A study conducted by Alan Blinder and Mark Watson of Princeton University and published by the National Bureau of Economic Research finds (not to our surprise) that the American economy performs overwhelmingly better when the President is a Democrat. The overall results of the study conclude:
The U.S. economy has grown faster—and scored higher on many other macroeconomic metrics—when the President of the United States is a Democrat rather than a Republican.What makes these results not only more credible but also more interesting is the study's subsequent note about how this trend statistically significant even while under the small sample size of 16 terms, with the authors elaborating:
For many measures, including real GDP growth (on which we concentrate), the performance gap is both large and statistically significant, despite the fact that postwar history includes only 16 complete presidential terms.The paper goes on to explain that under Democrats, real GDP has grown 1.8% faster annually, over 8% faster over an entire term, we have experienced our 5 biggest periods of economic growth since World War II, undergone over 2.5% higher growth in the business and industrial sector, and have experienced 1.4% higher employment growth. Over the long term, the study found that while 39 fiscal quarters of Democrat presidents has experienced recession, 94 fiscal quarters of Republican presidents have brought the country into recession and that nearly every single economic indicator besides inflation found a statistically significant edge that Democrats had over Republicans.
While these numbers are wonderful and all, it's important to examine the underlying reasons behind this (besides the fact that we're awesome). The study first debases general praise of Reaganomics, explaining:
Over Reagan’s full eight years, GDP growth averaged just 3.5%, falling just shy of the Carter performance. Thanks to the 1990-1991 recession—which is often attributed to tight money and a spike in oil prices—growth was substantially slower during George H. W. Bush’s term.The study summates the overall explanations for the Democrat's better performance, drawing on evidence of higher total factor productivity under Democrats, less increases in military spending and presence, and (as a result) lower susceptibility to oil shocks, higher consumer expectations, and less international disapproval:
Rather, it appears that the Democratic edge stems mainly from more benign oil shocks, superior TFP performance, a more favorable international environment, and perhaps more optimistic consumer expectations about the near-term future.While this is great news for proponents of liberal economic policies, it's important to end with a caveat. The study concedes that for now,:
These factors together explain slightly more than half of the 1.80 percentage point D-R growth gap. The rest remains, for now, a mystery of the still mostly-unexplored continent. The word “research,” taken literally, means search again. We invite other researchers to do so.So, about half of the large economic performance divide between Democrats and Republicans remains unclear and further empirical analysis is necessary. However, with the way things are looking, I wouldn't be surprised if further academic work only further confirms the results Princeton has found.
For the time being, we liberals rock.