I was watching tonight’s 60-minute spot on McCain & Obama, and started to reflect on the extensive coverage (and rhetoric) on the status of our economy and its effect (or blame) on politics.  One argument I hear over and over when someone is defending their own party (or damning another) during an economic crises is that the it is the result of the previous administration(s) and not the current one, or that Congress is to blame and not the President (or vice-versa), etc. So I thought I’d do a little exercise to see for myself.

The exercise was as follows: I looked up the dates of the 12 “sharp” recessions and depressions over the past century (including the current crisis), ignoring so-called “mild recessions” (such as the 1991-1992 downturn), as classified by Geoffrey Moore (note that the National Bureau of Economic Research lists 20 “downturns” since 1907, but not all of these were severe). I then found what party was in power in either the Presidency or Congress in the preceding decade leading up to the downturn.  Determining what president was in power was a cinch, but for the Congressional power balance I found the information I needed in the Recapitulation tables from the Office of the Clerk of the House of Representatives (what a great resource – great job clerks!).  I assumed that the majority party was “in control” for a given Congressional cycle (admittedly an arguable standpoint).   I determined the balance of power in any decade as the percentage of years that a given party was either president or in control of either house of Congress.  I also looked up some information on the severity of each downturn and some commonly ascribed (although not necessarily accurate) underlying causes.

Immediately below I list my data, but you might want to skip ahead to the Analysis to see what my conclusions are.

Data

1907-1908 Banking Panic

Causes: Run on banks following failed attempt to corner copper market; 1906 San Francisco earthquake may have also contributed

Severity:  Max unemployment 8%; classified as a sharp recession.

Presidents: The Republicans dominated the Presidency in the decade prior to 1907, with William McKinley (R, 1897-1901, assasinated) and Theodore Roosevelt (R, 1901-1909).  100% to the GOP.

Congresses: The Republicans also controlled Congress 100% during this period, with up to 2:1 majorities in the Senate (1899-1901)..

  • 55th (1897-1899): Senate: 34 (D) 46 (R);  HoR: 134 (D) 206 (R)
  • 56th (1899-1901): Senate: 26 (D) 53 (R);  HoR: 163 (D) 185 (R)
  • 57th (1901-1903): Senate: 29 (D) 56 (R);  HoR: 153 (D) 198 (R)
  • 58th (1903-1905): Senate: 32 (D) 58 (R);  HoR: 178 (D) 207 (R)
  • 59th (1905-1907): Senate: 32 (D) 58 (R);  HoR: 136 (D) 250 (R)

1920-1921 Post-WWI Depression

Causes: European hyperinflation & post-war contraction

Severity: Max unemployment 12%; classified as a depression.

Presidents: Woodward Wilson (D, 1913-1921) was president through much of this period during which the US entered WWI (although Wilson was not in support of this). William Howard Taft (R, 1909-1913) was president prior to this.  So Dems were in power for 70% of the pre-depression period.

Congresses: The Congress flip-flopped between Dems & GOP in this period, with Dems in control of the both houses for 60% of the period.

  • 61st (1909-1911): Senate: 32 (D) 59 (R);  HoR: 172 (D) 219 (R)
  • 62nd (1911-1913): Senate: 42 (D) 49 (R);  HoR: 228 (D) 162 (R)
  • 63rd (1913-1915): Senate: 51 (D) 44 (R);  HoR: 290 (D) 127 (R)
  • 64th (1915-1917): Senate: 56 (D) 39 (R);  HoR: 231 (D) 193 (R)
  • 65th (1917-1919): Senate: 53 (D) 42 (R);  HoR: 210 (D) 216 (R)
  • 66th (1919-1921): Senate: 47 (D) 48 (R);  HoR: 191 (D) 237 (R)

1923-1924 Recession

Severity: Max unemployment 5.5%; percent change in real GNP -4.1%; classified as a sharp recession.

Presidents: Woodward Wilson (D, 1913-1921), Warren Harding (R, 1921-1923, died in office) and Calvin Coolidge (R, 1923-1929) were presidents leading up to the 1923 recession, so Dems were in power for 80% of this period.

Congresses: Power moved from the Democrats to the Republicans in this period, with the HoR dramatically switching from 2:1 Democrat:Republican in 1913-1915 to 2:1 Republican:Democrat in 1921-1923.  Power was shared 50/50 over the 10 year period.

