[FoRK] John Robb on why Presidents matter economically

jbone at place.org jbone at place.org
Thu Feb 26 11:24:29 PST 2004



>  This reporter [1] doesn't think Presidents matter when it comes to 
> the economy.  He looks at the economy as a mechanistic thing that 
> operates outside of politics.  How wrong that is.  The economy is 
> driven by psychology.  Optimism and confidence breeds investment in 
> the future.  This in turn creates growth, jobs, and wealth.  Bush 
> clearly hasn't inspired that confidence in the future (and the economy 
> reflects this).  Reagan and Clinton did inspire confidence despite all 
> of their faults.  Presidents matter.

+1.  I've been saying this all along.  The economy drowns out in the 
actions of individual consumers;  this is why consumer confidence is 
IMHO the most underutilized metric in economic modeling.  We assume 
that actors are rational --- but they're only rational on some kind of 
average basis, and as a group "we're" capable of massive irrational 
group-think.  (Cf. The Bubble. ;-)

And this very thing, IMHO, is responsible for the fact that you're 6x 
(based on last 35ish years of precedent) more likely for any given day 
to be recessionary under a GOP president than a Democratic president.  
Simple reason:  "conservatives" tend to peddle FUD more aggressively 
and more effectively.*  When a GOP executive has the bully pulpit, 
people spend more time in "fear" mode than "greed" mode.  Fear is 
counterproductive;  greed is productive.  History reflects this in our 
cycles of recession.

* Both try;  the GOP is more effective.  Give me ineffective 
Presidents.  Please.  ;-)



[1] http://www.washingtonpost.com/wp-dyn/articles/A3560-2004Feb24.html

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