in Obama’s first four years, the study concludes that the difference between deficits under Republicans and Democrats is statistically insignificant.
Tax policies don’t offer any clues. In the past nearly half-century, the two strongest periods of growth came after Ronald Reagan raised taxes on everybody and Bill Clinton raised taxes on the rich. Some might assume that Democrats simply inherited stronger economies (or economies that were poised to take off), but the truth is that, in every case, Dems have taken over when the economy was in worse-than-usual shape.
During the election of 2012, former President Bill Clinton noted, “Since 1961, the Republicans have held the White House 28 years and Democrats 24 years. In those 52 years, the private economy has produced 66 million private-sector jobs. (The score?) Republicans, 24 million; Democrats, 42 million.” (Fox News tried to fact-check the crap out of that one, but, disappointingly for them, found it to be true.)
In the past two years, Obama has added another five million to that total. With the Republicans still holding the edge in years in office, the Democrats hold a 47-24 margin in millions of jobs created during their tenure, almost exactly double.
There is, of course, a chance that this is a completely random phenomenon. However, after 16 presidential terms and eight changes of possession, so to speak, the odds of that being the case would be one in hundreds, if not thousands.
I don’t expect anything to change. The Republicans will ignore the study because it’s sorta scientific, while the Democrats will be too disorganized to tout it. But now I know, and so do you.