Beware of the logical fallacy Post Hoc Ergo Propter Hoc,
Coincidental Correlation (The
fact that two or more events occur at the
same time, or one after the other, does
NOT necessarily indicate ANY cause-and-effect
relationship. There may be NO relationship
"Elected leaders tend to believe they are responsible for a lot more than they really are. Like the little boy on his first plane trip 'helping' the plane by flapping his arms as the Boeing 747 begins to ascend, legislators often seem to believe that somehow they run the economy and solve lots of problems." -- Curt Leonard, May 13, 2003 HERE
"In general, presidents and congressmen have
very limited power to do good for the economy and
awesome power to do bad. The best good thing that
politicians can do for the economy is to stop doing
bad. In part, this can be achieved through reducing
taxes and economic regulation, and staying out of
our lives." Dr. Walter E. Williams, Oct. 30, 2002
"...The individual legislator must remember that the elixir for all that ills is economic growth. And economic growth is spurred by low taxes, limited regulation, equitable justice, and the ability to raise capital." -- Curt Leonard, May 13, 2003 again, HERE
"What creates economic growth are billions of decisions all over the world, made according to a timeline that only vaguely coincides with the political calendar." -- Jonah Goldberg, Oct. 22, 2003, HERE
"The economy is no longer the central issue on which electoral fortunes hinge. ... voters have learned that America's economy is influenced by global forces and international bankers who are way beyond the power of the president to control. To the extent that the political process has a lever with which to move the economic numbers, it's through the Federal Reserve Board and nobody tells Alan Greenspan what to do." Dick Morris, Nov. 7, 2002 in the New York Post.
"... But then who ever said that the president alone determines the economy or the stock market? It's Congress that makes the laws. The president just signs them. Based on congressional control, the study results look very different. ..." -- Donald Luskin, Sept. 11, 2008, HERE
The condition of the economy is sometimes the result of surprise innovations in technology and changes in consumer demand over which few people have any influence at all (except in totalitarian dictatorships but even there only for brief periods of time) and are often the result of economic cycles over which no person or persons ever has control.* These economic cycles can range in length from months and years to decades, and, yes, even centuries. For examples, check out the chart of the Dow Jones Industrial Average's log scale HERE and its inflation- adjusted chart HERE. Notice that the average length of a boom or of a period of stagnation has been a pretty regular16 to 20 years, nomatter what (or who) is involved.
Finally, Presidents CAN and DO have some real long-term influence on the strength or weakness of those cycles and on their duration by whether or not they help increase taxes and regulations (bad) or decrease them (good) but NOT on the cycles themselves. Their efforts may result in a short-term effect on stock and bond prices, some interest rates and even incomes, but it can take years for the overall economy to suffer or enjoy all the actual (sickening, healing or energizing) consequences. One of the most remarkable ironies of the peculiar American system of (comparatively short and regular) 4-year Presidential election cycles is that many voters and politicians (and the all-too-common economically- illiterate journalists) blame or credit whoever's in office at the moment for the economic conditions of the moment, even though those conditions were heavily influenced, if not primarily caused, by the almost-untouchable Federal Reserve Board and/or by prior administrations, sometimes even 3, 4 or 5 administrations back. Often enough, tax cuts enacted during one administration help cause a boom in later administrations, and likewise, tax hikes result in recessions way too late for short attention spans to correlate correctly.
"When the US government
ended 'welfare as we know it' in 1996, it handed
responsibility for reform to the states. In so
doing, it also created a real-world test of two
competing economic strategies used to fight
poverty. The results are in and the lessons are
clear: Low tax rates lift up the lives of
UPDATE: The current administration says the economic meltdown that started in 2007 was the result of George Bush's policies. They believe that Americans are economically illiterate enough to accept that nonsense as fact The meltdown was caused primarily by the housing bubble which began with the "Community Reivestment Act" ("CRA") during the CARTER administration -- its acceleration during the Clinton adiminstration -- and the refusal of Congress to reign in Fannie Mae and Freddie Mac -- which enabled the governments' forcing of banks to make millions of loans to people with horrible credit histories. We're talking about the economic impacts of policies which weren't visible, essentially, until about THIRTY YEARS after the politicians' enacted their insane mistakes.