  • 63rd (1913-1915): Senate: 51 (D) 44 (R);  HoR: 290 (D) 127 (R)
  • 64th (1915-1917): Senate: 56 (D) 39 (R);  HoR: 231 (D) 193 (R)
  • 65th (1917-1919): Senate: 53 (D) 42 (R);  HoR: 210 (D) 216 (R)
  • 66th (1919-1921): Senate: 47 (D) 48 (R);  HoR: 191 (D) 237 (R)
  • 67th (1921-1923): Senate: 37 (D) 59 (R);  HoR: 132 (D) 300 (R)

1929-1933 Great Depression

Causes: Stock market and banking collapse

Severity: Max unemployment 25%; percent change in real GNP: -33%.  Worst depression in US history.

Presidents: Except for Woodrow Wilson (D, 1913-1921), a Republican was president for much of the prior decade before the 1929 collapse: Warren Harding (R, 1921-1923; died in office), Calvin Coolidge (R, 1923-1929) and Herbert Hoover (R, 1929-1933; in office when recession started).  So Republicans held the executive office for 80% of the time prior to the Great Depression.

Congresses: the 5 congressional sessions in the decade prior to 1929 were all controlled by the Republicans in both houses (although the 66th and 70th Senate were close ones). 100% to the GOP.

  • 66th (1919-1921): Senate: 47 (D) 48 (R);  HoR: 191 (D) 237 (R)
  • 67th (1921-1923): Senate: 37 (D) 59 (R);  HoR: 132 (D) 300 (R)
  • 68th (1923-1925): Senate: 43 (D) 51 (R);  HoR: 207 (D) 225 (R)
  • 69th (1925-1927): Senate: 40 (D) 54 (R);  HoR: 183 (D) 247 (R)
  • 70th (1927-1929): Senate: 47 (D) 48 (R);  HoR: 195 (D) 237 (R)

1937-1939 Depression

Causes: cut in New Deal spending.

Severity: Max unemployment 20%; percent change in real GNP: -18%.  Classified a depression, but is often considered a recession linked to the Great Depression.

Presidents:  Calvin Coolidge (R, 1923-1929) and Herbert Hoover (R, 1929-1933) were in power leading up to and into the Great Depression, followed by FDR (D, 1933-1945, died in office).  Hence, Republicans held the executive office for 60% of the time prior the 1937 Depression.

Congresses: The period leading up to the 1937 Depression was a transitional one from Republican power to Democratic power, with the latter dominating both house in 1935-1937 by 2:1 and 3:1 majorities in the Senate and HoR, respectively.  The overall balance of the decade was 60% GOP, 40% Dems.

  • 70th (1927-1929): Senate: 47 (D) 48 (R);  HoR: 195 (D) 237 (R)
  • 71st (1929-1931): Senate: 39 (D) 56 (R);  HoR: 163 (D) 267 (R)
  • 72nd (1931-1933): Senate: 47 (D) 48 (R);  HoR: 216 (D) 218 (R)
  • 73rd (1933-1935): Senate: 59 (D) 36 (R);  HoR: 313 (D) 117 (R)
  • 74th (1935-1937): Senate: 69 (D) 25 (R);  HoR: 322 (D) 103 (R)

1948-1949 Recession

Causes: Post WWII contraction

Severity: Max unemployment 7.9%; percent change in real GNP: -1.5%.  Classified a sharp recession.

Presidents:  The decade leading up to the end of WWII was dominated by Democrats, first FDR (D, 1933-1945, died in office) and then Harry Truman (D, 1945-1953).  Hence, Dems get 100%.

Congresses: This period saw a reversal of the Democrats overwhelming control of Congress (by roughly 4:1 in 1937-1939) to a Republican majority in 1947-1949.  Nevertheless, Democrats controlled Congress 90% of this period.

