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The Plausible Solution: Just Win More
Whether the public sees Democratic demands for these structural changes as overdue or overreaching, the key point is that they are currently exercises in futility. The only plausible road to winning their major policy goals is to win by winning. This means politics, not re-engineering. They need to find ways to take down their opponents, and then be smarter about using that power while they have it.
They certainly have issues to campaign on. In the few weeks, we have learned that some of Americas wealthiest people have paid only minimal or no federal income tax at all. Even as the Wall Street Journal editorial writers were responding to a Code Red emergency , the jaw-dropping nature of the reportfollowed by a New York Times piece about the impotence of the IRS to deal with the tax evasions of private equity royaltyconfirmed the folk wisdom of countless bars, diners, and union halls: the wealthy get away with murder.
Of course this is a whole lot easier said than done. A political climate where inflation, crime and immigration are dominant issues has the potential to override good economic news. And 2020 already showed what can happen when a relative handful of voices calling for defunding the police can drown out the broader usage of economic fairness.
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What Is A Recession
A recession is generally defined as two consecutive quarters of declining GDP, or gross domestic product, a monetary measure of the market value of all the final goods and services produced during a;specific time period.
The definition originated in a New York Times article in;1974;by Julius Shiskin,;a professor of economics and statistics at Rutgers University who;also served as head economist of the War Production Board from 1942-45.
His article included a number of other economic elements that would contribute to a recession,;such as a decline in industrial production over a six-month period and a 1.5% decline in nonagricultural employment.;Those have largely fallen away over the years, leaving the two down quarters as the definition.
The National Bureau of Economic Research , which describes itself as;”a private, nonprofit, nonpartisan organization dedicated to conducting economic research and to disseminating research findings among academics, public policy makers, and business professionals,” uses other criteria.
It;defines a;recession as;”a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”
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Study: Economy Grows Faster Under Democratic Presidents Than Republicans
The U.S. economy has grown far more rapidly under Democratic presidents than under Republican presidents since World War II — but why?
A paper released Tuesday by the National Bureau of Economic Research seeks to answer that question.
The analysis arrived at a timely moment, given Wednesday’s report that the American economy grew at a rate of 4.0 percent between April and June this year, beating forecasts and putting a pep in the step of Democratic officeholders.
But before Democrats begin cutting triumphant campaign ads, they should consider another of the paper’s findings: while the GDP has seen greater increases under Democrats than Republicans, that fact appears to have little to do with the specific policies enacted under each president.
“The U.S. economy not only grows faster, according to real GDP and other measures, during Democratic versus Republican presidencies, it also produces more jobs, lowers the unemployment rate, generates higher corporate profits and investment, and turns in higher stock market returns,” wrote Princeton economists Alan Blinder and Mark Watson. “Indeed, it outperforms under almost all standard macroeconomic metrics.”
It’s a startling piece of top-line analysis, but a closer look reveals a far more complicated picture.
Democratic Presidents Are Better For The Stock Market And Economy Than Republicans One Study Shows
- Contrary to popular belief, the stock market and economy have performed better under Democratic presidents than it has under Republican presidents, according to data going back to 1946.
- Liberum, a UK-based investment bank, pointed to historical stock market returns and annual GDP growth to make the case that a Republican president’s drive to cut taxes and reduce government spending often leads to lower economic expansion and stock market returns than when a Democratic president is in office.
- Since 1947, the S&P 500 has posted a total annual return of 10.8% under Democratic presidents, versus 5.6% under Republican presidents.
- And if you exclude the Great Recession and COVID-19 pandemic, both of which happened under a Republican president, the data still points to stronger returns for Democratic presidents versus Republican presidents.
- Visit Business Insider’s homepage for more stories.
It’s a widely held view that Republican presidents are better for the economy and stock market than Democratic presidents, because of their drive to cut taxes and reduce government spending. But the data says otherwise.
According to an August 21 note from Liberum, a UK-based investment bank, historical stock market returns and gross domestic product data points to a stronger economic expansion under Democratic presidents than under Republican presidents.
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Economies Under Gop Presidents
Real GDP growth, a measure of economic activity in the U.S., averaged 3.33% during the 64 years and 16 presidential terms going back to the mid-1940s, according to a 2013 research paper by professors of economics Alan Blinder and Mark Watson at Princeton University. With a Republican in the White House, though, the economy’s growth slowed to 2.54%, the economists found. With a Democrat in office, growth jumped to 4.35% on average.
A variety of other economic indicators, such as per capita GDP, stock market returns, real wages and the change in the unemployment rate, are also more robust with a Democratic president, the economists found. Unemployment fell by 0.8 percentage points with a Democratic president on average, while it rose 1.1 percentage points;with a Republican, according to Blinder and Watson.
“The U.S. economy has performed better when the president of the United States is a Democrat rather than a Republican, almost regardless of how one measures performance,” according to the report titled “Presidents and the Economy: A Forensic Investigation.”
