During an economic downturn politicians often have very heated arguments about the best way to approach the problem. This made us curious about how effectively the economic policies of previous presidents might have dealt with these situations. In 2009 we began researching the issue and compiled some statistics. Our goal was to create a long-term view of the economy, using the metrics that everyone brings up to show how good (or bad) things are going. These are: unemployment and job creation, gross domestic product (GDP) growth, inflation, the deficit, and tax receipts. This would let people put numbers to common questions such as, “What was happening” and “How did we get that way”.
The Bureau of Labor Statistics and the Bureau of Economic analysis have been compiling economic data for decades, and whenever possible we have taken the data directly from their website. For data on national debt and federal receipts, our source is the St. Louis Federal Reserve. The data measures economic growth since World War II, although data from the depression have also been included when possible. (Source websites are available on each graph.)
In general, the data are presented chronologically based on presidential terms. There are two reasons for this. First, there is a lot of variation in numbers from quarter to quarter and month to month, but most people operate on longer economic horizons than that—a bad month generally affects only short-term investors, but two bad years make most people question their economic security. A four-year term is a pretty good reflection of this and certainly averages out most of the fluctuations.
Second, there is perhaps no single person who receives more popular credit (good and bad) for the economy than the President of the United States. Thus, “Reaganomics”, the “Carter Inflation”, the “Bush Tax Cuts”, and so on. This is not completely unreasonable, since the president has much more power than anyone else, and probably more even than the entire legislative branch, to set economic policy and priorities. So this method of presenting data allows us to ask whether the president really is in control of the economic outcome, and if so, how.
Note that for these purposes Kennedy/Johnson and Nixon/Ford were combined, since Johnson finished Kennedy’s first term and Ford finished Nixon’s second term. For this analysis, we assumed Ford and Johnson continued the economic policies of their predecessors.