Presidents have little influence on the economy
A cautionary perspective for those who look to the oval office for economic salvation. I thought it a worthy reminder as election year rhetoric escalates and employment suffers. Frankly, after you add international factors like Europe and China, the economy like the weather is just far more powerful on it’s own to be subject to executive branch manipulation.
By Alex Alben
President Bush speaks about the economy during a March address before The Economic Club of New York.
The hubris of presidential candidates who promise to fix the American economy if they are elected to the White House summons the image of legendary King Canute, who believed he had the power to hold back the advancing sea.
The last president to have a substantial influence over the American economy was Franklin Delano Roosevelt. From 1939-45, federal spending increased from just under 10 percent of gross domestic product to more than 43 percent of our total national GDP, according to the Office of Management and Budget. Spurred by New Deal domestic programs and massive military spending to fight wars in Europe, North Africa and the Pacific, federal expenditures accounted for 43 cents of every dollar of our economic output at the peak of World War II.
President Clinton frequently claims to have “created” 22 million jobs in his eight years in office and President Bush cites 25 consecutive quarters of economic growth during his time in office. While those statistics are technically correct, they don’t reflect the underlying dynamics of who is actually investing in new ventures, risking capital, innovating new products and creating new jobs.
In a truer sense, Microsoft’s Steve Ballmer, Intel’s Craig Barrett, Cisco’s John Chambers, Apple’s Steve Jobs, IBM’s Samuel Palmisano and eBay’s Meg Whitman each have had more impact on job creation than all federal officials combined.