Debunking Bartels on the Democrats

Larry Bartels has an oft-cited that Democratic Presidents are better for the economy.  Andrew Gelman has a nice presentation of the skeptical take of Jim Campbell.  For instance:

Jim Campbell recently wrote an article, to appear this week in The Forum (the link should become active once the issue is officially published) claiming that Bartels is all wrong–or, more precisely, that Bartels’s finding of systematic differences in performance between Democratic and Republican presidents is not robust and goes away when you control the economic performance leading in to a president’s term.

Here’s Campbell:

Previous estimates did not properly take into account the lagged effects of the economy. Once lagged economic effects are taken into account, party differences in economic performance are shown to be the effects of economic conditions inherited from the previous president and not the consequence of real policy differences. Specifically, the economy was in recession when Republican presidents became responsible for the economy in each of the four post-1948 transitions from Democratic to Republican presidents. This was not the case for the transitions from Republicans to Democrats. When economic conditions leading into a year are taken into account, there are no presidential party differences with respect to growth, unemployment, or income inequality.

File under “Was never convincing in the first place.”  Read the comments to the post also.

Comments

Right - never convincing at all. There just isn't the sample size to draw any conclusions about the economic performance of different parties. Since 1960 or since 1930 (going before that you have very very different party behaviour), there just haven't been enough presidents to know which ones are outliers and which represent the "real" trend.

Which is too bad because "which party is better for the economy" would be a great thing to know, even though it is not the only important thing about a political party.

Too small of a data set and is it Presidents or congresses.

Campbell is flat out wrong. It is two out of four, although the two are the most recent two, Reagan and Bush, Jr. The economy was not in recession in either 1952 nor 1968 (nor 1951 or 1967, if you prefer). Why do we have people handing out this sort of drivel, and why do intelligent people who should know better repeat it?

Barkley, might I suggest that you're failing to understand his point. Even if you do, though, you might not agree with it. He's arguing that President's aren't responsible until a year in the future. You're looking at it in the opposite direction.

The economy *was* in recession in 1953 and 1969. Campbell is arguing that who was President in most of 1952 and 1968 (and the previous four years) would be "more responsible" for those conditions than the person just elected.

You can disagree with his argument that it's a lagging indicator, but he's not "flat out wrong," and you should no better than to accuse people of "handing out this sort of drivel" when you yourself are making the embarrassing mistake.

OK, John, you are right that I jumped the gun and looked at the wrong years. But as Hulsey points out, even looking a second time, Campbell is still wrong, or only right by some very odd stretching. I might note that the bad recession that started in July, 1981, although it is early in Reagan's term, is at least partly his doing, atlhough conditions then were terrible, and he was able to convince most of the public that it was all a holdover from Carter. In any case, it started after the Fed massively tightened policy in combination with Reagan's tax cuts passing, and interest rates shot through the roof. What brought this one to an end was the relaxation of Fed policy in August, 1982, after the Mexicans threatened to default, and Reagan agreed to cancel the final round of his tax cuts. The stock market took off that month, but it was another three months before the GDP turned around, giving Reagan his 1983 8% growth rate that could be labeled "Morning in America."

In any case, while Campbell may have weakened the case for Dems being better, he most certainly has not made the case that the GOPs were better, and after looking closely the record probably still has the Dems slightly better, atlhough we know that this whole biz of blaming presidents for the specific ups and downs of the economy is a silly game, which may be what Campbell really wanted to prove.

>>he most certainly has not made the case that the GOPs were better

He was explicitly not making that case; from the linked paper:
"When economic conditions leading into a year are taken into account, there are no presidential party differences with respect to growth, unemployment, or income inequality."

Yo, Barkely:

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I question the following

"Specifically, the economy was in recession when Republican presidents became responsible for the economy in each of the four post-1948 transitions from Democratic to Republican presidents."

