Economy Scores Versus Party Control

L. David Roper (roperld@vt.edu)

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There are many different economic indicators that one might apply to rank United States presidential administrations and congresses on how well they handled the economy. I have picked the following:

• G=% change in Gross Domestic Product (GDP): This tally of products and services bought and sold domestically is the standard way to gauge the health of the domestic economy. (Some recommend replacing it with the GPI (Genuine Progress Indicator), but such data are not available over the years since 1929.)
• D=% change in federal debt: This is a measure of how responsible a society is managing its income and expenses. Increase in GDP is not very meaningful if the federal debt rises at a similarly high rate. I subtract the incease in federal debt from GDP (GDP-FD) for a better measure of the economy's health than GDP alone.
• C=% change in Consumer Price Index (CPI) (inflation/deflation index): A large change in CPI, either negative (deflation or depression) or positive (inflation) hurts people's well being because their incomes cannot adjust so quickly. I subtract the absolute value (|CPI|) of the CPI change from (GDP-FD) to obtain a better measure (GDP-FD-|CPI|) of the economy's health.
• U=change in % unemployed: Even if the change in the GDP is high and the change in the FD is low and the change in |CPI| is low, if the number of people who cannot find jobs is increasing there is something wrong with the economy. I subtract the change in unemployment from (GDP-FD-|CPI|) to obtain a better measure (GDP-FD-|CPI|-U) of the economy's health.
• There are other economy indicators that one can consider. However, I feel that these four are good indicators of the health of an economy. Other indicators are undoubtedly related to these; indeed, these four are surely dependent on each other to some extent.

Now one needs a measure of political party control of the U.S. government. I use the following party control index:

• 7=party has presidency and majorities in both the Senate and House.
• 6=party has presidency and majority in the House.
• 5=party has presidency and majority in the Senate.
• 4=party has presidency only.
• 3=party has majority in the House and Senate, but not the presidency.
• 2=party has majority in the House only and not the presidency.
• 1=pary has majority in the Senate only and not the presidency.
• 0=party in in minority in both the Senate and the House and does not have the presidency.

There are other ways to quantify party control.

This graph shows the number of years each value of the party control index existed for the years 1930-1999. Most of the time the Democrats had full control of the presidency and the Congress (32 years with index=7) or full control of the Congress with a Republican president (20 years with index=3). Indices 1, 5 and 6 never occurred.

I calculate a scores (S) for each value of the Democratic party control index since the Hoover administration using the following formula:

If C<0 (deflation) use: S=G-D+C-U; if C>0 (inflation) use: S=G-D-C-U; i.e. S=G-D-|C|-U where |C|=absolute value of C.
This assumes that high inflation (C>0) and high deflation (C<0) (depression) are equally bad.

The scores for Democratic party control since 1929 are shown in the graph below and in the data table below the graph. (Republican party control is in the opposite direction across the graph.)

	Party Control Economy Scores. Note that the highest scores occurred for years when Democratic party control was stronger than Republican control (index between 3 and 7); that is for years when the presidency was Democratic (index between 4 and 7) or the Congress was totally Democratic (index 3) with a Republican president. The lowest scores occurred for years when there was a Republican president either with Republican control of the Congress or only one house controlled by Democrats.
Graphs of the separate components of the economy score.
Back to top of Presidents' and Congresses' Economy Scores (Back to Politics) (Back to Economy and Political Parties)

These are the values plotted in the graphs above:

The table below gives the values used to calculate the economy scores for for the party control index since 1929. They are sorted by party control index instead of by year.