CAMBRIDGE – Hillary Clinton has repeatedly claimed in recent months that the US economy does much better when a Democrat is in the White House. Coming from the presumptive Democratic presidential nominee, that probably sounds like political spin. But the truth is that she is absolutely right.
The president, no doubt, is but one of many factors shaping the economy, and some presidents have certainly been luckier than others. But that doesn’t mean that Clinton’s claim is only “half true,” as asserted by some media fact-checkers (including the Pulitzer Prize-winning PolitiFact). The difference in economic performance under Democratic and Republican presidents is consistent and substantial, with the disparities clearly above the threshold for statistical significance.
Princeton University economists Alan Blinder and Mark Watson confirm this Democratic dividend in a recent study. Their starting point is the observation that in the post-World War II period (from Harry Truman to Barack Obama), annual GDP growth has averaged 4.3% during Democratic administrations, compared to 2.5% under Republicans. If one goes back further, to include Herbert Hoover and Franklin D. Roosevelt, the disparity is even larger. The results are similar even if one assigns responsibility for the first three months – or the first few quarters – of a president’s term to his predecessor.
But there is more. Over the 256 quarters in the 16 post-war presidential terms, the US economy was in recession for an average of 1.1 quarters during Democratic presidencies and 4.6 quarters during the Republican terms. The odds that such a large difference is the result of mere chance are no more than one in 100.