What definition was he using for "recession." According to Wikipedia (http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States), the "official" determiner of of recessions if the independent National Bureau of Economic Research (NBER). They list the following post-1948 recessions (I've also included the presidential party changes and an arbitrary year later, when the president becomes "responsible"):

Nov48-Oct49 (D -> R Jan49)
(R responsible Jan50)
Jul53-May54
Aug57-Apr58
Apr60-Feb61 (R -> D Jan 61)
(D responsible Jan 62)
(D -> R Jan 69)
Dec69-Nov70 (R responsible Jan 70)
Nov73-Mar75
(R -> D Jan 77)
(D responsible Jan 78)
Jan80-Jul80
(D -> R, Jan 81)
Jul81-Nov82 (R Responsible Jan 82)
Jul90-Mar91
(R -> D Jan 92)
(D responsible Jan 93)
(D -> R Jan 01)
Mar01-Nov01
(R responsible Jan 02)
Dec07-Jun09 (R -> D Jan 08) (D responsible Jan 09)

So 2 out of four times the R was "responsible", while for the D it was one out of four. I don't see how his claim is correct, unless he is massaging the definition of "recession" away from the consensus.

That said, I agree with the concern that there isn't enough data to support Bartels conclusion.

A republican was not elected president in 1948.

Weichi, that is what the Chicago Tribune reported...

Maybe Jim is from the Windy City...

Oops. Brain cramp.

So that changes the R responsible to Jan 54, putting in the time frame, making it 3 out of 4. That still doesn't make the original claim correct.

Also, using one year as the standard for the new president becoming "responsible" for the economy seems to be arbitrary. The Dec '69 recession started 11 months after Nixon took office. Is that really LBJ's recession?

Maybe Harry Truman was a secret Republican?

Yeah, I got nothin'.

As I said, brain cramp. That's what happens when I refer to Chicago Tribune archives.

Err, the data you've presented demonstrate that his assertion of the facts is correct. (As noted, Truman beat Dewey in '48, Eisenhower won in '52.) We can disagree about the lagging effects hypothesis, though.

By your data, indeed, the four mentioned Republicans started off with a recession that they were "not responsible for" under his hypothesis.
Republicans:
Eisenhower: Won in 1952, recession was Jul53-May54, starting less than a year into his term, and by Campbell's assertion not his fault.
Nixon: Won in 1968, recession was Dec69-Nov70, starting less than a year into his term (more than a year after election)
Reagan: Won in 1980, recession was Jan80-Jul80 and Jul81-Nov82, again both shortly before he won and then less than a year after he took office.
GWB: Won in 2000, recession was Mar01-Nov01, again less than a year after taking office.

Of the Democrats, only Obama took office during a just starting recession, and in his case it was bad enough and had started early enough that GWB is blamed by the public. The Republicans all share the trait that recessions started very shortly after they took office.

Campbell's claim is that the President, even if you believe he has a strong effect on the economy, could not possibly have had an effect on the economy by that point (something that Obama's defenders should agree on), so in each case the Republican was inheriting a poor economy, which obviously affects the statistics.

You can counterclaim that Republicans are so bad for the economy that their mere election causes the economy to stall. However, I think that in many of those cases you can find (post facto) evidence of an incipient slowdown before it actually occurred. Certainly the stock market had a poor summer and fall 2000 before the downturn actually happened.

Bah.

At best, the argument is that Democrats are no worse for the economy than Republicans.

Arguably, the best person ever for the American economy was a (can I say it?) fascist. Henry Ford's pay scale started the rise of the middle class that has fueled our country.

Henry Ford essentially took money out of his pocket and gave it to workers on the theory that they would be more satisfied with their jobs AND they would spur the economy.

That is what we need now. A system where the middle class standard of living continually rises. Perhaps "a rising tide raises all boats" is correct, but we have been focusing to narrowly. Instead of raising the level of a small inlet, we should be raising the whole ocean. In that case, the inlet will rise also.

