Comments on: Presidents and the Economy

By: stan

stan — Fri, 11 Apr 2008 22:03:15 +0000

So the OPEC oil shocks were the fault of the GOP? And the extraordinary boom due to Y2K fears was really because Bill Clinton: 1) set the calendar and 2) forced computer programmers to use two digits for years back when he was a kid?

If you simply adjust for the OPEC distortions and the Y2K boom and bust, the study's conclusions turn to garbage.

By: diz

diz — Tue, 08 Apr 2008 14:06:13 +0000

The basic problems are:

1) The economy fluctuates regardless of whether the president has a -D or an -R after their name.
2) Politicians exert limited control over the economy, and presidents are a subset of that.
3) Economic policies do not have effects that are seen instantly, so you can't assume that the President in office the time an effect is seen is the president that "caused" it.
4) If you look at the actual policies undertaken, they are not consistently "Democratic" or 'Republican" across or even within administrations. Bush I was far more consistent with Clinton than Reagan. Even Reagan was a tax raiser during parts of his administration. Clinton also shfted between a raiser and a cutter of taxes over time.

When you take into account all this noise, it's impossible to pull out the signal.

Partly when in recent years the signal has not been materially changing. (It's easy to see the effect of Mugabe-type policies, but it's not reasonable to expect to see the affects of minor tweaks to the tax rates or a minimum wages that affects very few people.)

I really think we have seen only one major change in economic policy in the last 30 years. That occurred in 1981-2 when Reagan took over, cut marginal taxes and reigned in inflation.

By: mark

mark — Tue, 08 Apr 2008 02:12:55 +0000

In your example overall income of the bottom quintile remains the same, except for now 1/6 of the workers of the decile are unemployed. WHo will support them?

By: Steve

Steve — Tue, 08 Apr 2008 00:09:06 +0000

If increasing the minimum wages raises unemployment, is it possible that this could actually increase income in the lowest quintile? Are they looking at median income in a quintile, or average income, or what? Because I could see a situation in which everyone in the bottom quintile made $10,000, or $5/hr. times 2,000 hours/year. Now, say the minimum wage went up to $6/hr, but one out of every six people making minimum wage was laid off. Now, average income would still be the same, you'd have 5/6 times $6/hr. x 2,000 hours/year + 1/6 times $0 per person in that quintile. But if they took the median income of people in that quintile would now be $1,200.

I know this makes a lot of assumptions, and even if this isn't the way income within quintiles is measured there are undoubtedly other issues with the study.

By: Erik The Red

Erik The Red — Mon, 07 Apr 2008 23:42:20 +0000

Oddly enough, every time I read one of these posts I get the desire to send you vodka. I must be projecting…

By: Garble

Garble — Mon, 07 Apr 2008 23:31:39 +0000

This isn't limited to the government. Anytime you think you can force your 'customer' to do what you want you'll give it a shot.

For example:

I'm an engineer responsible for hydraulic steering gears. I'm in a situation where I want (but don't HAVE to make a change cylinder line. My change will have fewer bends (less tooling and cycle time) AND use less material. Should cost less right? Nope, will cost more. Supplier wants a price increase to account for rises in material costs. That's fair but I won't make the change if it costs more money. So I offer to do it for the same price. No way! If I want a new part I have to agree to pay a much higher price for material. So we're not going to do it. It would be better for everyone concerned if we did what I want. But they're not going to open up the contract without a material cost increase.

Cali probably feels the same way. They want this better fire suppression system. The only way they can get you to put one in is to hold any future changes hostage. So that's what they're going to do. It's stupid and if I lived there I'd be pissed but it's hardly unique to government.

By: Larry Sheldon

Larry Sheldon — Mon, 07 Apr 2008 20:44:08 +0000

Somebody somewhere (a lot smarter than me) taught me about "first level veto". The idea is that the President (or the CEO, or your mother) can the perfect idea with the perfect and fool-proof, fail-proof implementation.

Theoretically that can all be passed without damage in one or more steps to the person that has to actually do it--the first level.

Who can do or not do with out limit or bound. (Yes, you can impose draconian punishments after-the-fact, but the first level has the final say-so).

Now. Consider this. We get a new president in January. Assuming the best, that person will have at most 24 months to work on changing things.

How long do you think (given Civil Service and all) it will take to swap out the First Level for people who agree with the new President?

By: Rob

Rob — Mon, 07 Apr 2008 20:03:54 +0000

Those last few paragraphs remind me of the book:
The Death of Common Sense by Philip K Howard

There is an example of nuns wanting to build a homeless shelter (I believe in NYC).
Unfortunately, they are unable to afford the costs of renovating an old building to bring it "up to code". In their case, they couldn't afford the build an elevator for the handicap. So, instead of potential sheltering 100s of homeless, they decided not to proceed.

By: Ian Random

Ian Random — Mon, 07 Apr 2008 19:42:36 +0000

I’d rather see the control of congress versus growth. This guy has a nice analysis of control of senate, congress and the presidency which would be even better. Fortunately, the president can’t make-up laws, he can only sign what has been passed by congress and the senate.

http://arts.bev.net/roperldavid/politics/congress.htm