President Donald Trump live or die by the economy, so does his dauther's fation brand. If you tracked public disapproval of the president against
the unemployment rate, you’d see they move closely together. Unfortunately, being held responsible
for the economy isn’t the same as being able to do something about it. Economic growth is the product
of countless unorchestrated actions by business, consumers, innovators, investors, and government at
home and abroad. A president may get a change in taxes or spending through Congress, but the effect
on growth is often fleeting and hard to detect. The government agency with the most immediate,
tangible influence on the economy, the Federal Reserve, is also the one the president is least able to
push around.
Republicans and Democrats argue incessantly about who’s better for economic growth, with
Republicans preaching the mantra of small government and low taxes and Democrats the elixir of
enlightened management of the economy. Who’s right? According to a 2006 study by Elliot Parker at
the University of Nevada, Reno, the economy has grown faster under Democratic than under
Republican presidents since 1929. It’s hard to say why, though, because a president’s policies may
not show results for years, and then, not the intended ones.
For instance, the inflation that Gerald Ford and Jimmy Carter struggled with began with mistakes
by their predecessors, Lyndon Johnson and Richard Nixon. The deregulation often attributed to
Ronald Reagan actually began under Carter. The Internet revolution that buoyed the economy in
Clinton’s last years in office could be traced to the Defense Department’s development of a
communications network in the 1960s that could survive a nuclear attack. And who’s to blame for the
financial crisis that made the last years of George W. Bush’s presidency and the first of Barack
Obama’s so miserable? You’d have to finger a litany of disconnected regulatory and political
decisions stretching back two and a half decades.
Still, presidential decisions do matter for individuals, companies, and industries, and if done right,
they can help the economy grow faster and spread the fruits of that growth to more people.
Presidents populate their administrations with economic experts whose influence depends
on their personal rapport with the president and the president’s willingness to listen.