Editor: President Trump’s supporters often cite his business acumen as a reason to support him this November.
In polls, Trump consistently fares better than Joe Biden when respondents are asked which candidate is better equipped to manage the economy. In truth, however, presidents have little effect on the economy. Until recently, the economy under his administration followed the same trajectory as that since the 2007 recession.
In a 2014 study published by the National Bureau of Economic Research, Princeton economists Alan Blinder and Mark Watson showed that the annualized GDP growth rate since the Truman administration was 4.35% under Democratic administrations and 2.54% under Republicans. The top four spots were held by Democrats despite higher average tax rates under Democrats. The authors attributed the advantage to luck — fewer oil price-shocks, superior consumer confidence and a more stable international geopolitical environment during their administrations — not more skilled economic management.
Trump’s poor performance in combating the coronavirus is considered a “shock,” as outlined by Blinder and Watson. From day one he played into the strengths of a novel virus when in January 2017 he canceled a regulation requiring nursing homes and hospitals to have plans to mitigate airborne disease and have adequate stockpiles of personal protective equipment at each facility. He and members of his administration felt it was too burdensome and expensive.
Trump’s late response, failure to lead on masks and distancing and failure to deploy the Defense Production Act to ensure the kind of rapid testing availability that he, his White House contacts, and major league athletes all enjoy contribute to this viral calamity. Economic historians will need to correct Blinder and Watson’s study to show that presidential performance can impact the economy.
STEVEN EISNER GORDONVILLE, LANCASTER COUNTY