The business cycle doesn’t care who’s president

PHOTOGRAPH Harry S. Truman Library

On this graph showing the U.S. economy since World War II, the squiggly line represents GDP in trillions of dollars. The straight line is the average growth rate to 2007. Projecting the trend line to today, you can see how much the U.S. has lost in the crisis. Also, the limits of presidential power.


Harry Truman

The 1948-49 recession was mostly mild, but not for all. Truman later said, “It’s a recession when your neighbor loses his job; it’s a depression when you lose yours.”


Dwight D. Eisenhower


John F. Kennedy

JFK endeared himself to Keynesians by pressing for tax cuts to stimulate spending when growth was weak. But no one wanted to raise taxes later when the economy needed cooling off.


Lyndon B. Johnson

Economic growth in the soaring Sixties tempted Johnson to overspend on the Vietnam War and social programs. Inflation rose as the economy overheated.


Richard Nixon

Nixon twice imposed price controls to quell inflation. Shortages resulted as the economy refused to bend to his will.


Gerald Ford

A five-month Arab oil embargo contributed to “stagflation” — rising prices and slumping output. Ford responded with “Whip Inflation Now” buttons.


Jimmy Carter

Carter was a one-term president largely because he couldn’t curb inflation and strengthen growth. “Too many of us ... worship self-indulgence,” he said.


Ronald Reagan

In Reagan’s first term the jobless rate hit 10.8 percent. But the recession killed inflation, touching off a stock market boom that helped him win a second term.


George H.W. Bush


Bill Clinton

Clinton occupied the Oval Office for most of the longest economic expansion since at least 1854. But a recession began two months after his second term ended.


George W. Bush


Barack Obama

GDP trend line $16.4 trillion

GDP in 2005 dollars $13.5 trillion


Obama inherited deep trouble. In the final quarter of 2008, the U.S. economy shrank at an annual rate of 8.9 percent. It’s growing again, but not briskly enough to return output to its long-term trend.

NOTES Plotted on a logarithmic scale to compare recent movements with the past, when the economy was smaller. GDP adjusted using 2005 dollars.


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