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I have the impression that, in general, the American economy tends to be better when Democrats are president. If Trump's presidency is consistent with history, I would predict that, despite his supporters expectations, the American economy will tend to go downhill for the next 4 to 8 years.
But I always worry that I am overlooking good evidence or arguments due to my own biases, so I'm always curious to find the BEST arguments against my own view. I did a bit of searching and found plenty of reasons to think that my general impression is correct. I will offer some links below to support this. What I would like to see are some good sources for evidence against my view. (And, of course, I would also be happy to see more evidence supporting my view as well.)
I would also be very curious to see if liberals and conservatives can agree on what some good benchmarks for "good" or "bad" economic performance might be. Can we agree, for example, on what a good employment rate is, and how to measure it? What are the best measures of economic performance?
My hope is that this can be a discussion based on evidence and logical arguments, rather than the mere shouting of opinions and name-calling.
BTW: Keep in mind a distinction between "facts" and "reasons." It could be the case, for example, that the economy tends to be better under Democrat presidents, but the reason might be "pure luck" as opposed to any direct consequence of economic policies. One of the links below suggests that this might actually be the case.
Here are some sources that I think give strong reasons to think that the economy generally does better under liberal rather than conservative economic/social policies:
https://theprogressivecynic.com/2014...he-difference/
Quote: "In this article, I will present many maps, detailing widespread trends including everything from education and health to income equality and happiness. These maps will draw a clear and distinct pattern, where states with conservative leanings tend to have poorer societal outcomes and states with more progressive leanings tend to have better policy outcomes."
Which Party Is Better for the Economy?
Quote: "71% of economists favor using government to redistribute wealth and only 8% strongly oppose it. In fact, the concept of the diminishing marginal utility of wealth is a very well established and non-controversial economic principle. Even Adam Smith expressed the view that the government should redistribute wealth."
https://www.princeton.edu/~mwatson/p...on_Nov2013.pdf
Quote: "There is a systematic and large gap between the US economy’s performance when a Democrat is President of the United States versus when a Republican is. Democrats come out better on almost every criteria. Using real GDP growth over the full sample, the gap is 1.80 percentage points--which, at about 55% of the grand mean, is stunningly large. [...] Democrats would no doubt like to attribute the large D-R growth gap to better macroeconomic policies, but the data do not support such a claim. [...] It seems we must look instead to several variables that are mostly “good luck.” Specifically, Democratic presidents have experienced, on average, better oil shocks than Republicans, a better legacy of (utilization-adjusted) productivity shocks, and more optimistic consumer expectations (as measured by the Michigan ICE). [...] These three “luck” factors together (oil, productivity, and ICE) explain 46-62% of the 1.80 percentage point D-R growth gap. The rest remains, for now, a mystery...."
If, as suggested in the third article, the difference is most due to luck, then I would be committing the "gambler's fallacy" if I were to predict that the economy will not do very well under Trump. On the other hand, if the factors that are sill a mystery are, in fact, related to liberal policies, then my bet could turn out to be a good one after all.
Quote: "When he took office in January of 2011, Minnesota governor Mark Dayton inherited a $6.2 billion budget deficit and a 7 percent unemployment rate from his predecessor, Tim Pawlenty, the soon-forgotten Republican candidate for the presidency who called himself Minnesota’s first true fiscally-conservative governor in modern history. [...] During his first four years in office, Gov. Dayton (a Democrat) raised the state income tax from 7.85 to 9.85 percent on individuals earning over $150,000, and on couples earning over $250,000 when filing jointly — a tax increase of $2.1 billion. He’s also agreed to raise Minnesota’s minimum wage to $9.50 an hour by 2018, and passed a state law guaranteeing equal pay for women. [...] By late 2013, Minnesota’s private sector job growth exceeded pre-recession levels, and the state’s economy was the fifth fastest-growing in the United States. Forbes even ranked Minnesota the ninth best state for business...."
Location: Live:Downtown Phoenix, AZ/Work:Greater Los Angeles, CA
27,606 posts, read 14,581,858 times
Reputation: 9169
Quote:
Originally Posted by Gaylenwoof
I have the impression that, in general, the American economy tends to be better when Democrats are president. If Trump's presidency is consistent with history, I would predict that, despite his supporters expectations, the American economy will tend to go downhill for the next 4 to 8 years.
