Thursday , December 14 2017
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A few links: eroding norms and the limits of presidents re the economy

Summary:
I’ve had a couple of WaPo posts out to which I’ve been meaning to link. This first one, on the warp speed of norm erosion in the Trump era, has the interesting feature that its shelf life was vastly shortened by the Mooch getting the bootch later in the very day I posted. Of course, given that Trump still tops the ticket, I suspect the general thrust of the piece remains valid. Today, I’ve got a post up pushing back on the idea that presidents play an outsized role in economic outcomes, especially near-term ones. I don’t mean to underplay their role, which can be significant, especially via counter-cyclical policies in recessions. But taking credit (or getting blame) for this or that monthly jobs or quarterly GDP report is nonsense. As is the whole “my platform will boost growth by X

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I’ve had a couple of WaPo posts out to which I’ve been meaning to link.

This first one, on the warp speed of norm erosion in the Trump era, has the interesting feature that its shelf life was vastly shortened by the Mooch getting the bootch later in the very day I posted. Of course, given that Trump still tops the ticket, I suspect the general thrust of the piece remains valid.

Today, I’ve got a post up pushing back on the idea that presidents play an outsized role in economic outcomes, especially near-term ones. I don’t mean to underplay their role, which can be significant, especially via counter-cyclical policies in recessions. But taking credit (or getting blame) for this or that monthly jobs or quarterly GDP report is nonsense.

As is the whole “my platform will boost growth by X percent,” where X is non-tiny. That’s the source of all kinds of bad policy, especially in the realm of tax cuts, dereg, tilted trade deals, and many other forms of upward redistribution.

One thing I didn’t fit into the piece: President Obama, who liked, understood, and respected data, did a lot less of this sort of thing–claiming credit for positive data releases–than most POTUS’s before or…um…since. He was especially careful not to set up the stock market as a report card, despite the fact that it grew strongly on his watch (the DJIA rose by a factor of 3 between March of ’09 and Dec of ’16).

Some criticized the former president for not taking more credit for growth outcomes on his watch. (I’d separate out the Recovery Act, which we did claim some credit for, but which was a very challenging message to get across.) The economic message, as I recall, pretty much reduced to “things are improving but they’re still not good enough.” Whether that was a good or lame message, I can’t say, but it was true (especially from the perspective of the middle class), and Obama was fundamentally just a very honest person, especially for a politician.

Finally, I do think team Trump makes a big, rookie mistake by setting out the stock market as a report card. That’s one fickle report card, and it goes up and down in ways that typically have nothing to do with the actions of an administration. At some point, I predict they’re going to be trying the old junior high stunt of getting the report card from the mailbox before mom and dad get there.

Jared Bernstein
Jared Bernstein joined the Center on Budget and Policy Priorities in May 2011 as a Senior Fellow. From 2009 to 2011, Bernstein was the Chief Economist and Economic Adviser to Vice President Joe Biden, Executive Director of the White House Task Force on the Middle Class, and a member of President Obama’s economic team. Prior to joining the Obama administration, Bernstein was a senior economist and the director of the Living Standards Program at the Economic Policy Institute, and between 1995 and 1996, he held the post of Deputy Chief Economist at the U.S. Department of Labor.

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