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I read the headlines, listen to the news. The headlines(some) say, " The Economy is Booming Under Trump. " Is The U.S
economy that influenced by who is in the presidential office?
I took a basic economics class you know "equilibrium, opportunity cost, etc.
Would like input from folks who know about this subject.
An Administration may be able to marginally influence an economy. There may be an irrational exuberance for certain Administrations by business, or a totally pessimistic view by business.
An Administration's policies can certainly impact an economy, as can Federal Reserve policies. We've seen that in the past with changes in tax and tariff policies, and the total failure of the Federal Reserve to act.
President Bush's withdraw of tactical and theater nuclear weapon systems from Europe, as well as the planned withdraw of the entire US VII Corps in Germany (which had been training for two years in the Turkish desert bordering Iraq for the Gulf War), directly or indirectly resulted in the loss of more than 500,000 jobs as hundreds of contracts were cancelled and Capital was reallocated from the Defense Industry to other sectors of the economy resulted in the 1990-1991 Recession.
I think you'd have to look at it on a case-by-case basis.
The president can influence an economy directly by signing trade agreements with other countries. Free trade tends to give us producers a larger marketplace where they can compete. It also allows other nations the opportunity to trade with us. As the us has long opened its marketplace it now tends to import much of its goods. However this also keeps inflation low when combined with the fixed dollar as the centerpiece of the world economy. Our strategic advantage is the ability to buy a great range of cheap imports.
The president can also influence the economy indirectly. Business investment can rise in anticipation of better business conditions. If a president is expected to lower tax rates, companies may scale up to meet demand. If a president is expected to implement expensive regulations that industry may lose investment.
The idea that a president can create jobs is foolhardy unless it’s White House hiring. What they can do is work towards making a business climate that is superior to other nations.
The reality is that presidents have far less control over the economy than many might imagine.
Presidential economic records are highly dependent on the dumb luck of where the nation is in the economic cycle. And the White House has no control over the demographic and technological forces that influence the economy.
Even in areas where the president really does have power to shape the economy — appointing Federal Reserve governors, steering fiscal and regulatory policy, responding to crises and external shocks — the relationship between presidential action and economic outcome is often uncertain and hard to prove.
Presidents, Courts and Congress can have huge impacts on business and the economy.
It used to be that this took time to percolate through the system. Sometimes actions did have immediate impact though. Mostly it was a slow shaping.
Today with all the automated trading scanning headlines, the president can shake the markets with a tweet. Large investors can do the same.
The fact that large multi national companies have controlling interest in practically every commodity and product in multiple countries has also greatly tightened response.
I think the market response is near instant now, not to confuse that with being correct.
So yes Trump has had major impact on the US economy.
Moderator cut: Orphaned response to deleted post .
lol at linking an "economy" to a person especially a president. Are people here really that uninformed and believe the political hype machines presented to them?
But a President and Congress can help ruin an economy like Bush Jr did by starting wars in the middle east and spending trillions of our dollars
We onlyknow the Indicators, nothing about the actual health of the economy.
Think of it like the parimutuel board at a race track. The odds are "indicators" not of a horse's likelihood of winning, but of the expectations of the players that it will win. If it suddenly rains, the odds change qauickly. The tote board numbers that reflect "the economy" don't reflect anything but the expectations of the investors. Which are easily manipulated.
The best economy the U.S. ever had was 1965-69, under LBJ, the most liberal president we ever had. However, the stregnth of the economy at that time had little to do with him.
Sometime people should read the actual constitution. The president does not, and was never intended to have significant economic powers. The House of Representatives has the most significant economic power since it ultumately controls taxation and spending.
Even with the expanded interpretation of the president's powers we have today, his economic powers are severely limited by congress. The president can do little things. Sometimes those little things might add up to medium things, but in no way can the president make or break the economy on his own.
All this b.s. about Trump's economy being great and Obama's being terrible are just that, because the economy is not "theirs.". The president is not CEO of GDP. He can't even control the government's spending because congress does that. Ie: Trump can't get his wall built. Once congress appropriates, THEN the executive branch has some latitude to make financial & regulatory decisions, but the real power still belongs to congress.
The best economy the U.S. ever had was 1965-69, under LBJ, the most liberal president we ever had. However, the stregnth of the economy at that time had little to do with him.
Those were the years in which LBJ escalated Vietnam from a police action to a world war. Wartime spending on the military-industrial complex does wonders for the economy, as long as it somebody else's country that is being blitzed.
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