By now, we’re all overly familiar with the phenomenon. Presidential campaigns are about the economy, stupid, and the ebbs and flows of interest rates, gas prices, and GDP go right to the rap sheet of the person in the oval office.
Beyond sloganeering, we colloquially often name the economy after the administration that presides over it. Trump economy. Bidenomics. You get it. And even if you’re not using the name, it seems most Americans connect the state of the economy with the president and the president’s party. After months and months of hearing about presidents and their economies, the doctrine of the President’s Economy can seem axiomatic. But, according to a political scientist, the actual state of play isn’t that simple.
“The reality is far more complicated and far more nuanced than what can be explained in a 30-second ad,” Amy Black, who teaches political science at Wheaton, told me via email in October.
You might naturally assume, as I tend to do, that all questions about the economy go to economists. But in this instance, we’re not exactly talking about an economic question. We’re talking instead about the mechanisms of government, both their levers and limits. Because of this, according to Black, the tendency to blame or reward heads of state for the economic climate is “misplaced.”
“It’s something that we political scientists often note,” she said. “And it’s a trend that political campaigns take to heart. But the reality is that Americans place far too much emphasis on the president’s role over the economy. Of course the president makes decisions that have economic consequences, but many of the governmental actions that affect the economy are outside the president’s direct control.”
Exactly how this works, you may or may not remember from civics class. The Federal Reserve sets monetary policy, which carries direct implications for the economy. A president’s role is to appoint members of the Fed’s Board of Governors, appointments that the Senate must confirm.
“The president has important power here in choosing the nominees,” Black said, “but the Senate confirmation can weaken the president’s power, and the 14-year terms insulate board members from much political pressure.”
At a different level of government, the president works with Congress on tax policy.
“Most of our fiscal policy is adjusted through public laws,” Black said. “Presidents help set legislative agendas and seek to move their priorities through Congress, but they have to find ways to work with Congress to achieve these goals. Tax and spending policy must pass in the House and Senate, and the president signs it into law.”
This means that if a president’s party controls both the House and the Senate, a president can push through significant changes. But when party control is split, as seems to happen often, an administration’s legislative agenda may not accomplish much at all.
In our exchanges, Black emphasized that deliberate governance, regardless of perception, often has little to do with economic health. Of course, in a post-2020 world, you can pretty easily think of outside events over which no governmental body possesses influence, and we all know the havoc these kinds of events can wreak on an economy. Which gets back to the question of the president’s economy.
Unsurprisingly, according to one political scientist, campaign talking points and colloquialisms misrepresent the relationship between presidents and the economy of their tenure. Will we stop tagging every egg price or jobs report on the resident of 1600 Penn? Probably not. But we’ll at least know better.