But I always worry that I am overlooking good evidence or arguments due to my own biases, so I'm always curious to find the BEST arguments against my own view. I did a bit of searching and found plenty of reasons to think that my general impression is correct. I will offer some links below to support this. What I would like to see are some good sources for evidence against my view. (And, of course, I would also be happy to see more evidence supporting my view as well.)
I would also be very curious to see if liberals and conservatives can agree on what some good benchmarks for "good" or "bad" economic performance might be. Can we agree, for example, on what a good employment rate is, and how to measure it? What are the best measures of economic performance?
My hope is that this can be a discussion based on evidence and logical arguments, rather than the mere shouting of opinions and name-calling.
BTW: Keep in mind a distinction between "facts" and "reasons." It could be the case, for example, that the economy tends to be better under Democrat presidents, but the reason might be "pure luck" as opposed to any direct consequence of economic policies. One of the links below suggests that this might actually be the case.
Here are some sources that I think give strong reasons to think that the economy generally does better under liberal rather than conservative economic/social policies:
https://theprogressivecynic.com/2014...he-difference/
Quote: "In this article, I will present many maps, detailing widespread trends including everything from education and health to income equality and happiness. These maps will draw a clear and distinct pattern, where states with conservative leanings tend to have poorer societal outcomes and states with more progressive leanings tend to have better policy outcomes."
Which Party Is Better for the Economy?
Quote: "71% of economists favor using government to redistribute wealth and only 8% strongly oppose it. In fact, the concept of the diminishing marginal utility of wealth is a very well established and non-controversial economic principle. Even Adam Smith expressed the view that the government should redistribute wealth."
https://www.princeton.edu/~mwatson/p...on_Nov2013.pdf
Quote: "There is a systematic and large gap between the US economy’s performance when a Democrat is President of the United States versus when a Republican is. Democrats come out better on almost every criteria. Using real GDP growth over the full sample, the gap is 1.80 percentage points--which, at about 55% of the grand mean, is stunningly large. [...] Democrats would no doubt like to attribute the large D-R growth gap to better macroeconomic policies, but the data do not support such a claim. [...] It seems we must look instead to several variables that are mostly “good luck.” Specifically, Democratic presidents have experienced, on average, better oil shocks than Republicans, a better legacy of (utilization-adjusted) productivity shocks, and more optimistic consumer expectations (as measured by the Michigan ICE). [...] These three “luck” factors together (oil, productivity, and ICE) explain 46-62% of the 1.80 percentage point D-R growth gap. The rest remains, for now, a mystery...."
If, as suggested in the third article, the difference is most due to luck, then I would be committing the "gambler's fallacy" if I were to predict that the economy will not do very well under Trump. On the other hand, if the factors that are sill a mystery are, in fact, related to liberal policies, then my bet could turn out to be a good one after all.
Quote: "When he took office in January of 2011, Minnesota governor Mark Dayton inherited a $6.2 billion budget deficit and a 7 percent unemployment rate from his predecessor, Tim Pawlenty, the soon-forgotten Republican candidate for the presidency who called himself Minnesota’s first true fiscally-conservative governor in modern history. [...] During his first four years in office, Gov. Dayton (a Democrat) raised the state income tax from 7.85 to 9.85 percent on individuals earning over $150,000, and on couples earning over $250,000 when filing jointly — a tax increase of $2.1 billion. He’s also agreed to raise Minnesota’s minimum wage to $9.50 an hour by 2018, and passed a state law guaranteeing equal pay for women. [...] By late 2013, Minnesota’s private sector job growth exceeded pre-recession levels, and the state’s economy was the fifth fastest-growing in the United States. Forbes even ranked Minnesota the ninth best state for business...."
Of course the economy does better under Democrats. Because public spending injects money into the economy. Every dollar the government spends doesn't just vanish, it goes into the general economy
One of the best arguments, because it is not specific to a topic, is actually a general observation: people become more conservative as they get older. Even as a teen, I was troubled by knowing this from extensive reading. I knew that people gain more knowledge and experience as they aged; so the more you know, the more likely you are to be conservative.
My life reflects the observation: I personally was raised as a far-left Liberal (as everyone in MA and surrounding states are), and ended up on the Libertarian end of conservatism, after a post-grad education and decades of experience in government & the private sector. No sane person would still be a liberal, if they experienced what I did working for HUD (one of the handful of white people that ever worked in this disgraceful agency of mind-blowing corruption and graft).
