JUDGMENT CALLS
Robert J. Samuelson
It Ain't the Economy, Stupid
Why no president can control our $14 trillion engine
As the economy weakens and the campaign intensifies, we'll hear more of James Carville's familiar refrain: It's the economy, stupid. Well, it ain't or, at least, shouldn't be. I'm not claiming that Carville is wrong about voting. People vote their pocketbooks. In the latest Washington Post-ABC NewS poll, the economy overshadows Iraq as the most important issue by 39 percent to 19. What I'm saying is that this sort of voting is shortsighted. It rewards or punishes candidates for something beyond their power.
We have a $14 trillion economy. The idea that presidents can control it lies between an exaggeration and an illusion. Our presidential preferences ought to reflect judgments about candidates' character, values, competence and their views on issues where what they think counts: foreign policy; long-term economic and social policy—how they would tax and spend; health care; immigration. Forget the business cycle.
True, presidents try to manipulate it. In 1971, President Richard Nixon imposed wage and price controls in part to prevent inflation from jeopardizing his reelection. The economy boomed in 1972. But the controls were a time-delayed disaster. When they were removed, inflation exploded to 12 percent in 1974. In 1980, the Carter administration adopted credit controls to squelch raging inflation. The result was a short recession—a complete surprise—that probably sealed Jimmy Carter's defeat in November.
History's long view teaches the same lesson. No president tried harder, with good reason, to influence the business cycle than Franklin Roosevelt. When he took office in 1933, unemployment was roughly 25 percent. By executive order and congressional legislation, FDR effectively abandoned the gold standard, adopted deposit insurance, tried to prop up falling farm and factory prices, rescued many defaulting homeowners, regulated the stock market and embarked on massive public works.
With what result? Well, leaving the gold standard aided recovery. But some economic research suggests that other New Deal measures may have frustrated revival. In any case, all of them together didn't end the Great Depression. World War II did that. In 1939, unemployment was still 17 percent.
No matter. When the economy is good, presidents claim credit; when it's not, their opponents blame them. Political phrasemaking compounds the error by personalizing the process. Hence, "Reaganomics" and "Clintonomics." Among Republicans and Democrats alike, there is much mythmaking.
- 1
- 2
- Next Page »
Loading Menu
Member Comments
Posted By: dawei @ 05/12/2008 12:01:18 AM
Comment: I think all three candidates are worthless. Abama and Clinton will not handle terrorists correctly, all three will not handle China corrcetly, and McCain is an idiot in understanding Economics. Two of the top five qualifications should be Economics and military action. Not reserves or just service in the Army, Navy or Marines. I mean action in a war and probably nothing less than Captain. I saw a new blog site that is good. www.stopthenonsensenow.blogspot.com. I don't know hoe long until he gets to todays issues but he is writing about the liars in the white house during the 80's and the elite killers and terrorists, the CIA. His mission statement says he wants the people of the US to revolt and take back the government. He is right.
Carter did not renew the lease on the Panama Canal, which is great that China controls it now, and the people vote the pocketbook is correct. They are stupid. The above blog site tells about how stupid the US people are. I am only 29 and working on my PhD but the person writing the blog site is going to talk about Economics and the amnesia everyone has developed about Reagan and giving chemicals to Hussein, Bush going after oil the Chinese were in negotiations with before 9/11, the CIA funding terrorists by selling drugs to American children, and a whole load of "crap" as he puts it that the government has "bamboozled" the public over the last 35 years or more.
And he has nothing good to say about the Kennedys either.
Posted By: kcarizona @ 02/09/2008 6:59:35 AM
Comment: I once heard blamming the President for a bad economy is like blaming Ronald McDonald for a bad hamburger. i am waking up and trying to stop the NO GAIN BLAME GAME and looking to what i can do today to make this economy better. If each one of us across the country did our part the president could go about doing his job and we... too much to ask?? everyone minding their own business???? i don't mind President Bush's business i mind my own. My business as a citizen is to mind the election and vote and so i am voting for the best i vote Hillary. I vote Apple over Microsoft i vote Costco over Sams club i vote Coke and Pepsi over RC i vote the best, i wish i could vote Ford over my Honda but for now i vote Honda - for now.
Posted By: HerbB @ 02/08/2008 11:46:21 PM
Comment: So basically you say we should just throw in the towel. There is nothing a president could do with all his power and influence to improve the economy. So we should forget the economy as deciding factor for our presidential candidate and judge him by his credentials on national security. Is this what you are suggesting? Hmm...Can it be that your favorite candidate is John McCain? Should we just forget about his lack of credentials on economics and internal affairs and build our decision in large on his heroism during the Vietnam war? Isn't a President also in charge of the federal budget? Isn't he also in a large part responsible what energy policy this country is governed by? Isn't he also responsible for raising or lowering the debt? Isn't he in charge of federal spending? It seems to me that you are limiting your judgment criteria a bit too much. Give George W more merit for the mess he made!