FREAKONOMICS: How powerful is that leader?

U.S. President Barack Obama delivers a statement on the economy in the Rose Garden at the White House in Washington, D.C.

TEXT OF INTERVIEW

Kai Ryssdal: It is time once again for a little Freakonomics Radio. Every couple of weeks, we talk to Stephen Dubner, co-author of the books and the blog of the same name. It is, of course, about "the hidden side of everything." Dubner, welcome back.

Stephen Dubner: Thank you much Kai.

Ryssdal: Here we are, Dubner, it's Election Day. What is that make a Freakonomist think of?

Dubner: Today, Kai, I've got something that is sure to offend just about everybody.

Ryssdal: You can't do that. Every time you come on this program, you offend people. Last week, it was naked in your dreams, and now, it's -- I don't know -- offending people? Stop!

Dubner: That's why I come here, OK? It's a very simple question I want to ask, which is this: How much does the President of the United States really matter? Trust me, you try this question out on anybody, any political persuasion, their head will explode. They say, "What are you talking about? The president's the most powerful human being on the face of the earth!"

Ryssdal: He is, point in fact, the leader of the free world, right?

Dubner: That's what we call him, but I talked to some people who actually study how much the president matters. We're going to begin with Justin Wolfers who's an economist at the Wharton School at Penn and at the Brookings Institution.

Justin Wolfers: That's a great question and it's almost impossible to answer.

Dubner: "Impossible to answer"!

Ryssdal: That was a very serious Australian man right there.

Dubner: Very serious Australian. So, you know, why is it so hard? Let's start small: If it's hard to measure how much the president has, let's look at other kinds of leaders. Maybe we can measure them more easily, like a baseball manager, OK? So we talked to J.C. Bradbury, who's known as the "baseball economist." Now scholars like him like to analyze data from baseball players over the years to try to isolate the effectiveness of the manager. And you know what Kai, it turns out the manager doesn't matter so much.

J.C. Bradbury: What we found when we look at managers is that while some may be slightly better than the others, it's not a big difference between one manager to the next in terms of the decisions that they make.

Ryssdal: Well, that may well be, Dubner. But here's the thing: Baseball managers have, like what, 25 guys, 40 during the play-offs. There are 310 million people in this country, so give me some kind of better example.

Dubner: Alright, how about the CEOs of big companies. That makes a lot of sense. A lot of economists and business school professors spend a lot of time trying to isolate their influence. And I hate to tell ya, CEOs don't have that much more impact than baseball managers do. What the data shows is that whether their companies thrive or dive, it's got more to do with the general state of the economy or the firm's underlying position than what any CEO actually does.

Ryssdal: Well, alright, if you tally it up here between baseball and CEO, Dubner, we're like 0-2 on your power meter here, right?

Dubner: That's true.

Ryssdal: So, let's get really big and talk about what presidents can do. They can wage wars, they can enforce the laws. Doesn't power have something to do with how much the president matters?

Dubner: Absolutely, but if you think about it, there aren't that many things that the president can do unilaterally, OK? Most of the power is very constrained and that's not accident. The Constitution was written in a way to limit that power. So let's hear from Bernadette Meyler, professor at Cornell Law School.

Bernadette Meyler: We think of the president as having great power to fix the economy, for example, or fix international conflicts. And to some extent, the president has persuasive authority to do things like that. But the president really can't just turn around and fix the economy within two years, for example.

Ryssdal: No matter how much the Obama Administration would've hoped that they could've done in two years. But the bigger question though is: If "it's the economy, stupid" is the mantra, isn't the question then how much does the president really matter to the economy, stupid?

Dubner: Yeah, maybe. But, you know, most economist argue that the president's ability to actually shape the economy is indirect at best. Here's Justin Wolfers again. He says, if you wanna look for the real power, you don't necessarily look in the Oval Office, you might look to somewhere like Maine, where a moderate swing vote senator like Olympia Snow comes from.

Wolfers: So, Olympia Snow might be just about as important right now as President Obama in terms of ability to do things like extend unemployment insurance or pass a fiscal stimulus.

Ryssdal: Where you guys in the library at Penn when you were recording this? Because he's talking really low.

Dubner: It was a morgue actually, Kai.

Ryssdal: Well, let me ask you this then, getting back on track here: If the president isn't the most powerful human being on the planet, why do we all think he is?

Dubner: I'd like to think it goes back to the early 19th century and Thomas Carlyle and his Great Man theory of history. It seems that we need to believe, very badly, that somebody is 100 percent in charge. It's comforting, it's convenient. But it's also wrong.

Ryssdal: There you have it. Stephen Dubner lays down the law. He is our Freakonomics Radio correspondent. There is more on this story on the Freakonomics Radio podcast, which you can get at FreakonomicsRadio.com. Dubner, we'll see you in a couple of weeks.

Dubner: I can't wait Kai.

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