{"id":274553,"date":"2020-11-08T05:17:54","date_gmt":"2020-11-08T10:17:54","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=274553"},"modified":"2020-11-08T05:17:54","modified_gmt":"2020-11-08T10:17:54","slug":"why-republicans-and-others-concerned-about-the-economy-have-reason-to-celebrate-biden-in-the-white-house","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2020\/11\/08\/why-republicans-and-others-concerned-about-the-economy-have-reason-to-celebrate-biden-in-the-white-house\/","title":{"rendered":"Why Republicans and others concerned about the economy have reason to celebrate Biden in the White House"},"content":{"rendered":"
\"\"<\/a>
Biden will be inheriting an economy with serious problems. Things have improved markedly since the darkest days \u2013 at least, so far \u2013 of the pandemic back in the spring, but the economy remains in a dire state. (File photo: Ryan De Hamer\/Unsplash)<\/figcaption><\/figure>\n

On day one, a newly inaugurated President Joe Biden<\/a> will have to address a devastated economy \u2013 much like he and former President Barack Obama did<\/a> a decade ago.<\/p>\n

What can the country expect?<\/p>\n

Forecasting how the economy will perform under a new president is generally a fool\u2019s errand. How much or how little credit<\/a> the person in the White House deserves for the health of the economy is a matter of debate<\/a>, and no economist can confidently predict how the president\u2019s policies will play out \u2013 if they even go into effect \u2013 or what challenges might emerge.<\/p>\n

Regardless, voters tend to believe<\/a> it makes a difference. And going into the election, 79% of registered voters \u2013 and 88% of Trump supporters \u2013 said the economy was their top concern<\/a>. Given that, historical data suggests that those who are concerned with the economy have reason to be fairly satisfied with the election results: The economy generally fares better under Democratic presidents.<\/p>\n

Inheriting a struggling economy<\/h2>\n

Biden will be inheriting an economy with serious problems. Things have improved markedly since the darkest days \u2013 at least, so far \u2013 of the pandemic back in the spring, but the economy remains in a dire state.<\/p>\n

The latest jobs report shows that 11 million people remain unemployed<\/a> \u2013 a third of whom have been without a job for at least 27 weeks \u2013 down from a peak of 23 million in April<\/a>. Tens of thousands of small businesses<\/a> and dozens of major retail chains<\/a> have closed or filed for bankruptcy. Many states, cities and municipal agencies are reeling from the tremendous costs of spring lockdowns. And the economy has contracted 2.8%<\/a> since the end of 2019.<\/p>\n

And that doesn\u2019t include the impact of what some officials<\/a> \u2013 including Biden \u2013 have dubbed a \u201cdark winter,\u201d as severe coronavirus outbreaks in many regions of the U.S. prompt new economic restrictions.<\/p>\n

Democrats have a better economic track record<\/h2>\n

In trying to get a sense of what kind of impact the election result will have on the economy, the past is a useful guide.<\/p>\n

I study how the economy performs depending on which political party is in charge. Earlier this year, I did an analysis<\/a> of this question, focusing on 1976 to 2016, and recently updated the data to include 1953 through October of this year.<\/p>\n

In general, since President Dwight D. Eisenhower took office in 1953, the economy \u2013 as measured by gross domestic product, unemployment, inflation and recessions \u2013 has typically performed better with a Democrat in the White House. GDP growth has been significantly higher; inflation \u2013 a measure of the change in prices \u2013 has been lower; and unemployment has tended to fall.<\/p>\n

The stock market tends to perform better with a Democratic president, rising 11% per year on average compared to 6.8% for Republicans. Despite his claims to the contrary<\/a>, the stock market\u2019s performance under President Donald Trump has been about average<\/a>.<\/p>\n

Perhaps the most striking difference I found is in the number of months the economy was in recession, as determined by the National Bureau of Economic Research<\/a>. From 1953 to 2016, Republicans controlled the White House for 432 months, about 23% of which were spent in recession. Democratic presidents held the reins for 336 months in that period, just 4% of which were in recession. The 2020 recession began in March has not been officially declared over.<\/p>\n

