Presidents Have Less Power Over the Economy Than You Might ThinkBreaking News
tags: election 2016, Economy, Trump
When George H.W. Bush took office in January 1989, the unemployment rate was 5.4 percent and the roaring 1980s expansion was near its peak. When Bill Clinton succeeded him in January 1993, the unemployment rate was 7.3 percent and falling, as the United States was finally shaking off the damage of a recession.
That bit of timing alone — taking office at the trough of the business cycle versus the peak — can help explain much of how we perceive a president. Mr. Bush, of course, was a one-term president, while Mr. Clinton was handily re-elected.
President Obama’s luck on this front was somewhere between those extremes; he took office in the middle of a steep downturn. But some simple math shows just how much the timing of the 2008-9 recession relative to Inauguration Day mattered. Mr. Obama is set to leave office with cumulative job growth of 8.4 percent over his eight years in office.
But if he had taken office 13 months earlier in December 2007, he would have presided over a putrid 3.4 percent growth. If he had taken office in February 2010, when employment hit rock bottom, he would be on track to see blockbuster 14 percent job growth in eight years (assuming 2017 job creation turns out to be equivalent to 2016).
Put simply, when you take office at the bottom of a recession and with unemployment high, you can “achieve” a lot of growth just from the natural healing of the economy.