Location: Live:Downtown Phoenix, AZ/Work:Greater Los Angeles, CA
27,606 posts, read 14,581,858 times
Reputation: 9169
Quote:
Originally Posted by NHartphotog
One of the best arguments, because it is not specific to a topic, is actually a general observation: people become more conservative as they get older. Even as a teen, I was troubled by knowing this from extensive reading. I knew that people gain more knowledge and experience as they aged; so the more you know, the more likely you are to be conservative.
My life reflects the observation: I personally was raised as a far-left Liberal (as everyone in MA and surrounding states are), and ended up on the Libertarian end of conservatism, after a post-grad education and decades of experience in government & the private sector. No sane person would still be a liberal, if they experienced what I did working for HUD (one of the handful of white people that ever worked in this disgraceful agency of mind-blowing corruption and graft).
I have the impression that, in general, the American economy tends to be better when Democrats are president. If Trump's presidency is consistent with history, I would predict that, despite his supporters expectations, the American economy will tend to go downhill for the next 4 to 8 years.
But I always worry that I am overlooking good evidence or arguments due to my own biases, so I'm always curious to find the BEST arguments against my own view. I did a bit of searching and found plenty of reasons to think that my general impression is correct. I will offer some links below to support this. What I would like to see are some good sources for evidence against my view. (And, of course, I would also be happy to see more evidence supporting my view as well.)
I would also be very curious to see if liberals and conservatives can agree on what some good benchmarks for "good" or "bad" economic performance might be. Can we agree, for example, on what a good employment rate is, and how to measure it? What are the best measures of economic performance?
My hope is that this can be a discussion based on evidence and logical arguments, rather than the mere shouting of opinions and name-calling.
BTW: Keep in mind a distinction between "facts" and "reasons." It could be the case, for example, that the economy tends to be better under Democrat presidents, but the reason might be "pure luck" as opposed to any direct consequence of economic policies. One of the links below suggests that this might actually be the case.
Here are some sources that I think give strong reasons to think that the economy generally does better under liberal rather than conservative economic/social policies:
https://theprogressivecynic.com/2014...he-difference/
Quote: "In this article, I will present many maps, detailing widespread trends including everything from education and health to income equality and happiness. These maps will draw a clear and distinct pattern, where states with conservative leanings tend to have poorer societal outcomes and states with more progressive leanings tend to have better policy outcomes."
Which Party Is Better for the Economy?
Quote: "71% of economists favor using government to redistribute wealth and only 8% strongly oppose it. In fact, the concept of the diminishing marginal utility of wealth is a very well established and non-controversial economic principle. Even Adam Smith expressed the view that the government should redistribute wealth."
https://www.princeton.edu/~mwatson/p...on_Nov2013.pdf
Quote: "There is a systematic and large gap between the US economy’s performance when a Democrat is President of the United States versus when a Republican is. Democrats come out better on almost every criteria. Using real GDP growth over the full sample, the gap is 1.80 percentage points--which, at about 55% of the grand mean, is stunningly large. [...] Democrats would no doubt like to attribute the large D-R growth gap to better macroeconomic policies, but the data do not support such a claim. [...] It seems we must look instead to several variables that are mostly “good luck.” Specifically, Democratic presidents have experienced, on average, better oil shocks than Republicans, a better legacy of (utilization-adjusted) productivity shocks, and more optimistic consumer expectations (as measured by the Michigan ICE). [...] These three “luck” factors together (oil, productivity, and ICE) explain 46-62% of the 1.80 percentage point D-R growth gap. The rest remains, for now, a mystery...."
If, as suggested in the third article, the difference is most due to luck, then I would be committing the "gambler's fallacy" if I were to predict that the economy will not do very well under Trump. On the other hand, if the factors that are sill a mystery are, in fact, related to liberal policies, then my bet could turn out to be a good one after all.
Quote: "When he took office in January of 2011, Minnesota governor Mark Dayton inherited a $6.2 billion budget deficit and a 7 percent unemployment rate from his predecessor, Tim Pawlenty, the soon-forgotten Republican candidate for the presidency who called himself Minnesota’s first true fiscally-conservative governor in modern history. [...] During his first four years in office, Gov. Dayton (a Democrat) raised the state income tax from 7.85 to 9.85 percent on individuals earning over $150,000, and on couples earning over $250,000 when filing jointly — a tax increase of $2.1 billion. He’s also agreed to raise Minnesota’s minimum wage to $9.50 an hour by 2018, and passed a state law guaranteeing equal pay for women. [...] By late 2013, Minnesota’s private sector job growth exceeded pre-recession levels, and the state’s economy was the fifth fastest-growing in the United States. Forbes even ranked Minnesota the ninth best state for business...."