Exactly. I can't help but feel that economics is basically upside down. A well motivated, secure and well paid work force means productive and dynamic firms, which means a productive and dynamic economy. Happy employees also mean happy customers. Am I

What's with the new, huge icons for Facebook, twitter etc below the post? Can we have a little more....umm....subtlety?

Total BS and a re-wrtitting of history. The economy was NOT in a recession when Bush took over, that one started 3/01, 2 months after he took office. Obama inherted the worst economic mess post WWII. Technically even Reagan didnt inhert a recession. Did Nixon inhert a recession? I dont think so.

The Nixon one starts nearly a year after he got in. Blaming that one on LBJ is definitely a stretch.

His very point is that all your "technically" is silly. He's arguing that if the economy "technically" went into recession 2 months after a President took office, then there's very little that the incoming President did to cause that. (And perhaps little that the outgoing President did either.) He views an economy that goes into recession less than a year after taking office as the President inheriting an incoming recession. By that measure, yes, Nixon and Eisenhower did inherit recessions, and so did Reagan. The case of Reagan especially makes your "technically" seem odd-- there was an NBER recession for much of 1980, and then starting soon in 1981, but not for those months right at the election.

You can make various plausible arguments for why recessions should be lagging or not compared to President's taking office, but Campbell's argument is consistent and less of a rewriting of history than what you're doing.

Come now, John.

We all know that the President, as Sun King, is responsible for everything about the state of the country from the second he swears the oath. The economy resets to zero at that very instant, after all - it's not the case, not remotely, that there's any lasting state to the economy that could affect things as far in the future as two entire months!

Except for President Obama, of course, who bears no responsibility for the state of the economy two years and three months after taking office. Certainly this recession is worse (but started earlier), but it is a little bit inconsistent to say that Republicans are fully responsible for recessions that start two months into their term, but the current President is not responsible for the economy failing to live up to his recovery projections after two years and three months in office.

What would be interesting is to see a set of graphs like Bartels, except that the president doesn't become responsible for the economy until "x" months after taking office (or perhaps even use the election as a transition point, too). Since Campbell arbitrarily set "x" to 12, it would be interesting to see other numbers as well.

Of course then you can take the graph that best matches your political beliefs and argue away.

John,

Do not put words in my mouth. I did not use the word "technically," although you are putting that in quotes. Do not rewrite what other people write here.

Looks like John responded to Dirk, who did use the word 'technically'.

Hey Barkley, shut the fuck up!

I'll probably get accused of being "technical" again or something, but part of the argument on all this, indeed what I have always seen, is not some count of which party was responsible for more recessions than the other one (supposedly, recognizing this is silly anyway), but the comparison of overall growth rates on average. Now, it would probably be interesting to see how that stacks up if one shoves everything to a year later for "responsibility" purposes, but certainly the standard result has long been that GDP growth rates post WW II (and also stock market performance) has been substantially better during Dem predidencies than GOP ones. Obvious ones hard to credit otherwise include most of LBJ's terms and the second term of Clinton.

Indeed, while this is without doing the one year shift, which could alter that conclusion, the only GOP prez to beat any Dem one was Reagan, and the only one he beat was Carter. Otherwise, all the Dem prezzes were ahead of all the GOP ones in terms of average GDP growth rates in their times, with a similar result holding for the stock market as well, Reagan again the one exception. No wonder he is such a hero to the party.

Talking about heroes, I have just read this funny but logic conclusion to an analysis of yesterday's GWU speech

"My fellow Americans, do we want an America where our most lethargic and mediocre youth are denied a leisurely half-decade acquiring a fraudulent six-figure credential in some worthless pseudo-discipline simply because we can’t afford it?"

And I wonder why free, rich, grownup people pay any attention to the heroes that this Tyler's post and the comments discuss with passion. We should be happy that they were not like Hitler, Stalin, Mao and many other dictators. We should not be surprised that they were not our Saviors. They were not like us because they were more powerful than we the little people, but they were not wiser and often abused their power. There is only one lesson to learn from their experience, but we knew it and next time we ignore it again --never trust a politician.