  • 75th (1937-1939): Senate: 75 (D) 17 (R);  HoR: 333 (D) 89 (R)
  • 76th (1939-1941): Senate: 69 (D) 23 (R);  HoR: 262 (D) 169 (R)
  • 77th (1941-1943): Senate: 66 (D) 28 (R);  HoR: 267 (D) 162 (R)
  • 78th (1943-1945): Senate: 57 (D) 38 (R);  HoR: 222 (D) 209 (R)
  • 79th (1945-1947): Senate: 57 (D) 38 (R);  HoR: 243 (D) 190 (R)
  • 80th (1947-1949): Senate: 45 (D) 51 (R);  HoR: 188 (D) 246 (R)

1953-1954 Recession

Causes: Post Korean War contraction; tightening of monetary policy due to inflation.

Severity: Max unemployment 6.1%; percent change in real GNP: -3.2%.  Classified a sharp recession.

Presidents:  Again, the Democrats controlled 100% of this period through FDR (D, 1933-1945, died in office) and then Harry Truman (D, 1945-1953).

Congresses: There was some variation in power control over this period, with a Republican majority in 1947-1949.  However, Democrats controlled Congress 80% of this period.

  • 78th (1943-1945): Senate: 57 (D) 38 (R);  HoR: 222 (D) 209 (R)
  • 79th (1945-1947): Senate: 57 (D) 38 (R);  HoR: 243 (D) 190 (R)
  • 80th (1947-1949): Senate: 45 (D) 51 (R);  HoR: 188 (D) 246 (R)
  • 81th (1949-1951): Senate: 54 (D) 42 (R);  HoR: 263 (D) 171 (R)
  • 82th (1951-1953): Senate: 48 (D) 47 (R);  HoR: 234 (D) 199 (R)

1957-1958 Recession

Causes: worldwide turndown.

Severity: Max unemployment 7.5%; percent change in real GNP: -3.3%.  Classified a sharp recession.

Presidents:  Harry Truman (D, 1945-1953) was in office in the beginning of the decade prior to 1957, followed by Dwight Eisenhower (R, 1953-1961).  Overall, the Democrats controlled the office for 60% of this period

Congresses: The latter part of the decade was a contentious period for Congress, with power exchanging hand 4 times.  Overall, Democrats controlled Congress 60% of this period.

  • 80th (1947-1949): Senate: 45 (D) 51 (R);  HoR: 188 (D) 246 (R)
  • 81th (1949-1951): Senate: 54 (D) 42 (R);  HoR: 263 (D) 171 (R)
  • 82th (1951-1953): Senate: 48 (D) 47 (R);  HoR: 234 (D) 199 (R)
  • 83rd (1953-1955): Senate: 46 (D) 48 (R);  HoR: 213 (D) 221 (R)
  • 84th (1955-1957): Senate: 48 (D) 47 (R);  HoR: 232 (D) 203 (R)

1973-1975 Oil Crisis Recession

Causes: Vietnam War, OPEC oil production

Severity: Max unemployment 9%; percent change in real GNP: -5%.  Classified as a sharp recession.

Presidents: Lyndon Johnson (D; 1963-1969) took over after JFK was shot in 1963, and with his one additional term he was in power longer than Richard Nixon (R, 1969-1974, resigned from office) during this period.  70% to the Dems, 30% to the GOP.

Congresses: the 5 congressional sessions prior to 1973 were dominated by the Democrats, with 2:1 majorities in both houses from 1965-1967.  100% to the Dems.

  • 88th (1963-1965): Senate: 67 (D) 33 (R);  HoR: 258 (D) 167 (R)
  • 89th (1965-1967): Senate: 68 (D) 32 (R);  HoR: 295 (D) 140 (R)
  • 90th (1967-1969): Senate: 64 (D) 36 (R);  HoR: 248 (D) 187 (R)
  • 91st (1969-1971): Senate: 58 (D) 42 (R);  HoR: 243 (D) 192 (R)
  • 92nd (1971-1973): Senate: 54 (D) 44 (R);  HoR: 255 (D) 180 (R)

1981-1982 Recession

Causes: Iranian Revolution and 1979 energy crisis, inflation control continuing from 1973 recession

Severity: Max unemployment 11%; percent change in real GNP: -3%.  Classified a sharp recession.

Presidents: While Jimmy Carter (D; 1977-1981) is commonly associated with the early 1980s recession, Republicans Richard Nixon (R, 1969-1974, resigned from office) and Gerald Ford (R, 1974-1977) were in power for more of the preceding decade. 60% to the GOP.