Academics and market historians are trying to figure out why the economy tends to perform less robustly with a Republican president.;Research offers a few suggestions, including:
The result: “No statistically significant advantage for either party in the White House.”
Leading indicators like housing starts, consumer confidence and the Conference Board’s Leading Economic Index don’t signal a looming recession now.
Whos Better For The Economy: Democrats Or Republicans
Who does a;better job at;managing the;American economy: Democrats or;Republicans?
Whose policies help the;country and whose policies hurt it? Who should get credit when things are going well and who should take the;blame when the;economy slips?
But before we use the;EPI to;answer the;question, we have to;figure out how to;measure the;problem. It is;impossible to;break down every piece of;legislation to;see how it affected the;performance of;the;overall economy. We can examine a;few key policies, but that doesnt really answer whether one political party does a;better job altogether; it only sheds light on;that particular piece of;legislationone small piece of;a;very big puzzle.
So how do we measure the;effectiveness of;one partys politics?
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Democrats Think Many Republicans Sincere And Point To Policy
Democrats, however, were somewhat more generous in their answers.;;More than four in ten Democratic voters ; felt that most Republican voters had the countrys best interests at heart . ;And many tried their best to answer from the others perspective. A 45-year-old male voter from Ohio imagined that as a Republican, he was motivated by Republicans harsh stance on immigration; standing up for the 2nd Amendment; promised tax cuts.;;A 30-year-old woman from Colorado felt that Republican votes reflected the desires to stop abortion stop gay marriage from ruining our country and give us our coal jobs back.
Other Democrats felt that their opponents were mostly motivated by the GOPs opposition to Obamacare, lower taxes and to support a party that reduced unemployment.;
A President Doesnt Really Matter For Investment Returns
The main lesson of this article is that a Democrat or Republican president doesnt really affect your investment returns. As there are so many variables that influence the S&P 500s index performance, who is president is not a significant factor.
The same thing goes for the CEO of a large publicly-traded company. If Tim Cook at Apple retired tomorrow, do you think the event would make a difference in Apples share price? There might be a knee-jerk move for one or two days, but after that, it would be back to business as usual. As a result, if you want to get rich, your goal is to try and become an overpaid CEO.
Instead of voting for a president who you think will be best for your investments, vote for a president who you think will do the most good for the most number of people. A country begins to rot if only some people get way ahead while others are left behind.
Since 2009, Ive been driven to try and help people improve their financial lives no matter who they are or who they vote for. Ive found that people who are more financially secure are nicer and happier people. More good comes out of the world as a result.
I dont believe only the rich, powerful, and connected and their children should get ahead. Theyve already got all the resources in the world that money can buy. Therefore, Financial Samurai will continue to be free for as long as Im alive.
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Which Party Is Better For The Economy
Princeton University economists Alan Binder and Mark Watson argue the U.S. economy has grown faster when the president is a Democrat rather than a Republican. “The U.S. economy not only grows faster, according to real GDP and other measures, during Democratic versus Republican presidencies, it also produces more jobs, lowers the unemployment rate, generates higher corporate profits and investment, and turns in higher stock market returns,” they write.
However, rather than chalking up the performance difference to how each party manages monetary or fiscal policy, Binder and Watson said Democratic presidencies had benefitted from “more benign oil shocks, superior performance, a more favorable international environment, and perhaps more optimistic consumer expectations about the near-term future.”
Historically The Stock Market Performs Better Under Democrats
Its a commonly held belief that the stock market and economy perform best under a Republican president, thanks to the GOPs corporation-friendly approach to taxes and government spending. But a look at the numbers shows the opposite is true.
The historical record and the research on the divide between stock market performances assessing Democrat and Republican administrations is clear, said Mark Hamrick, senior economic analyst at Bankrate. Investors have seen more generous returns from equities when Democratic presidents were in the White House, going back to 1945.
Analysis by CFRA Research found that since 1945, the S&P 500 has averaged an annual gain of 11.2% when Democrats controlled the White House, versus an average 6.9% gain under Republicans.
A study by Liberum, a U.K.-based investment bank, found similar results. The firm examined stock market and gross domestic product data going back to 1947, when official GDP calculations were introduced. It found that since 1947, the S&P 500 experienced an annual return of 10.8% under Democratic presidents, versus 5.6% under Republican presidents. The average annual U.S. GDP growth rate was 3.6% under Democrats and 2.6% under Republicans.
Even if you exclude the Great Recession and COVID-19 pandemic both of which occurred while a Republican was in office the data still shows stronger performance when Democrats occupied the White House.
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Here’s How The Deficit Performed Under Republican And Democratic Presidents From Reagan To Trump
This article was updated Aug. 2 to include a graph with the annual federal deficit in constant;dollars.
