The President's Economy: Parity in Presidential Party Performance

Article excerpt

Have Democratic presidents had significantly better economic records than their Republican counterparts in the post-World War II era? Some conclude that they have (Alesina and Rosenthal 1995; Hibbs 1987). More recently, in his highly controversial study Unequal Democracy, Larry Bartels (2008) finds that economic growth has been stronger, unemployment lower, and incomes less unequal when Democrats occupy the White House. Taking these findings as a jumping off point, he then explores possible reasons why Democrats have not enjoyed the same success in elections that they apparently have had in economics.

Although Bartels probed his findings carefully, I probed them further and concluded that they were incorrect (Campbell 2011). There have been, in fact, no significant presidential party differences in economic growth rates, unemployment rates, or in the income gaps between the rich and the poor--once the economic conditions inherited by new presidential parties are properly taken into account. The apparent differences in the economic records of the parties are not the result of Democrats pursuing more successful policies, as Bartels supposes, but the result of the parties inheriting economies from their predecessors that were in very different conditions.

Responding to this dispute, Comiskey and Marsh (2012) have continued the exploration of the possible party differences. After taking into account the peaks and troughs of the business cycle as well as the effects of oil prices and wars, they find real gross domestic product (GDP) growth has been greater and unemployment lower under Democrats. They find no significant party difference, however, in the real growth of disposable personal income. Aside from this exception, they concur with Bartels.

Is there or is there not a presidential party difference in economic performance? In this brief article, I revisit this question. First, I reevaluate the evidence that there has been a difference between the presidential parties in the economy's rate of growth. My findings are unchanged. There is no significant difference in the economic records of the presidential parties. Second, I suggest several problems with Comiskey and Marsh's study that may have led to their erroneous conclusion that there has been a significant party difference.

The Illusion of a Partisan Difference

In my original analysis, I examined each of the economic indicators on which Bartels found a presidential party difference--real gross national product per capita, unemployment rates, and income growth rates at different income levels. In each instance, party differences were evident in a bivariate analysis but disappeared when prior economic conditions were taken into account. A similar analysis of quarterly real GDP growth, the growth measure used by Comiskey and Marsh (2012, 52), is reported in Table 1. The data are from the Bureau of Economic Analysis (2012) and cover the period from 1948 through 2011. The president's responsibility for the economy is coded as a dummy variable and is lagged by one year. New presidents are not deemed to be responsible for the economy until they have been in office for one year and have had time to put their policies in place. By the same token, a president is considered to be responsible for the economy for one year after leaving office, since the effects of his policies do not abruptly end when a successor takes the oath. The one-year lag in presidential responsibility was assumed by Bartels (2008, 33) and accepted in my earlier analysis (Campbell 2011, 4) and by Comiskey and Marsh (2012, 47), though I will have more to say shortly about their adherence to this assumption. Lagged economic growth is also included in the analysis since economic conditions are not neatly packaged into quarters. Since the economy is continuously in motion, the condition of the economy at time t should be expected to have an effect on the economy at t+l. …