Congresses: the Democrats controlled both houses for the 10 years prior to 1981, with 2:1 majorities in the HoR in 1975-1979. 100% to the Dems.

  • 92nd (1971-1973): Senate: 54 (D) 44 (R);  HoR: 255 (D) 180 (R)
  • 93rd (1973-1975): Senate: 56 (D) 42 (R);  HoR: 242 (D) 192 (R)
  • 94th (1975-1977): Senate: 61 (D) 37 (R);  HoR: 291 (D) 144 (R)
  • 95th (1977-1979): Senate: 61 (D) 38 (R);  HoR: 292 (D) 143 (R)
  • 96th (1979-1981): Senate: 58 (D) 41 (R);  HoR: 277 (D) 158 (R)

2001-2003 Recession

Causes: Dot-com bubble, 9/11 attacks

Severity: Max unemployment 11%; percent change in real GNP: -3%.  Classified a sharp recession.

Presidents: The pre-recession period was dominated by the presidency of Bill Clinton (R, 1993-2001), preceded by George Bush Sr. (R, 1989-1993).  Overall, the Dems ran the presidency for 80% of this period.

Congresses: The Democrats controlled both houses from 1991-1997, with power changing to the Republicans in 1997-2001.  Hence 60% to the Dems.

  • 102nd (1991-1993): Senate: 54 (D) 44 (R);  HoR: 255 (D) 180 (R)
  • 103rd (1993-1995): Senate: 56 (D) 42 (R);  HoR: 242 (D) 192 (R)
  • 104th (1995-1997): Senate: 61 (D) 37 (R);  HoR: 291 (D) 144 (R)
  • 105th (1997-1999): Senate: 45 (D) 55 (R);  HoR: 207 (D) 226 (R)
  • 106th (1999-2001): Senate: 45 (D) 55 (R);  HoR: 211 (D) 223 (R)

2007-today Credit Crisis Recession

Causes: Housing bubble and mortgage crisis

Severity: Unsure yet, but unemployment in August 2008 was 6.1%

Presidents: In the decade prior to the informal start to today’s credit crisis, Bill Clinton (D) served part of his second term while George Bush Jr. (R, 2001-present) has been the head of the Executive branch since 2001.  So call it 60% Republican, 40% Democrat

Congresses: Four of the Senates and all five Houses of Representatives leading up to 2007 were controlled by the Republicans.  The 107th Senate was split 50/50, but VP Cheney provided the tie breaking vote.  So 100% Republican control in the Congress leading up to the current economic crisis.

  • 105th (1997-1999): Senate: 45 (D) 55 (R);  HoR: 207 (D) 226 (R)
  • 106th (1999-2001): Senate: 45 (D) 55 (R);  HoR: 211 (D) 223 (R)
  • 107th (2001-2003): Senate: 50 (D) 50 (R);  HoR: 212 (D) 221 (R)
  • 108th (2003-2005): Senate: 48 (D) 51 (R);  HoR: 204 (D) 229 (R)
  • 109th (2005-2007): Senate: 44 (D) 55 (R);  HoR: 202 (D) 232 (R)

Analysis

Overall, Republicans have been in power in the Presidency just 43% of the ten-year period prior to a sharp recession/depression, and in Congress 50% of the time. This is to be compared to the overall time each party has been in control: since 1907, Republicans have been President 52% of the time and have run Congress 41% of the time.  So the Republicans have had more time to be President but have preceded fewer downturns, indicating that Democratic executive governance has led to more downturns.  On the other hand, Republicans have controlled Congress less often yet have been in power 1/2 the time prior to a downturn.  This suggests that Republican congressional governance does not have a great track record when it comes to economic downturns.

If I separate the balance of control by the severity of the downturns, a slightly different picture emerges.  Republicans have controlled the Presidency and Congress for 57% and 67% of the decade prior to a depression. In other words, Republican governance has preceded more severe downturns than Democratic governance.  Democrats have controlled the Presidency and Congress for 63% and 60% of the decade prior to a recession, so have preceded less severe (but nevertheless serious) downturns.

