On June 17 in our very own Washington, Iowa, GOP presidential hopeful Jeb Bush said a sustained 4 percent Gross Domestic Product would be a primary goal of his presidency.
Sources have contended that this is a lofty goal, if possible at all. Timothy Noah of Politico said, “But while 4 percent growth can last for years at the state level, it has never been anything approaching the norm in U.S. economic history, even during the boom years that followed World War II.”
Perhaps his time in Florida has Bush’s head in the clouds; the GDP is a fickle thing.
Some think that whoever the president is, he does not have any true control over the economy. This transcends political parties, which is surprising, given that the economy plays such a fundamentally important role in presidential campaigns.
“Economic growth under Democrats, it turns out, has on average been 1.8 percentage points higher than under Republicans,” National Public Radio reports. However, NPR also attributes this average essentially to luck. Given the perception of Democratic camps subscribing to state-influenced, left-leaning markets and Republican camps heralding fiscally conservative ideologies, one would assume that perhaps John Maynard Keynes got it right.
But along with that state-guided, post-World War II economic boom Noah noted, differing economic ideologies between the two parties is a thing of the past.
Neoliberal economics have dominated the White House since the era of Reaganomics. The Democratic Party adopted those ideologies with President Clinton — arguably the defining moment his signing in of the ever-controversial North American Free Trade Act.
Bush can hope for a sustained 4 percent GDP, but that’s about it. Whatever the outcome of this election, Bush, Hillary Rodham Clinton, Ted Cruz, or Bernie Sanders, the free global market will continue its pure profit-driven, stumbling sprint toward consumption. I for one would be interested as to how Bush would handle the environmental crises.
— Jack Dugan
It has long been believed that the actions of the president have little bearing on the economic growth (or lack there of) of the country. However, it would be hard to deny that the policy actions of the president do not have a direct impact on the growth of real GDP.
Naturally, I was skeptical when Jeb Bush included in his presidential campaign announcement that he believed national year-after-year 4 percent real GDP growth was a major goal. As a point of reference, President Clinton achieved the highest average GDP growth of any president since John F. Kennedy at 3.7 percent annually, according to Fortune.
Bush explained that his goal of 4 percent economic growth in Florida proves that it is possible on a national scale. There were many factors at play that allowed Florida to achieve an economic growth rate of 4.4 percent, such as increased population in the state. It would be hard for Bush to achieve the same at a national level.
If he hopes to achieve this growth, he would have to look toward an increase in productivity of the economy. Clinton’s impressive growth numbers are due in large part to the growth of the technology sector during his presidency, which greatly increased the country’s productivity.
While many may view Bush’s proclamation as simply campaign rhetoric, I believe he is capable of such a lofty goal. Presidents are capable of such power.
First and foremost, the president is responsible for appointing the Board of Governors of the Federal Reserve, which holds the largest control of fiscal and monetary policy in the United States — arguably the biggest factor outside of productivity in determining the economic success of the country.
Moreover, corporate tax structure and other federal fiscal policies could affect the national economic growth rate, according to Forbes. Last, there are boundless actions the president can pursue to achieve stable and high economic growth through increased productivity; it’s simply a matter of discovering what these actions are.
In reviewing the GDP growth rates throughout past presidencies, one trend indicates that presidents affect economic growth, while also revealing that Bush may face an upward battle: Four of the five largest average GDP growth periods came during Democratic administrations.
— Joe Lane
