Do Political Parties Matter?

In Sunday's New York Times, an Alan Blinder column discusses a new book, "Unequal Democracy" by Larry M. Bartels. Among the findings: (1) Per capita, GDP growth has been higher under Democratic rather than Republican presidents (2.78% vs. 1.64%) and (2) incomes have been more equal when a Democrat is in the White House.

While acknowledging that presidents don't really control the economy and that Federal Reserve policy and international oil prices matter a lot more, Blinder encourages readers to infer that the political parties make a difference. But is he correct? 

The problem: Blinder is ignoring how often each party enacted the agenda of the other party.

• John Kennedy's most significant economic program was lowering marginal tax rates on high income earners.
• Although Lyndon Johnson opened the door for the Great Society welfare programs, most of the expansion occurred under Nixon and Ford and mainly because of Executive Orders.
• Similarly, although Lyndon Johnson began private sector affirmative action, its expansion occurred mainly under Nixon and Ford.
• It was Jimmy Carter, not Ronald Reagan, who deregulated domestic industries and it was Carter who chose Paul Volcker to run the Federal Reserve.
• It was George H.W. Bush who broke the 1986 bipartisan tax agreement and raised taxes on higher income taxpayers.
• Bill Clinton imposed regressive energy taxes and raised taxes on middle-income Social Security recipients. Although Clinton raised the rates paid by high-income tax payers, he also signed a major capital gains tax cut.
• Virtually every Republican tax cut from Ronald Reagan through George W. Bush removed millions of low-income families from the tax rolls. Indeed, Republican tax policies are the main reason almost half the population pays little or no income taxes.

If there is any generalization to be drawn, it may be this: We seem to do very well when Democratic presidents enact Republican policies.

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