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FDR’s economic policy: top of class

GEORGIA TECH (US) — A newly-released report card that grades presidents on their economic performance names Franklin D. Roosevelt class valedictorian.

During presidential campaigns, it’s not unusual to hear candidates from both parties say they will focus on strengthening the nation’s economy. But how well have presidents delivered on that promise once in the White House?

Published in the journal PS: Political Science & Politics, the report analyzes up to 220 years of data to estimate an economic “grade point average” for presidents who served from 1789 to 2009.

Other presidents receiving A grades are Warren G. Harding, William Rutherford B. Hayes, and William McKinley. Founding father George Washington still makes the honor roll with an A-. John Adams, Harry Truman, and John F. Kennedy rank slightly lower in the A-/B+ range.

The best rated recent presidents are Bill Clinton and Ronald Reagan—both receiving a B.

“Put simply, if ‘it’s the economy, stupid,’ then we need to make stronger efforts to properly judge economic performance and to assign credit and blame where they are most deserved,” says Mark Zachary Taylor, assistant professor in the Sam Nunn School of International Affairs at Georgia Institute of Technology (Georgia Tech). “These rankings are meant to constitute a scientific step in this direction.”

Taylor analyzed data from the Measuring Worth Project at the University of Illinois at Chicago. He then graded presidents individually using the traditional A-F (4-0 point) scale based on how well each performed in eight economic areas such as unemployment, inflation, interest rates, stock market returns. and currency strength.

Taylor used multiple and competing statistical measurements, ranking algorithms and time lags to ensure the data was unbiased. No historical or ethical judgments were used to adjust the findings.

The objective approach yielded some surprises, such as the high ranking of presidents who traditionally have been poorly regarded–Harding, Hayes, and Millard Fillmore. Also some national heroes—Abraham Lincoln, James Madison, John Quincy Adams, and Andrew Jackson—each receive a D for poor economic performance.

“It makes sense when you dig into the history,” Taylor says. “In the case of Lincoln, to fight a war, you have to print money and go into debt. That’s bad for the economy in the long run, but sometimes there are more important things than the economy, such as staying united as one nation.”

The study found correlations between the characteristics of presidents and their economic performance. Presidents who have been good for the US economy tend to belong to pro-business political parties, work with a Congress in which only one house is dominated by their same party, serve during wartime, and were raised in middle-class environments.

Presidents with below average economic performance often belong to parties that are relatively pro-farmer, pro-laborer, or pro-consumer. They tend to enter a single-party federal government in which one congressional house flipped parties, and they typically were raised in lower-class environments, the research shows.

Interestingly, presidential economic performance did not correlate with the person’s pre-political career, birth order, historical “greatness,” or whether he was a “dark horse” versus a well-vetted president.

The findings refer to the past performance of a group and can’t be applied to the 2012 election to predict whether Republican nominee Mitt Romney or President Barack Obama will be better for the economy. President Obama’s first term wasn’t included in the study because it’s not complete and the data won’t be available until 2015.

What the research does suggest is that a president can affect the economy, even though the executive branch may appear on paper to have a limited role.

“It is tempting to dismiss these rankings as the product of dumb luck: getting elected at the top or bottom of the business cycle,” Taylor says. “Randomness surely plays some role in these rankings, but presidents also bear responsibility for making their own luck.”

Source: Georgia Tech

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9 Comments

  1. George

    What grace does George W Bush have. By your reasoning, it should be on the high end.

  2. CalebGT

    Was any effort made to control for other factors, or did they simply correlate economic performance to presidential terms? I went to GT, and if this study is as superficial as it seems, and so much was left as completely unexamined “randomness,” then I am quite disappointed in them.

    Was there any effort to look at economic performance over the lifetime of policies enacted during that term, or did they just look at the individual terms? Even assuming a policy is enacted in the first year of a presidency, 4 years is not a long time to examine the long-term impact of individual policies. They have Bush 2 ranked in the top 8. If a major economic collapse after 7 years of leadership that saw the very markets that collapsed deregulated by president’s party don’t knock him out of the top 8, then I think there is something very wrong with your process. You can’t measure the US economy like it is controlled by a light switch. It isn’t built up in a day and it isn’t destroyed in a day either.