"Scratch the surface of an endemic problem -- famine, illness, poverty -- and you invaariably find a politician at the source." -- Simon Carr, in his review of The Mystery of Capital by Hernando de Soto
"... Given these plain facts, are politicians, pundits and media people -- who persist in talking about a president cutting or raising taxes, or creating a budget deficit -- ignorant, stupid or deceptive?" -- Dr. Walter E. Williams, HERE
* Some schools of economic thought, including the Austrian, say that if there were no central-bank monopoly on monetary controls (which is what the "Federal Reserve" has) the cycles would be limited to each very localized economy, economic sector, or bank group, and they would eventually grow out of sync with each other, "smoothing out" the total economic cycles of the nation, or even of the world. Of course, this would give every person and business entity an opportunity to jump from one sector or bank to another, or to spread their banking risks out over several, making them much less vulnerable to the problems of any one banking system, whether it were influenced by politicians, or any other imbeciles, or not.
"Presidents don't create jobs." -- Thomas Sowell
"Politicians Cannot Make Jobs" -- Tibor Machan
"Politicians cannot create jobs or wealth. Such is axiomatic to straight thinkers." -- Greg Perry
|"It is no crime to be ignorant of
economics, which is, after all, a specialized discipline
and one that most people consider to be a 'dismal
science.' But it is totally irresponsible to have
a loud and vociferous opinion on economic subjects while
remaining in this state of ignorance." Murray N.
"Economics is haunted by more fallacies than any other science known to man." Henry Hazlitt in ECONOMICS IN ONE LESSON
"Today, in the Twenty-First Century, an age of jet
aircraft, personal computers, wireless
telecommunications, laser surgery, and incipient space
travel, the mentality with which many presumably
educated, intelligent people approach matters of
economics and business is, however astonishing it may
seem, still that of the Dark Ages." George Reisman
|When you really stand back, you can see the "stagflation" of the '70s was much more the result of Lyndon Johnson's policies (which began in the '60s) than Jerry Ford's or Jimmy Carter's. When you can see that the effect of the Reagan tax cuts and telecom deregulations in the '80s laid the groundwork for, and helped spur, the 18-year boom which didn't peak until the late '90s, you have to credit Ronald Reagan, the ONLY president EVER to have a degree in economics, for being so far-sighted. (Despite the fact that his policies were vociferously blamed for the continuing stagflation before they were given any time to take effect). Further, you have to find fault with the tax-and-regulate-and-spend Bushies and Clintonites who cynically claim credit for the Reagan boom and all its side effects, including the balanced budgets of the late '90s, while they actually did everything in their power to raise taxes and increase regulations, crippling the economic future of the country.|
See: "Obama threatens to follow in FDR's economic missteps"-HERE.- Also
check out the Burton Folsom speech on the Great Depression-HERE- and
"Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years..." HERE.
Also see: The Forgotten Man: A New
History of the Great Depression-HERE,- Rethinking the Great
Depression HERE, America's Great Depression HERE,- Forgotten
Lessons-HERE, Essays on the Great Depression HERE,
and discredited ideas, it seems, never die.
Neither do they fade away. Instead, they keep
turning up, like bad pennies or Godzilla in the old
Japanese movies." -- Murray
"How a conflict-ridden, grossly over-populated place with no resources whatsoever gets rich is simple. The British colonial government turned Hong Kong into an economic miracle by doing nothing." -- P.J. O'Rourke in Eat the Rich
"Remember, the wealth you see around you didnt always exist; it was and is CREATED wherever the right CONDITIONS OF FREEDOM (including the rule of natural law evenly applied, with the rigorous protection of individual rights including property rights and respect for contracts, effective prosecution of the perpetrators of force and fraud, and the ease of engaging in trade without the interference or "permissions" of politicians and bureaucrats) are established and guaranteed." -- Rick Gaber, HERE
"Never and I mean never blindly trust the statistics you read about the economy." -- Don Luskin, HERE
"Most Americans dont know enough about basic economics to fill out one fortune cookie." -- Neal Boortz, HERE
"If we fixed a hangnail the way our government fixes the economy, we'd slam a car door on it." -- Cullen Hightower
Checking out a college? Maybe you should avoid UC-Berkeley. Elsewhere, if the Econ 101 text is by THIS GUY -- just keep looking.
PROOF that economics has entered the realm of the cool: CLICK THIS!
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"Whenever you come across a screw-up this big, you know the government is behind it." - Ann Coulter