The 1929 Great Depression provides a very illustrative example, as this downturn was preceded by the only period over the past century in which Republicans controlled both the Presidency and Congress for more than a decade: 1921-1933.  While this period oversaw substantial economic expansion with only the 1923 recession to mar it, it also led to the greatest economic downturn the US has ever experienced.  Interestingly, the following period of 1933-1947 – the only period in which the Democrats controlled both the Presidency and Congress for more than a decade – encompassed the 1929 and 1937 Depressions, but was followed by the post-WWII expansion that is largely responsible for the prosperity of today (there were, of course a few recessions immediately following this Democratic era of governance).

The Republicans controlled the Presidency and Congress 80% and 100% of the decade prior to 1929.  For comparison, in the decade prior to the current crisis Republican control has been 60% and 100%.   Indeed, there has been a long period of Republican dominance in the legislative and executive branches, with control over Congress from 1995-2007 and the Presidency since 2001, not unlike the long period of Republican dominance leading up to the 1929 Depression.   We are under very similar party governance conditions as the 1929 Great Depression.

Discussion

Are we headed toward another 1929 Depression, and are the Republicans responsible?  This analysis cannot support such a strong conclusion, as it is very simplistic and does not take into account the many other variables that drive negative economic cycles (such as pandemics, wars or external political events).  However, I make the following claims based on this exercise, which are of course open for debate:

  • Neither the Democrats nor the Republicans hold the high ground when it comes to economic stability.  Economic downturns appear to be more common after a decade of Democratic presidential dominance, while they are also more common after a decade of Republican congressional rule.  Who one blames for bad times depends on which branch you think is most responsible for the economy.
  • Republican governance at the Presidential or Congressional level has preceded more severe economic downturns (i.e. Depressions), notably the 1929 Depression which followed over a decade of Republican dominance in both branches.
  • We are currently in a state of party governance very similar to the 1929 Depression, with Republican control over both the Presidency and Congress over much of the last decade.

As approaches to tackling the current economic crisis unfold, including record government bailouts and unprecedented intervention, it is worth keeping in mind the words of Herbert Hoover (R, 1929-1933) who was elected before the stock market crash of October 1929 and presided over the tough early years of the Great Depression:

“It is just as important that business keep out of government as that government keep out of business” (1928 stump speech on Rugged Individualism)

“Prosperity cannot be restored by raids upon the public Treasury.” (Dec 2nd, 1930 address to Congress)

“Economic depression cannot be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body – the producers and consumers themselves.” (Dec 2nd, 1930 address to Congress)


Sources:

The Citizen’s Compendium: Panic of 1907: http://en.citizendium.org/wiki/Panic_of_1907

The Concise Library of Economics: “Recessions” by Geoffrey H. Moore: http://www.econlib.org/library/Enc/Recessions.html

Office of the Clerk of the House of Representatives, 2006 Statistics of the Congressional Election, recapitulation tables: http://clerk.house.gov/member_info/electionInfo/2006/Table.htm

US Dept. of Labor Bureau of Labor Statistics, Sept. 5 2008 Press Release: http://www.bls.gov/news.release/empsit.nr0.htm

National Bureau of Economic Research, Business Cycle Expansions and Contractions: http://www.nber.org/cycles/

The Crisis of the Old Order, 1919-1933: 1919-1933, The Age of Roosevelt by Arthur Meier Schlesinger & Arthur M. Schlesinger, Jr. (2003): http://books.google.com/books?id=UAjls3YykzgC&dq=Prosperity+cannot+be+restored+by+raids+upon+the+public+Treasury&source=gbs_summary_s&cad=0

Classics of American Political and Constitutional Thought: Origins Through the Civil War by Scott J. Hammond, Kevin R. Hardwick, & Howard L. Lubert (2007): http://books.google.com/books?id=-TiAirQlOYoC&dq=It+is+just+as+important+that+business+keep+out+of+government&source=gbs_summary_s&cad=0

Dynamics of the Party System: Alignment and Realignment of Political Parties in the United States by James L. Sundquist (1983): http://books.google.com/books?id=tAw1GiHjQwgC&dq=Economic+depression+cannot+be+cured+by+legislative+action&source=gbs_summary_s&cad=0

American Presidents: Life Portraits: http://www.americanpresidents.org/

Wikipedia: List of recessions in the United States: http://en.wikipedia.org/wiki/List_of_recessions

Wikipedia: List of Presidents of the United States: http://en.wikipedia.org/wiki/List_of_Presidents_of_the_United_States

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