The economy's looking up, but can Obama take credit?

President Barack Obama speaks with an employee as he tours the manufacturing facility at Master Lock, maker of security locks, prior to speaking on the economy in Milwaukee, Wis. Commentator Megan McArdle says presidents have remarkably little control over the economy.

Kai Ryssdal: It's been the conventional wisdom for a good couple of years now that President Obama's prospects for continued employment rest largely with the unemployment rate and consumer confidence.

Commentator Megan McArdle says just because things are looking up, that doesn't mean the president gets the credit.

Megan McArdle: Over the past several months, the GOP candidates have done their best to link President Obama with the economy in voters' minds. And why not? Tens of millions are still out of work, and while growth may be picking up, it's still not fast enough to repair resumes or credit scores.

But Mitt Romney should have thought twice before he claimed that Obama had "made the recession worse." The reason is -- it just isn't true. There is just no evidence that the economy would have been any stronger today under President John McCain. Hold on Democrats, there's no reason to think that it would be any weaker, either.

The fact is that presidents have remarkably little control over the economy. Economists just don't know that much about what mix of policies make economies grow. The best presidents can do is something like Obama's massive stimulus package -- but fiscal stimulus doesn't grow the underlying economy as much as borrow some growth from the future.

Frankly, we should be glad that presidents don't have that kind of power. You wouldn't like living in an economy that was prone to radical shifts every time a new president was elected.

Unfortunately for Obama, voters tend to put a human face on large, impersonal forces. We can't get mad at technological progress that destroys low-skilled jobs, so instead we get mad at the president. But don't feel too sorry for him. After all, when he was campaigning in '08, Obama frequently complained that President Bush had "driven the economy into a ditch." And Obama promised he would drive it out again.

Even after he was elected, he told NBC's Matt Lauer: "If I don't have this done in three years, then there's going to be a one-term proposition." We'd probably all be better off if voters didn't assume that presidents can fix the economy. And we'd definitely be better off if presidential candidates didn't tell them so.

Ryssdal: Megan McArdle is a business writer at The Atlantic magazine. Your thoughts? Send 'em to us.

About the author

Megan McArdle is a special correspondent for The Daily Beast and a former senior editor for The Atlantic. She writes about business and economics.
Log in to post8 Comments

it is my understanding that clinton and bush both supported if not sponsored liberalizing gse mae and mac lending to home buyers who could not afford what they were purchasing. these presidents remarkably controlled the destruction of economic growth. bush and obama continued a war in afghanistan for ten years longer than necessary. they have over spent on military massively to the deleterious affect to our ability to improve our economy. instead of borrowing money to waste it in the east, we could have borrowed it to spend on ourselves, here, in this country to create jobs.

A little historic perspective, if you please. Presidents have a definite impact on economy, through their administrations.

By trying to stimulate the economy through rabid (not rapid) deregulation combined with zero over-site, presidential administrative offices - who are appointed NOT elected - carry out policies that often put our economy on a roller coaster headed for a crash. Same as the S&L crisis of the 80's and the bank bailouts of the 90's.

You're journalists. You should do your homework.

I'm pretty sure Megan was referring to short-term fixes, not long-term mistakes.

FACT: presidents cannot do anything to make the economy improve dramatically compared to trend #presidentscantfixeconomies

I was onboard with Megan until her next-to-last paragraph and then she lost it.

"...Obama frequently complained that President Bush had 'driven the economy into a ditch.' " suggests that Bush was not complicit in, well, driving the economy into a ditch.

That, as we all know, is so patently untrue.

Bush and his crack team of financial "hands-off" advisors and cabinet members was, oh-SO responsible for creating the environment that wrecked the economy ... although, in fairness, it wasn't so much into a ditch as into a tree.

And THEN a canal.

Agreed. The President cannot improve the economy by himself.
But with a cooperative Congress it's pretty clear that he (or she in the future) can. The New Deal did wonders to lessen the effects of The Great Depression, until budget balancing became the priority in 1937. Still massive government spending for World War II ended the Depression once and all. If only we didn't need a massive war to end economic disasters.

Then maybe she should say 'outside of massive, massive Krugman-esque stimulus'. Clearly nothing like a WPA was politically feasible so your New Deal analogy really isn't applicable in our polarized age.

I agree with Megan. The POTUS really has nothing to do with improving the whole economic picture regardless of political affiliation. He can throw money at projects, but over all it is the private sector that will dictate whether the "economy" will grow as well as the confidence that "we the people" have and are willing to spend. However, there is no desire for the the private sector to hire more people as they can gain a high rate of productivity from a smaller number of workers. Their total desire is to earn more year over year. Investors demand it and their directors are paid accordingly.

With Generous Support From...