More on Democratic Presidencies and the Economy

I mentioned earlier that Larry Bartels has a new book about how Democratic Presidencies are significantly correlated with better economic growth. Some economists – Paul Krugman is one – are unsure what to make of this.

So what’s going on? Paul Krugman says he’s uncertain about Bartels’s results because he can’t figure out a “plausible mechanism” for them — a common reaction among economists, who generally don’t believe that presidents influence the economy enough to produce the kinds of differences Bartels documents. Bartels himself isn’t sure what causes the effect either…

…but the effect is there. There’s enough data to say that it’s unlikely to be coincidental. So the issue isn’t that the effect is illusory – it’s that economists don’t understand everything that is going on. Which isn’t surprising, since economics is a social science, and social sciences are “sticky” (compared to “hard” sciences like physics or chemistry). I would think good economists would be interested in figuring out why they can’t explain this (or, in other words, what the actual mechanism is), rather than discounting the results. You don’t throw out data that doesn’t fit the theory – you change the theory to accommodate new facts.