Memo: The President Doesn't 'Run the Economy'

What will disabuse Americans of the notion that the president 'runs the economy'? Depending on one's party, good economic news is attributed to the president or else to his predecessor of the opposite party, and vice versa for bad economic news. In reality the president usually has little direct effect on the economy for better or for worse, and the tendency to credit or blame him has more to do with people's psychological need for a figurehead to explain the direction of complex forces beyond their understanding or control. 

Neither Trump nor Obama have much of anything to do with the relatively good economic news of recent months. The trends under Trump have largely been a continuation of those under Obama, for better and for worse. Republicans have come down with amnesia when it comes to the inconvenient truth that the labor force participation rate is still at its lowest since the 1970s. Underemployment is commonplace: work abounds, but good jobs with good benefits for the most needy job-seekers are still too hard to come by, especially outside of large cities. Republicans were right to point this out under Obama, and this truth has not changed under Trump. The point, again, is not to blame or credit either president, but to not let partisanship or ideology cloud us to the continuity of both good and bad news.

The state of the economy is largely outside of the president's control. Ideologues love to exaggerate the effect of policy -- and to be sure, policy is not irrelevant to the state of the economy -- but I have been pounding this drum for as long as I have been involved in politics: the credit and blame Americans assign to the president for the state of the economy is so misplaced and exaggerated that it borders on the surreal. Politicians and activists feed into it because they can't resist the logic of the incentives to claim credit for good news. Perhaps there is no getting around it: perhaps it is just an aspect of mob rule in a democracy.
 

Alex Knepper