There is an enduring myth that Republican presidents are more competent on economic matters than Democrats. In fact, for what it is worth, experience seems to have shown the opposite.
In poll after poll, Americans say the most important issue for them in their upcoming presidential election will be the economy. In poll after poll, they say they trust Donald Trump more than Kamala Harris on that issue, or on reducing inflation.
Some will see this as the effect of the image of a successful businessman that the Republican Party likes to give to its champion. Others will say that this is probably proof, contrary to what many experts think, that the record of the Trump years was better than that of the Biden years, and that Trump’s current electoral platform is also better than Harris’.
Perhaps. It is worth noting, however, that the current situation is not new and that, almost throughout history, Republican Party candidates have been perceived by voters as being more qualified on economic issues than their Democratic opponents.
This phenomenon is not unique to the United States, as the right often has a reputation in other countries for being more competent in dealing with economic issues, while the left is said to be better, for example, at fighting injustices or protecting the environment. After all, is this so surprising when we know that, traditionally, the right talks a lot about the importance of economic, fiscal and budgetary issues and that the left is more willing to contest the flaws of markets and capitalism?
But here it is. All this does not stand up to the test of facts. At least in the United States.
The real party of the economy?
A little less than 10 years ago, two Princeton University economists, Alan Blinder and Mark Watson, compared the performance of the American economy under the various presidents who had come and gone since World War II. They found that it had consistently performed better when Democratic presidents were in the White House.
And the advantage over Republican presidents was far from marginal. Over a typical four-year term, gross domestic product (GDP) grew on average nearly twice as much in total (+18.5% versus +10.6%) when a Democratic president was at the helm. This superiority was not limited to the strength of the economy. It was also observed in other important economic indicators, such as GDP per capita, employment, real wages, inflation, interest rates, fiscal health, and even stock market performance.
A little over three years ago, the New York Times took these figures and added Donald Trump’s record. In terms of job creation, the first six places were occupied by Democratic presidents, the 14the and last place went to Trump. In terms of economic growth, five of the top six places were also Democrats and Trump still finished dead last.
Republican deficits
Let’s take another example, that of public finances. Just this summer, the International Monetary Fund warned the American federal government about its systematic budget deficits and the continued rise in its debt, which could go from 121% of GDP to 140% by 2036. This problem threatens not only the stability of the United States, but also that of the global economy, and requires “urgent” corrections, the IMF warned, contrary to what the presidential candidates seem to think.
If we look only at the last 60 years, we see that the American federal government has experienced virtually nothing but budget deficits, with the exception of a brief period in the late 1990s.
This performance has not failed to be strongly influenced by the economic context, with recessions increasing government spending at the same time as its tax revenues decreased. This phenomenon was particularly marked during the financial crisis of 2007 to 2009 and the pandemic in 2020. But we also sometimes see deficits widen outside of these periods of economic crisis.
When we follow this trajectory of federal deficits by taking into account the president who was in charge at the time, we see clearly that the years of Nixon, Reagan, Bush or Trump were far from being more brilliant than those of the Democrats Carter, Clinton, Obama or Biden. One would be inclined to say the opposite and conclude that, if Americans are worried about the state of their public finances, they would probably do better to rely on a Democratic president than a Republican one.
Beware of appearances
But appearances can be deceiving, experts say. Economic crises are usually caused by a combination of factors over which governments often have little direct control and that were brewing before they came to power. In their study, Blinder and Watson attribute the success of Democratic presidents mainly to the luck of having arrived in better international contexts, of having endured fewer oil shocks, of having benefited from a U.S. economy where all the factors of productivity fit together better, but perhaps also of having been driven by consumers who were more confident about the future.
Still. The difference between the Democratic and Republican years is too stark to be a coincidence, experts quoted in the article said. New York Times.
Part of the explanation could come from greater economic pragmatism among Democrats, they explained.
This would be particularly true since the Reagan years, since which the Republican program has been largely limited to deregulation and tax cuts, especially for the richest. Such measures can indeed produce good results, according to the article, but especially in countries where the state and taxation are stifling, which is not the case in the United States.
Less ideologically rigid and more concerned with achieving results to improve the lot of workers, Democratic presidents would have been both more proactive and more open to trying all sorts of solutions to improve things.
But all these explanations remain very incomplete, our experts admit. And they do not prevent Americans from trusting the Republican candidate more to take care of their economic well-being over the next four years.