Never confuse correlation with causation.
The economy is (finally) growing and President Biden is claiming credit. But how much credit (or blame) does any president deserve for the business cycle?
It turns out that the economy’s jobs performance during a given presidency is determined more by the state of the economy inherited on Inauguration Day than on any subsequent presidential policy. Presidents who inherit recessions typically end up with strong job growth, while presidents who inherit booming economies typically end up with sluggish job growth and even recessions. This pattern—paired with the fact that voters have consistently elected and reelected Republicans during booms, and then swapped in Democrats during recessions—explains the misperception that Democratic presidents are better than Republicans at managing the economy.
Let’s unpack this by taking those points in reverse. We often hear that 10 of the past 11 recessions began during Republican presidencies, and that more jobs are created during Democratic administrations. Case closed: Democrats manage the economy better, right?
Continue reading the entire piece here at The Dispatch (paywall)
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Brian M. Riedl is a senior fellow at the Manhattan Institute. Follow him on Twitter here.
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