This one Weird Trick Won’t Win Every Election

As I am wont to, I will respond to part of Ben Studebaker’s strategizing on the behalf of “the left”. His economic assertions in this piece simply do not match up with reality.

Let’s start with the core thing I’d like to pick apart. Studebaker offers this chart to show that FDR had mad growth:

us-presidents-gdp-growth1

But no. However he calculated growth rates, he made an error. A 31% annual growth rate implies that the economy was 33 times bigger when FDR died than when he took office—the data says that it did not quite triple. There are competing ways of calculating average growth so there will be differences between any given method, but they should never be off by a factor of 11. The numbers look off for about every president, though not proportionally. I did my own calculations, which differ from some others I found online, but are in about the same ballpark of most. For reasons that will become apparent, I included GDP per capita growth next to his metric. You can compare them here:

gdp-by-president
*Data for per capita GDP begins in 1947, so FDR is not listed here. **Truman’s per capita growth is inflated against his plain growth because 1946 is included in plain growth but not per capita growth. This is a significant difference because 1946 had a major recession due to normalization following the war.

FDR still does better, but its worth noting a few things:

First, FDR benefits from the exact epoch of economic history he was sworn in during. He reversed the misguided monetary policy of the proceeding administration. He deserves a kudos for this, but he was lobbed a softball. The rapid growth during that period was making up for bad policy; it is hard to suggest that it generalizes. What I’m saying is that a President who enters at such a low point will have an easier time generating high numbers. You can see this over the very long run in growth history:

long-run-us-gdp-per-capita-growth-1870-2011-in-logarithms

The huge pulse around the Great Depression illustrates that for the first half of his presidency, FDR was working with economic gravity. Not entirely by coincidence—again, this is not an FDR hitpiece—FDR entered when circumstances were most favorable to economic growth and he succeeded. Since Truman, and especially since LBJ, we see pretty stable growth regardless of who is in the White House. (At the very least, very different presidents and polices have gotten approximately the same results.)

Second, the greater part of the growth came during war mobilization. This too is complicated. This was a period of domestic shortages, rations, and generally tighter belts. (You had to have government issued coupons to buy sugar legally, for example.) To suggest that the wartime production numbers represent some kind of great prosperity for the American people is to read those numbers out of context. To be sure, I’m all for fighting Nazis, but let’s not imagine that workers were “enjoying” all those extra tanks and planes in the way they might enjoy, say, the increase in household appliances following the war.

Here again FDR benefits from the dates of his presidency. He died right before demobilization began in earnest, meaning that he missed the “hangover” that followed. Nonetheless, this saw the end of rations and more production ending up in American homes rather than distant battlefields. So while demobilization counts against Truman’s GDP numbers, Americans directly benefited. For perspective, from FDR being sworn in to Truman leaving, Americans saw 6.1% growth on average—good, but not overwhelmingly incredible. To put none too fine a point on it, the baseline economic conditions gave FDR a huge advantage and mobilization is something of a mirage anyway.

This, I think, shows the bigger problem with Studebaker’s analysis. To a point, the presidents are incomparable. They aren’t giving equal starting points and the same challenges throughout. Truman is probably low because because FDR was high; the economy really had to contract under him. If you zoom out and compare parties post-war, like I did a few weeks ago, you see a different set of patterns emerge:

demgop-growth

Most of difference in GDP growth over the years has come in the depth of recessions. Democrats have seen shallower contractions, suggesting—at least at a first pass—that democrats manage recession better. Above the 30th percentile of quarters, democrats and Republicans are effectively interchangeable on the matter of economic growth. This should make some intuitive sense. After all, we have an economic system based around market exchange and not the state and so actions by the state are going to have a secondary effect on economics. The fact that the exception seems to be in recession says that the state has a role to play in managing the health of markets.

The scale of the graph is a touch misleading, however. The median household makes about $50,000 a year, and they can expect their income to rise by $165 more if we elect a Democrat over a Republican; about $13.75 a month. This is…significant but not impressive. Obviously, you are not going to turn down $13.75 a month extra, all else equal. By the same token, you are not going to upend your political ideologies for what works out to be a chunk of change. Note for low income people, the numbers are even smaller. Down at the poverty line for a single person, we are talking $3.24 a month!

Getting away from the hard numbers, I take exception to this characterization:

Since World War II, no presidents have done better. The growth these Democrats delivered for white Americans made them comfortable and happy. This made it easier for more of them to see social justice movements in a non-threatening way. In 1964, Lyndon Johnson ran against a fiery, hard-right conservative–Barry Goldwater. But economic conditions were good, and so white people were much less receptive to Goldwater than they were to Trump. Johnson ended up winning 61% of the vote to Goldwater’s paltry 38%.

This is special pleading. The specifics here are basically correct, but it leaves open some questions. The high growth in Reagan’s presidency happened during a time when welfare was coded black (“welfare queen”) and saw it significantly rolled back. Reagan appointments and policies were hostile to minorities—especially sexual minorities, but also racial ones. This was a high water mark of anti-feminism. High growth ensured 12 years of Republicans in the White House and allowed a good deal of harmful, anti-social-justice policies to become entrenched. Despite Clinton’s high growth, there was not a substantial increase in welfare and he signed Don’t Ask, Don’t Tell. Growth and justice have only a tenuous relationship.

In  this context, his LBJ narrative is stylized. Dr. King and Malcolm X both wrote at length—to different conclusions—that white moderates were too comfortable to demand change. As I just pointed out, this played out again in the 1980s, but for various reasons no one was able to challenge Reagan like they were able to challenge LBJ and Congress. There is something to Studebaker’s analysis that economic comfort helped smooth over the changes to de jur treatment of African Americans when they went through in the 1960s, but it was not sufficient and not even clearly necessary in the 1980s.

These numbers are something of a Rorschach Test. You can see what you want in them. The long term trend of per capita growth suggests the way to get FDR levels of growth is to first have Hoover levels of Recession. We can probably keep it going if we arrange a World War, but eventually, rationing will unwind. Post-war production has largely kept apace of the historical trend regardless of state policy, with the important caveat that Democrats have recovered from recessions faster. His analysis of electoral history is cherry-picked and stylized beyond generalization. He’s probably right that growth under LBJ bought some political capital to affect change; the same was true under Reagan to literally the opposite end. Given that the numbers don’t suggest a huge difference between economic outcomes, this political capital was partially unearned in both cases.

Sadly, there is no magic bullet to win elections.

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