Theoretically speaking, practically speaking, academically speaking, Democratic policies will always result in greater economic growth. Democrats support policies which support modern economic thought as best we know today: Keynesian economics which is taught in virtually all macroeconomic courses. If you understand most of the fundamental ideas in which he advocated for while doing research then you'll see why. Unfortunately most people don't understand. Macroeconomics does not judge based on fairness, it judges based on the economy as a whole, which is the point of the government anyways.
Here's 1 example:
GDP (Gross Domestic Product) is defined by:
GDP = C + I + Nx + G where,
C = consumption
I = investment
Nx = Net exports (Exports - Imports)
G = government expenditures
The US's GDP is somewhere in the 18T range. So by this definition, if we have a recession GDP goes down. Therefore, if GDP goes down, a majority of the loss will be in C, (consumers spend less due to losing their jobs). So to keep the economy floating or at least offset the losses, there's only 1 controllable factor in that equation that can do so, G, government expenditure ("stimulus package"). Hence why it's needed, not optional or else a recession will keep getting worse. Various methods of providing a stimulus package includes: unemployment benefits, infrastructure projects, and public works projects.
This is just 1 concept, but there's many various concepts in marcoeconomics that studies the impact of fiscal policy and the effect on the overall economy and people ought to understand that first, rather than only think about themselves, their neighbors, or what they see first hand. That almost always doesn't work as it's just an anecdote.
One of the best arguments, because it is not specific to a topic, is actually a general observation: people become more conservative as they get older. Even as a teen, I was troubled by knowing this from extensive reading. I knew that people gain more knowledge and experience as they aged; so the more you know, the more likely you are to be conservative.
There are quite a few theories about this. I suspect the correlation mainly stems from a tendency for older people to become more "stuck in their ways" and, of course, they tend to have more wealth, so they are more likely to vote for "lower taxes" which translates in fiscal conservatism. Personally, I think I have become more liberal as I have aged.
Here are a couple of interesting articles on the topic:
Quote: "In fact, older people are better able to rely on knowledge, experience and expertise, so they are not as affected by slower information-processing capacity. However, in order to retrieve knowledge more efficiently it is essential that they economize thinking, and seeing things in more categorical or “black-or-white” terms does make for more frugal and efficient thinking. In line, a review of 88 studies in 12 countries shows that older people are generally less tolerant of ambiguity, and have a higher need for closure and structure. This is often manifested by their stronger set of principles and rules, and a tendency to dismiss information that conflicts with their views. In addition, older people are also more likely to make categorical judgments about events, things, or people."
“He who is not a républicain at twenty compels one to doubt the generosity of his heart; but he who, after thirty, persists, compels one to doubt the soundness of his mind.”
Quote:
Originally Posted by FirebirdCamaro1220
How do you explain my relatives who are senior citizens yet still liberal?
Oh wow, you walked right into that one... Could it be, just maybe because the soundness of their minds is in doubt?
The US economy is shaped by global and domestic events, which are inconsistent across presidential administrations.
Certainly true. And some references were made to this in the third article.
I find it interesting that no one has so far attempted to refute my general impression. For the moment I'm thinking that maybe we will be able to focus on the second part of the question, namely: Why the correlation? If the US economy is shaped by global and domestic events, why do Democrats keep getting the benefits of the economic upswings? Again, the 3rd article suggested this might be mostly due to luck, although they also point to some mysteries that are yet to be solved. Personally, I still find myself suspecting that at least some of the mystery factors are probably related to economic policy - perhaps, for example, this serves as evidence that the "trick-down" principle does not actually work?
We are all entering a phase in which we must all place our bets - like it or not - on whether or not the historical trend will continue. Are we due for another coincidental downturn of the economy? Trump is a whacky wild-card in a great many respects, but from what I've seen, he does seem to be fully committed to the trick-down concept. Wealthy people will get to keep more of their money, thanks to Trump. If my "theory" (more of a mere idle surmising, really) is correct, then the enhancement of trickle-down economics will, once again, be correlated with an economic downturn. Until someone can show me good evidence for believing otherwise, I am inclined to think the connection is causal. I.e., the trickle-down principle simply does not work very well. The top .01% will be very happy, but most of the rest of us will be lucky if we can simply keep scraping by with our double-income households, etc.
Last edited by Gaylenwoof; 02-04-2017 at 08:50 PM..
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