One suggested explanation for this dramatic difference is that deregulation implemented during Republican administrations<\/a> leads to financial crises, which in turn cause recessions. Another is that factors a president does not have any control over, like a sudden increase in oil prices<\/a>, are the usual causes of recessions. Others suggest that the economy\u2019s better performance under Democrats is simply due to luck<\/a>.<\/p>\n

So even though voters tend to think Republicans<\/a> do a better job steering the economy, historical data shows otherwise. Whether Biden continues that streak, of course, remains to be seen, especially given he\u2019ll likely have<\/a> a Republican-controlled Senate, which could frustrate his policy initiatives.<\/p>\n

A silver lining in divided government<\/h2>\n

In my analysis, I also examined the impact of Congress and how having all, part or none of the legislative branch controlled by the president\u2019s party affected the economy\u2019s performance.<\/p>\n

Interestingly, the U.S. has not seen Democrats in control of the White House<\/a> and the House of Representatives<\/a> with Republicans in charge of the Senate<\/a> since 1889, when Grover Cleveland was president. So my dataset, going back to 1953, doesn\u2019t shed any light on this particular legislative configuration.<\/p>\n

However, I did find that the economy did pretty well when a Democratic president faces either one or both houses of Congress controlled by the opposition. During the 144 months when one of those conditions were true, the U.S. was never in recession. And when Republicans controlled Congress under a Democratic president, average monthly unemployment was the lowest of any condition, at 4.85%.<\/p>\n

Of course, this doesn\u2019t mean a divided government will lead to good results today. A pessimistic take is that there will be gridlock<\/a>, and nothing will get done. In order to pass and sustain major initiatives<\/a>, bipartisanship will be needed.<\/p>\n

There\u2019s an off chance that Democrats take control of the Senate<\/a> if two runoff elections scheduled for January in Georgia both fall into the Democrats\u2019 column. Historically, such a Democratic trifecta<\/a> existed for 192 months, 14 of which \u2013 7% \u2013 were in recession.<\/p>\n

[Expertise in your inbox. Sign up for The Conversation\u2019s newsletter and get expert takes on today\u2019s news, every day.<\/a><\/em>]<\/p>\n

Tough road ahead<\/h2>\n

History also has a lot to say about recovering from an economic collapse, which keeps taking longer.<\/p>\n

For example, it took only 11 months for the job market to recover from the 1980 recession, but 77 to recover the jobs lost in the Great Recession that lasted from 2007 to 2009. If this trend continues, it could be 2027 or later before the job market fully recovers from the pandemic-induced recession.<\/p>\n

But the past doesn\u2019t predict the future, and I believe the policies a president pursues and is able to implement still matter.<\/p>\n

During the campaign, Biden proposed several ambitious spending plans<\/a>, such as \u201cbuild back better,\u201d which would invest in American infrastructure and clean energy, as well as \u201cbuy American.\u201d In all, Biden has proposed US$2 trillion to $4.2 trillion<\/a> of additional measures to fight the pandemic\u2019s economic effects, according to an analysis by the nonpartisan Committee for a Responsible Budget.<\/p>\n

His economic plan cannot be implemented without the cooperation of Congress. Investment in infrastructure has historically had bipartisan support<\/a> so Biden and Senate Majority Leader Mitch McConnell may find some common ground there. But although McConnell has indicated fiscal relief will be a top priority<\/a>, he has opposed another large coronavirus bill.<\/p>\n

It\u2019s impossible to predict whether Republicans will choose bipartisanship or obstructionism<\/a>, but I remain hopeful \u2013 given Biden\u2019s history of moderation<\/a> \u2013 that the new president and Congress will do what is needed to move the economy forward.\"The<\/p>\n

William Chittenden<\/a>, Associate Dean for Graduate Programs and Presidential Fellow, Texas State University<\/a><\/em><\/p>\n

This article is republished from The Conversation<\/a> under a Creative Commons license. Read the original article<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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