Just to review an older idea of mine, in determining how to
evaluate an economy. Technological and
worldwide events are the largest factors, but we all unreasonably ignore
those. As for the politics, the
composition of Congress has about twice the weight as the occupant of the White
House. Changes in either can do a great
deal to change perceptions in the populace, however, which in turn creates
changes in the economy. Confidence
matters.
Then, an 18-24 month delay should be applied between dates
of taking office and practical changes.
Legislation takes time, and even executive orders don’t play out
immediately.
Feel free to disagree, but I think this gives a clearer
picture of what’s happening than our usual tracking of the economy from the day
our public servants took office (or even the day they were elected!) until the
day they left.
5 comments:
Somebody quipped that Regan's best decision was having a recession early in his term.
Having a Republican Congress helped Clinton's economic performance considerably, and a number of positive indices often attributed to Obama (deficit reduction most prominently) were also the result of the GOP winning the House and stymieing his urge to spend.
I'll agree that the fullest effects of actual legislation and executive orders are probably delayed a year or more. Election results can change expectations pretty abruptly, however, which I think happened in 1994 and again in 2006. In any case those swings at least magnified trends that were already occurring.
Technological and worldwide events are the largest factors, but we all unreasonably ignore those.
EXACTLY.
I would never deny that government policies don't effect the economy but to the extent it does, our present economy is effected by decisions made 50 years ago, 5 years ago, 5 months ago, 5 weeks ago yada,yada. Decisions made in one administration bleed over into the next one or more. I think it is very difficult to untangle who is responsible for what. I don't know who is responsible for the notion that the president or that government controls the economy but I think of it as a scam.
I thought "scam" was a bit much at first, but upon further review, I think that's pretty close.
AVI You are right. Scam is not the ideal choice, to the degree it implies intent to deceive. I suppose many in the political, academic, and media class, actually believe the government can control the economy. I guess "sales gimmick", as it might apply to a political campaign, would be a better description.
Heh. Did you see the news story that one email system's security identified Bernie Sanders' campaign mail as a possible phishing scam, because of the free stuff it promised?
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