DANCING NEBULA

DANCING NEBULA
When the gods dance...

Friday, November 2, 2012

FDR’s economic policy: top of class


Presidents who have been good for the economy tend to belong to pro-business political parties, while presidents with below average economic performance often belong to parties that are relatively pro-farmer, pro-laborer, or pro-consumer. (Credit: Wikimedia Commons)

GEORGIA TECH (US) — A newly-released report card that grades presidents on their economic performance names Franklin D. Roosevelt class valedictorian.

Other presidents receiving A grades are Warren G. Harding, William Rutherford B. Hayes, and William McKinley. Founding father George Washington still makes the honor roll with an A-. John Adams, Harry Truman, and John F. Kennedy rank slightly lower in the A-/B+ range.

The best rated recent presidents are Bill Clinton and Ronald Reagan—both receiving a B.

“Put simply, if ‘it’s the economy, stupid,’ then we need to make stronger efforts to properly judge economic performance and to assign credit and blame where they are most deserved,” says Mark Zachary Taylor, assistant professor in the Sam Nunn School of International Affairs at Georgia Institute of Technology (Georgia Tech). “These rankings are meant to constitute a scientific step in this direction.”

Taylor analyzed data from the Measuring Worth Project at the University of Illinois at Chicago. He then graded presidents individually using the traditional A-F (4-0 point) scale based on how well each performed in eight economic areas such as unemployment, inflation, interest rates, stock market returns. and currency strength.

Taylor used multiple and competing statistical measurements, ranking algorithms and time lags to ensure the data was unbiased. No historical or ethical judgments were used to adjust the findings.

The objective approach yielded some surprises, such as the high ranking of presidents who traditionally have been poorly regarded–Harding, Hayes, and Millard Fillmore. Also some national heroes—Abraham Lincoln, James Madison, John Quincy Adams, and Andrew Jackson—each receive a D for poor economic performance.

“It makes sense when you dig into the history,” Taylor says. “In the case of Lincoln, to fight a war, you have to print money and go into debt. That’s bad for the economy in the long run, but sometimes there are more important things than the economy, such as staying united as one nation.”

The study found correlations between the characteristics of presidents and their economic performance. Presidents who have been good for the US economy tend to belong to pro-business political parties, work with a Congress in which only one house is dominated by their same party, serve during wartime, and were raised in middle-class environments.

Presidents with below average economic performance often belong to parties that are relatively pro-farmer, pro-laborer, or pro-consumer. They tend to enter a single-party federal government in which one congressional house flipped parties, and they typically were raised in lower-class environments, the research shows.

Interestingly, presidential economic performance did not correlate with the person’s pre-political career, birth order, historical “greatness,” or whether he was a “dark horse” versus a well-vetted president.

The findings refer to the past performance of a group and can’t be applied to the 2012 election to predict whether Republican nominee Mitt Romney or President Barack Obama will be better for the economy. President Obama’s first term wasn’t included in the study because it’s not complete and the data won’t be available until 2015.

What the research does suggest is that a president can affect the economy, even though the executive branch may appear on paper to have a limited role.

“It is tempting to dismiss these rankings as the product of dumb luck: getting elected at the top or bottom of the business cycle,” Taylor says. “Randomness surely plays some role in these rankings, but presidents also bear responsibility for making their own luck.”

Source: Georgia Tech

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