Here’s a frightening factoid for Donald Trump as he prepares to take office next month: Every Republican president since World War II has been in power during at least one recession.
Of course, as the saying goes, past performance is not necessarily indicative of future results and the billionaire developer may well avoid a downturn on his watch.
But with the economic expansion soon to become the third-longest on record, the risk of a contraction occurring during his time in office can’t be cavalierly dismissed.
“Republican presidents seemingly can't do without” recessions, Joachim Fels, global economic adviser for Pacific Investment Management Co., wrote in a blog post dated Dec. 12.
The same can’t be said of Democrats. Outgoing President Barack Obama did preside over an economic downturn in his first six months in office – one he inherited from his predecessor, Republican George W. Bush. John F. Kennedy took office just before a recession ended. And the U.S. entered and exited slumps when Jimmy Carter and Harry Truman were in charge.
But it was recession-free during the tenures of Democrats Lyndon Johnson in the 1960s and Bill Clinton in the 1990s.
"The U.S. economy has performed better when the president of the United States is a Democrat rather than a Republican," Princeton University professors Alan Blinder and Mark Watson wrote in a paper published in the American Economic Review this year.
The difference isn't due to more expansionary fiscal and monetary policies under Democrats, according to Blinder, who served in the Clinton White House, and Watson.
Instead it appears to stem from less costly oil shocks, a more favorable international environment, productivity-boosting technological advances and perhaps more optimistic consumers, they wrote. Some of those disparities may be down to better policies, but luck also played a role.
Fels cautioned against overestimating the ability of presidents to prevent recessions – or to create them for that matter. After all, it's often the Federal Reserve which determines the ups and downs of the economy through changes in interest rates.
What's more, some Republican presidents just caught a bad break, Fels said. Dwight Eisenhower, for instance, took office in 1953 when the U.S. was still enmeshed in the Korean War.
Others inherited recession-prone economies from their Democratic predecessors. Inflation was running above 10 percent when Ronald Reagan took over from Carter in January 1981, and then-Fed Chairman Paul Volcker was determined to squelch it.
Trump said during the campaign that his plans would result in 3.5 percent annual growth, well above the 2.1 percent pace of the current expansion. Still, there's no denying the Republican record when it comes to recessions. If Trump wants to ensure himself a successful presidency, that might be another party tradition the unconventional leader-in waiting may have to break.
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