Presidents have a lot to say about tax policy not only how much but who we tax and the changes they made when they were president. should have effected the economy. http://visualizingeconomics.com/2011/04/14/top-marginal-tax-rates-1916-2010/ If there is no presidential party difference in economy it undermines the Republicans claim that we have to make a choice between taxing the rich and economic growth

Shhh. Don't tell anyone.

Bill, no one gives half a shit about what you think.

The strange thing is that one would think party identification works as a constant variable in that dataset. For example Clinton's economic and tax policies we much closer to Bush I than to JFK, but Bartels would have us pair Clinton and JFK in the analysis.

Democratic Presidents are better for the economy. Yes, any parties for better economy and happy life of people is a good party, I stand by this party.

Not that I am a partisan of either side on this, but I thought the Bartels argument was astonishingly feeble, and I found it depressing that a number of commentators that I thought should have known better used it. How about a brief survey of what is wrong – many of these have been pointed out already.

1. Tiny data set.
2. There is no ideological consistency between the presidents of the same parties (JFK was a tax cutter, Carter is seen as a lefty but was a deregulator in practice, Clinton was a relative fiscal conservative, Nixon was a massive interventionist, Reagan talked a good game about fiscal conservatives but was ok a hog-wild spender in practice etc.). In terms of fundamental economic policies, over 50 years, party affiliation does not actually tell you very much.
3. Sun-king fallacy (part 1): control of presidency ≠ control of congress (you know, the guys who actually make laws)
4. Sun-king fallacy (part 2): control of presidency ≠ control of state and local governments
5. Time lag (part 1) – the economy is a rather large and complex system, and it doesn’t exactly reset
Time lag (part 2) – policies that are recognized by most economists as “good” (pro-efficiency microeconomic reforms, fiscal discipline etc.) *often* have negative effects on growth in the short term, in return for more-than-compensatory increases in the medium term (by contrast, populist inflationary craziness may have positive effects in the immediate term and cause problems down the road). So measuring the quality of economic policy by concurrent growth rates is a really, really bad idea (unless you think hyperinflation is teh awesome).

Of course, as we've seen lately, the president doesn't control taxes or the budget.
These studies should have been centered on who controls Congress.

"Clinton was a relative fiscal conservative"
Clinton always proposed higher spending than he got. That period was the last time that Congress cut into the proposed spending. Since then Congress just piles on.

I agree that the dataset is short and no reliable inferences are likely to be made. But I don't get the logic. If I really wanted my Presidency to do well, wouldn't I want to start my term when the economy is at a trough? Until this century, per-capita income grew fastest as we emerge out of recession. It grew slowest as we went into recession. Given that postwar recessions were short and recoveries long, I would think a President would look best if he started his term with a recession.

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I was not going to bother, but since I have been so eloquently told to shut up...

From http://www.davemanuel.com/2010/08/03/us-gdp-growth-by-president-1948-2009

Average annual gdp growth rates by president or presidential term

Truman 4.82
Eisenhower 3.0
Kennedy/Johnson (61-64) 4.65
Johnson 5.05
Nixon 3.0
Nixon/Ford (73-76) 2.6
Carter 3.25
Reagan 3.4
Bush I 2.17
Clinton 3.88
Bush II 2.07
Obama -2.6

So, I have not gone in to recalculate (not going to waste that much time) how these change by moving everything to a year later, so that Truman gets
1953, Ike gets 1961, etc. but qualitatively it seems to go about like this.

Truman down a bit by adding 53
Ike up a bit by dropping 53 and adding 61
No change for JFK
Not much for adding 69 to LBJ (that recession did not get going until December)
Not much change for Nixon, maybe a slight improvement for Ford by giving him 77
Carter down some by losing 77 and adding 81
Reagan up slightly by losing 81 and gaining 89
Not much change for Bush I by shift
Clinton down some by adding 01 for 93
Bush II down a bunch by adding 09 for 01.
Obama up a whole bunch if we dump 09 and look at actual 10 number of 2.8, although that leaves him behind earlier GOPs, but ahead of Bushes.