    There is brief mention here that control of exactly one congressional house correlated to stronger economic performance. Were the scores assigned to presidents adjusted at all based on the type of congress they had to work with? It seems a relatively simple step to grade 4 different types of congressional control for economic performance and then adjust the scores given to the presidents accordingly.

    Come on GT, put in a little more rigor. We’re trying preserve a reputation here.

  3. LBroser

    I am confused by the previous comments. In the study GW Bush is tied for 29th, far from the top 8.

  4. George

    My bad. The word should have been “grade,” not “grace.” I missed the link to the grades. The reason for the question was that he fit the criteria of the better ones, except for being raised in a middle-class environment.

  5. ZakT

    @CalebGT: how can you attack the rigor of the study if you haven’t read it (or its methodology)? Come on, put in a little more rigor yourself ;-).

  6. CalebGT

    @LBroser: Quoting from the section “A Divided Congress Is Not an Obstacle to a Strong Economy”

    The highest average GPA (2.46) went to the eight administrations in which only one house was dominated by the same party as the president (Washington2, Cleveland1, Cleveland2, Truman1, Ike1, Reagan1, Clinton1, and GW Bush2)

    If I am reading that correctly, their methodology rates GW Bush’s second term as a resounding success. Yes, a lot of money can be made by taking huge risks in a market devoid of adequate regulation. Personally, I would prefer a slower, steadier, safer rate of economic growth. One that does not leave all but a select few thieves royally screwed.

    Learn from the past or be doomed to repeat it.

  7. CalebGT

    @ZakT: I read it. Do you care to comment on my specific complaints? Is it untrue that you are correlating short-term economic performance to presidential terms by only looking at how the economy performs during the president’s term? Democrats were elected in direct response to the two largest economic collapses of the last century. In both the Great Depression and the most recent recession, Republicans were in control for more than a single term leading up to the collapse. Voters rightfully blamed those Republicans (though they seem to have shorter memories this century), and voted in Democrat majorities. In both of these instances, your model rates the Democrat presidency after the collapse as having poor economic performance and the Republican presidency before the collapse as having good economic performance. It should be clear that the blame should not be assigned as you have implied based on correlation. You cannot have causation without temporality, and in the major cases above, the dramatic shifts in economic performance precede the changes in presidential power.

  8. ZakT

    Remember that this is not the author’s ranking or judgement…the article let’s mainstream American economists, media, and voting public select the parameters. The author does not introduce his own, other than to weight them all equally.

    CalebGT: “Was any effort made to control for other factors?”
    ZakT: No because the choice of which factors to control for is highly subjective and vulnerable to partisan or ideological bias.

    CalebGT: what was the timeframe?
    ZakT: The article separately looks at time lags of 0, 1, and 2 years because this is what most contemporary political observers and the voting public general does. So yes, the article does consider what the economy looked like after the president left office. Are there longer term effects of Presidential policies? Of course, but there is no objective, scientific, or public consensus on how to deduce or measure those. Therefore, they are left for you to consider and debate.

    CalebGT: “If I am reading that correctly, their methodology rates GW Bush’s second term as a resounding success”.
    ZakT: You are not reading that correctly. Bush’s second term received a solid “D”. You may be mistaking the *average* GPA of a group of Presidents for the GPA of specific presidents

    CalebGT: You rate the Democrat president after 1929 Great Depression and 2008 Recession as having poor economic performance and the Republican presidency before the collapse as having good economic performance.
    ZakT: You must be looking at a different article. Coolidge (Repub) got a “B-” and Hoover (Repub) got an “F”, while FDR (Dem) got an “A”; GW Bush (Repub) got a “D”, Obama (Dem) is not yet rated. Hence exactly the opposite of what you critique.

    ZakT: The article does not blame anyone, nor does it assert any particular causation. It simply presents correlations for the basis making hypotheses about causality. It asks “If Americans think the President is to blame for the economy, then how did the Presidents actually perform along the lines most Americans judge?”. Recommend you read the article more closely, you’re making a lot of unfounded, knee-jerk criticisms. Also the data is all publicly available, so if you don’t like the results, then go try it yourself.

  9. CalebGT

    @ZakT: Thank you for your responses. You are right; my reactions were very knee-jerk. I was definitely reading some things wrong. Sorry for the rants.

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