As pictures can convey more than blah-blah-blah words, here’s a graphic to go along with my last entry on government balance of power and economic downturns. For the period 1910-2009, I’ve plotted the change in real GDP per year (from 1930 to 2007), overlaying which party had the balance in power in the Presidency, Senate and House where the usual blue = Democrat, red = Republican color scheme applies. The outer black bands indicate the 19 contraction periods (downturns) during the time shown as identified by the National Bureau of Economic Research. Major recessions/depressions occur when the change in GDP gets close to zero (there are about 7 of these after 1950). The period between 1930 and 1945 was definitely a roller-coaster, and the economy (at least GDP) has been a lot more stable since 1950. I have failed to indicate any important world events (e.g., World War II, Vietnam War) that could have had a significant impact on the turn in US GDP, so please take care in your interpretations.
Again, I don’t draw any strong conclusions (i.e. blame) from this, although frankly I was surprised at how rarely the Republicans have held power over the executive and legislative branches over the past century (i.e., there is a lot of blue up there).
- National Bureau of Economic Research Business Cycles: http://www.nber.org/cycles/
- Recapitulation Tables for 2006 US Election, http://clerk.house.gov/member_info/electionInfo/2006/Table.htm