The Best Presidents for the Economy

We're not far away from the presidential election. You will inevitably hear over the coming days that this will be one of the most important elections of our lifetimes. I'm not sure that's the case. One of my favorite election quotes comes from bank lobbyist Andrew Lowenthal: "Every election I've ever been involved with has been 'the most important election in history.' At some point, it's not. It's just the path of history."

In general, presidents get too much credit for the economy when things are good, and too much blame when things are poor. We tend to imagine every blip in the stock market and every unemployment report as a direct reflection of a president's policies -- particularly during election years. In reality, Congress and the Federal Reserve probably have just as much, if not more, sway over the economy than any president. And one president's policies can spill over into the next administration, making it difficult to sort out who is liable for what. We have a hard enough time accurately measuring what the economy is doing, let along assigning responsibility for its moves.

Still, everyone should know a little economic history. And the cleanest way to get a feel for how the economy has done under past presidents is to just lay the numbers bare.

Here are five economic variables going back to 1900, covering every president from Teddy Roosevelt to Barack Obama.

1. Stock market performance
This is the inflation-adjusted, dividend-adjusted, performance of the S&P 500:

A word here: Corporate profits were incredibly depressed from the financial crisis in January 2009, when President Obama entered office. That low starting point makes growth through today look massive. If, instead of January 2009, you use January 2008 profit levels as a starting base, average annual corporate profit growth under President Obama is 6.8%.

3. Real GDP per capita
This measures growth of the entire economy adjusted for the size of the population:

Another note here: World War II spending was near a peak when President Roosevelt passed away in 1945, boosting the economy and annual growth. Real GDP fell 12% between 1945 and 1947 as wartime spending tapered off.

5. Unemployment rate
This is the change in the unemployment rate during presidential terms (or through September for President Obama), measured in percentage points. Unemployment is measured by a yearly average before 1955; after, it is measured on a monthly basis.

What a stupid set of analyses!

Where’s average unemployment rate (calculated on a consistent basis reflect the participation rate)?

Where is change in median/mean family income?

Where are measures of debt accumulation?

Just as a starting point...

re: In general, presidents get too much credit for the economy when things are good, and too much blame when things are poor.

I agree with that statement. In general, it is true, especially when a president has a more laissez faire approach. However, with Obama, I can think of numerous areas where he has negatively impacted our economy, and not one where he has improved it. Here are a few: His takeover of health-care will not make things better and is causing major disruption in businesses across our country, with many going out of business or planning to do so because they can't afford Obamacare. His vetoing of the Keystone Pipeline and shutdown of oil and gas jobs while throwing away billions of dollars of “stimulus” money to his donors in green energy has not improved our economy and has not made us any closer to energy independence than when the man took office. His attack on the private sector (which he claims is doing just fine) while he builds the public sector, has been devastating to our economy. Obama kills businesses right and left while taking credit for any that survive or are established in spite of the hardships created by his administration. The trillions of dollars of debt he has incurred while borrowing from China is horrendous for our economy. Sure, one can compile a few selective stats to prop up Obama, but the truth is, he has been a disaster for America.

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