In any case the generalization I made earlier pretty much holds even after these adjustments. Only Reagan is clearly ahead of any of the Dems,
namely Carter and Obama, although Nixon and Ike are slightly ahead of Obama.

I will add two more points.

One is that to the extent that presidential actions and policies affect the macroeconomy, they may do so over a much longer period than one year or two. Thus, while Bush II is getting most of the blame for the Great Recession (except of course for the lunatics who say it was all Clinton messing with CRRA), indeed some previous to him are also at least partly responsible, including Clinton, but also probably going back to the sainted Reagan.

Carter's problems that helped Reagan get elected may well reflect policies of Ford and Nixon. Problems Nixon and Ford had may well reflect policies of LBJ and even JFK, etc. Needless to say, this sort of view really muddles the partisan story pushed by anybody.

Second, too many people exaggerate the influence of the tax code and tax levels, perhaps those who bow down and worship at the feet of Grover Norquist. Sure, a really bad tax code can mess things up, such as in Russia prior to the simplification by Putin (I support simplification and have since before Reagan did some of it in 86). But it is frequently forgotten that during the generally more rapidly growing period soon after WW II, indeed all the way to 1964, the top marginal tax rate was over 90%. And, higher taxing Clinton's presidency did better growthwise than lower taxing Reagan, Bush I, or Bush II's.

I agree with the author. Economy trails policy, trails voters who react to global events, which in turn means reacting to their pocketbooks.

a) Citizens VOTE in democrat (maternal and comfortable) or republican ( paternal and protective) in response to their current sensitivity about the economy.
b) New congresses and administrations react, make policy, and he economy lags policy.
c) Policy takes place in context of the broader global economic conditions.

The discovery, conquest, occupation, and exploitation of the american continent was a gold rush for western civilization.
This gold rush caused the rise and fall of european powers.
The fall of europe created a postwar vacuum that extended the gold rush globally for americans.
The fight against communism (which was really a fight against the west) was won by the west, and the western model.
The world has adopted the western model, and is appropriating western technology and markets as did americans appropriate european technology and markets.

Since the PRMARY CAUSAL PROPERTIES OF OUR ECONOMY are NOT government policy BUT WORLD ECONOMIC CONDITIONS, all attributions of weight to political policy are OVERSTATED.

Regan's purpose was to defeat world communism soundly using the economy and entrepreneurship and our capacity for debt as the tool.
Our circumstance is not a problem of Regan, or any other president. It is a problem of the decline of the western advantage post the european civil war.
If anything it is the fault of FDR creating pyramids of intergenerational redistribution that are absolutely unpredictable, instead of forced saving which is predictable. Conversely, FDR was enraptured by the soviets, and trying to compete with other world leaders while at the same time dealing with unrest at home. THe unrest at home was the result of easy credit and unregulated immigration. And all of this hubris is simply inter-temporal risk taking by presidents all the way back to the end of the civil war. And the ability for presidents to take those risks was because the government was centralized first by the civil war, second by the spanish and third by the first world war.

DETERMINATION OF SUCCESS OR FAILURE IN POLITICAL ECONOMY DEPENDS UPON THE TIME SCALE.

All differences in values are differences in time preference.

Conservatives have longer time preferences, and consider all five human sentiments in their evaluations. Liberals have shorter time preferences and consider only two sentiments in their evaluations.

And you can see the evidence of these cognitive biases in the contents, in the article, and in each writer's SELECTIVE interpretation of historical events in order to support his predispose sentimental values.

There is no reason taking place above. Only complex expression of sentiments.

De Gustibus Non Disputandum. There is no more to it than that.

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