Your salary in 2016.

• Author: Drum, Kevin
• Position: THE STAKES 2008

During his acceptance speech at Invesco Field in August, Barack Obama earned big applause for a line that compared Democratic and Republican economic policies. "We measure progress," he told the partisan crowd, "in the twenty-three million new jobs that were created when Bill Clinton was president--when the average American family saw its income go up $7,500, instead of go down $2,000, like it has under George Bush."

As rhetoric, it was effective. But was it a fair point, or a cheap shot? It's true that the Bush expansion was one of the weakest economic recoveries in postwar history, but can you really lay the blame for that at the feet of the president? Isn't it the case that, ritual campaign promises to the contrary, presidents actually have very little influence on the economy?

The conventional wisdom among economists says yes, but a growing mountain of historical data suggests that they may be wrong. In the postwar era, it turns out, Democratic presidents consistently produce higher growth rates, lower unemployment, better stock market growth, and less income inequality than Republican presidents. Nobody quite knows why, but the results are surprisingly robust.

Within the economics profession this topic is known as the study of "political business cycles," and I first became interested in it ten years ago, before the dot-com boom of the Clinton era and the weak recovery of the Bush era. Even back then the data was clear. Add up growth rates under Democratic administrations, and you get a higher number than under Republican administrations. Ditto for employment levels. Inflation rates are about the same. Do it again with lag times, since presidents inherit economies from their predecessors, and you get the same result. Change the lag time from one year to two, or three, or four, and you still get the same result. Fast-forward to 2008, and the results become even more dramatic. We've now had eleven presidents since World War II, with over sixty years of data points to draw from, and no matter how you slice the results, Democratic presidents are better for the economy.

Why? The answer is complicated, not least because it's a subject that's inherently partisan and most economists probably prefer to stick to more neutral ground. Nonetheless, it's been a small but active area of interest among academic economists for more than thirty years, and it's one that recently got some time in the limelight thanks to the publication of Unequal...