A viral post portrays Democrats, not Republicans, as the party of fiscal responsibility, with numbers about the deficit under recent presidents to make the case.
Alex Cole, a political news editor at the website Newsitics, . Within a few hours, several Facebook users postedscreenshots of the tweet, which claims that Republican presidents have been more responsible for contributing to the deficit over the past four decades.;
Those posts racked up several hundred likes and shares. We also found a screenshot on Reddit, where it has been upvoted more than 53,000 times.
“Morons: Democrats cause deficits,” the original tweet reads.
Reagan took the deficit from 70 billion to 175 billion. Bush 41 took it to 300 billion. Clinton got it to zero. Bush 43 took it from 0 to 1.2 trillion.Obama halved it to 600 billion. Trumps got it back to a trillion.Morons: Democrats cause deficits.
Screenshots of the tweet on Facebook were flagged as part of the companys efforts to combat false news and misinformation on its News Feed.
At PolitiFact, wevereportedextensively on how Republicans and Democrats often try to pin the federal deficit on each other muddying the facts in the process. So we wanted to see if this Facebook post is true.
Some people confuse the federal deficit with the debt ;but theyre two separate concepts.
Biden Is Inheriting A Wrecked Economy But Democrats Have A Record Of Avoiding Recession And Reducing Unemployment
Since Eisenhower assumed presidency;in 1953, the economy measured by GDP, unemployment, inflation & recessions has done better;under Democrats
What can the country expect?
Forecasting how the economy will perform under a new president is generally a fools errand. How much or how little credit the person in the White House deserves for the health of the economy is a matter of debate, and no economist can confidently predict how the presidents policies will play out if they even go into effect or what challenges might emerge.
Regardless, voters tend to believe it makes a difference. And going into the election, 79 per cent of registered voters and 88 per cent of Donald Trump supporters said the economy was their top concern. 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.
Inheriting a struggling economy;
Biden inherits an economy with serious problems. Things have improved markedly since last spring, but the economy remains in a dire state.
And that doesnt yet include the impact of what some officials including Biden have dubbed a dark winter, as severe coronavirus outbreaks in many regions of the US have prompted new economic restrictions.
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Stock Market Performance Under A Democratic Or Republican President
Updated: by Financial Samurai
Let us take a look at the historical stock market performance under a Democratic or a Republican President. The annualized S&P 500 return by President is quit consistent over history.
Before finding out the answer, Id like you to guess under what party do you think the S&P 500 has performed the best? From there, we can compare the reality with your beliefs.
After all, one of the keys to being a good stock investor is to remove as much bias from your investing process as possible. It is suboptimal to invest on emotion.
For example, I know several people who decided to sell a majority of their stock holdings in 2016 once Donald Trump won the election. They hated Donald Trump. As a result, they missed out on over 50% in S&P 500 gains.
Why Are Republican Presidents So Bad For The Economy
G.D.P., jobs and other indicators have all risen faster under Democrats for nearly the past century.
Graphics by Yaryna Serkez
Mr. Leonhardt is a senior writer at The Times. Ms. Serkez is a writer and graphics editor for Opinion.
Annual growth rate
Annual growth rate from highest to lowest
Annual growth rate from highest to lowest
A president has only limited control over the economy. And yet there has been a stark pattern in the United States for nearly a century. The economy has grown significantly faster under Democratic presidents than Republican ones.
Its true about almost any major indicator: gross domestic product, employment, incomes, productivity, even stock prices. Its true if you examine only the precise period when a president is in office, or instead assume that a presidents policies affect the economy only after a lag and dont start his economic clock until months after he takes office. The gap holds almost regardless of how you define success, two economics professors at Princeton, Alan Blinder and Mark Watson, write. They describe it as startlingly large.
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Reality Check : Biden Cant Be Fdr
Theres no question that Biden is swinging for the fences. Beyond the emerging bipartisan infrastructure bill, he has proposed a far-reaching series of programs that would collectively move the United States several steps closer to the kind of social democracy prevalent in most industrialized nations: free community college, big support for childcare and homebound seniors, a sharp increase in Medicaid, more people eligible for Medicare, a reinvigorated labor movement. It is why 100 days into the administration, NPR was asking a commonly heard question: Can Biden Join FDR and LBJ In The Democratic Party’s Pantheon?
But the FDR and LBJ examples show conclusively why visions of a transformational Biden agenda are so hard to turn into reality. In 1933, FDR had won a huge popular and electoral landslide, after which he had a three-to-one Democratic majority in the House and a 59-vote majority in the Senate. Similarly, LBJ in 1964 had won a massive popular and electoral vote landslide, along with a Senate with 69 Democrats and a House with 295. Last November, on the other hand, only 42,000 votes in three key states kept Trump from winning re-election. Democrats losses in the House whittled their margin down to mid-single digits. The Senate is 50-50.