scott
08-23-2005, 06:22 PM
From the pages of Red Striped Shirt (http://redstripedshirt.blogspot.com/)
A Series of Unadulterated Facts. Part 1: Are Republicans Bad for the Economy?
In the coming series of blog postings, I will be providing some statistics from some analysis that I have conducted in regards to the relationship between politics and economics. These two fields of study are generally regarded as inseparable, although the amount of training a politician or economist receives in the other field may be limited. I, for one, have a graduate degree in economics but am only qualified for the designation of arm chair political analyst. My formal training in politics is limited to a couple of required undergraduate classes in which I admit to not paying very much attention in. Although I like to consider them objective, my political leanings are in fact based solely on my sometimes uninformed and subjective opinions, although those opinions may be formed by objective processes.
Nevertheless, politics and economics are deemed codependent. As economists, we often take into consideration any implications that political action may have on economic decision making. As economics can sometimes be a rather cold and ruthless thing, this isn’t altogether bad. Pure economics could indicate it’s a good idea to turn people into crude oil (click here), but it is politicians who have the ability to step in and overrule economic rationality with plain old human sense. At the same time, we hope that our politicians make decisions with good economics in mind. We would want our politicians making sound economic decisions, especially given the immense control they have over the domestic and global economy. While it may seem like a good political idea to implement import tariffs on steel, it really isn’t a good economic decision and the cost born in terms of lost (warning: economic lingo forthcoming) social welfare must be weighed against the marginal welfare gained by domestic steel producers.
Because of the apparent relationship between economics and politics, I decided to examine some of the relationships on a fairly superficial level, hoping for clues as to where further (and more rigorous) research would be beneficial. In the first of an unspecified number of parts, I will provide some statistics that go against conventional thinking – that Republicans are better for the economy.
Remember, in this part and all subsequent ones, that correlation is not the same as causation and the statistics I will provide are correlations, and do not imply any causation what so ever. I will not provide any of my analysis or opinion until the last part in the series – hoping everyone will draw their own conclusions until then (knowing that 75% of the people who read this will have the propensity to agree with whatever fits their personal political affiliation, and dismiss that which doesn’t). Enjoy.
For this, and all statistics provided in this series, I examined the time period of January 1947 to December of 2004. That is 58 years of data, a fairly decent sized sample. I chose 1947 because 1) that is when I have data for all the series I wish to look at and 2) it is around the start of the “post war” era.
In those 58 years, the average GDP growth rate was 3.38 percent, pretty healthy. Under a Republican President, however, the average annual growth rate drops to 2.85 percent, compared to 4.04 percent under a Democrat President. The numbers are a little better when the Republican President is part of the majority party: 2.99 percent, where as the Democrat President’s numbers drop to 3.59 percent. If annual GDP growth is a big concern of yours, however, you had better not give the Republican President both arms of congress… when the Republicans have the Presidency, the House, and the Senate, average annual GDP growth drops to 2.20 percent. On the other hand, you would be best off giving the Democrats control of the government – their number jumps to 4.36 percent.
That’s all for now, since I spent so much time explaining what my intent is early on. I’d just like to point out that this isn’t going to become a “why Republicans are bad” thing, so all you Democrats can drop any excitement you had over having something to hold over the heads of your political adversaries. In the up coming parts, there is some data that doesn’t point positively for the Democrats. And to the Republicans, please save any venom if you want to leave a comment. If you have any theories on the CAUSATION to these CORRELATIONS, I invite you to leave them – they will make good discussion.
A Series of Unadulterated Facts. Part 1: Are Republicans Bad for the Economy?
In the coming series of blog postings, I will be providing some statistics from some analysis that I have conducted in regards to the relationship between politics and economics. These two fields of study are generally regarded as inseparable, although the amount of training a politician or economist receives in the other field may be limited. I, for one, have a graduate degree in economics but am only qualified for the designation of arm chair political analyst. My formal training in politics is limited to a couple of required undergraduate classes in which I admit to not paying very much attention in. Although I like to consider them objective, my political leanings are in fact based solely on my sometimes uninformed and subjective opinions, although those opinions may be formed by objective processes.
Nevertheless, politics and economics are deemed codependent. As economists, we often take into consideration any implications that political action may have on economic decision making. As economics can sometimes be a rather cold and ruthless thing, this isn’t altogether bad. Pure economics could indicate it’s a good idea to turn people into crude oil (click here), but it is politicians who have the ability to step in and overrule economic rationality with plain old human sense. At the same time, we hope that our politicians make decisions with good economics in mind. We would want our politicians making sound economic decisions, especially given the immense control they have over the domestic and global economy. While it may seem like a good political idea to implement import tariffs on steel, it really isn’t a good economic decision and the cost born in terms of lost (warning: economic lingo forthcoming) social welfare must be weighed against the marginal welfare gained by domestic steel producers.
Because of the apparent relationship between economics and politics, I decided to examine some of the relationships on a fairly superficial level, hoping for clues as to where further (and more rigorous) research would be beneficial. In the first of an unspecified number of parts, I will provide some statistics that go against conventional thinking – that Republicans are better for the economy.
Remember, in this part and all subsequent ones, that correlation is not the same as causation and the statistics I will provide are correlations, and do not imply any causation what so ever. I will not provide any of my analysis or opinion until the last part in the series – hoping everyone will draw their own conclusions until then (knowing that 75% of the people who read this will have the propensity to agree with whatever fits their personal political affiliation, and dismiss that which doesn’t). Enjoy.
For this, and all statistics provided in this series, I examined the time period of January 1947 to December of 2004. That is 58 years of data, a fairly decent sized sample. I chose 1947 because 1) that is when I have data for all the series I wish to look at and 2) it is around the start of the “post war” era.
In those 58 years, the average GDP growth rate was 3.38 percent, pretty healthy. Under a Republican President, however, the average annual growth rate drops to 2.85 percent, compared to 4.04 percent under a Democrat President. The numbers are a little better when the Republican President is part of the majority party: 2.99 percent, where as the Democrat President’s numbers drop to 3.59 percent. If annual GDP growth is a big concern of yours, however, you had better not give the Republican President both arms of congress… when the Republicans have the Presidency, the House, and the Senate, average annual GDP growth drops to 2.20 percent. On the other hand, you would be best off giving the Democrats control of the government – their number jumps to 4.36 percent.
That’s all for now, since I spent so much time explaining what my intent is early on. I’d just like to point out that this isn’t going to become a “why Republicans are bad” thing, so all you Democrats can drop any excitement you had over having something to hold over the heads of your political adversaries. In the up coming parts, there is some data that doesn’t point positively for the Democrats. And to the Republicans, please save any venom if you want to leave a comment. If you have any theories on the CAUSATION to these CORRELATIONS, I invite you to leave them – they will make good discussion.