It’s time to update my analysis of unemployment trends under Democratic and Republican administrations to illustrate the contrasting impact that D and R presidents can have on the economy. I can’t say it often or loud enough. Democrats are better than Republicans at managing the American economy. I have the receipts. It’s not even close. And I honestly don’t understand why anyone would even question it.
Biden has targeted job creation as one of his top policy goals, and it infuses every aspect of his domestic agenda. But polls continue to question their ability to handle the economy and rate Republicans higher on managing the economy. So let’s look at the numbers.
Since 1948, there have been 7 Republican presidents: Eisenhower, Nixon, Ford, Reagan, GHW Bush, GW Bush and Donald Trump. There have been 7 Democratic presidents in the same period: Truman, Kennedy, Johnson, Carter, Clinton, Obama and Biden. So there are plenty of statistics to determine which party is doing the best job of creating jobs and managing the economy in America. If the Republicans really were better than the Democrats at managing the economy, there should be evidence, right?
I use unemployment statistics as a proxy for the health of the economy, specifically the unemployment rate published by the Bureau of Labor Statistics for each year since 1948. Using January figures, I give each president at least one year to establish an economic footprint, and I employ a consistent, non- seasonal benchmark to compare each administration.
The chart at the top shows the BLS published unemployment data for January of each year since 1948. We can compare the change in the unemployment rate over each president’s term in office and thereby extract a trend in employment during each administration. This will illustrate the impact each president’s administration has had on the American economy.
Since 1948, with the exception of Jimmy Carter, every Democratic president has seen the economy improve and unemployment fall significantly under his administration. Carter had to deal with the oil crisis of 1979 and never recovered. In contrast, with the exceptions of Gerald Ford and Ronald Reagan’s first term, every Republican president has presided over an economy that has experienced consistent increases in unemployment. Reagan enjoyed a strong recovery after the Carter oil crisis years in his first term, but in his second term unemployment showed a consistent rise. And of course, while unemployment improved under Ford, he was in office for too short a time to effectively assess his impact. Ford’s finances may also have benefited from the enormous national relief of no longer having Tricky Dick as our CEO.
UNEMPLOYMENT BY PRESIDENTIAL ADMINISTRATIONS, 1948-2021
| Chairman | D/R | Start Jan | End of Jan | annual change % |
| Truman | D | 1949 | 1953 | -0.61 |
| Eisenhower | R | 1954 | 1961 | 0.25 |
| Kennedy | D | 1962 | 1964 | -0.1 |
| Johnson | D | 1965 | 1969 | -0.33 |
| Nixon | R | 1970 | 1975 | 0.51 |
| Ford | R | 1976 | 1977 | -0.4 |
| Carter | D | 1978 | 1981 | 0.37 |
| Reagan | R | 1982 | 1989 | -0.6 |
| GHW Bush | R | 1990 | 1993 | 0.66 |
| Clinton | D | 1994 | 2001 | -0.35 |
| GW Bush | R | 2002 | 2009 | 0.08 |
| Obama | D | 2010 | 2017 | -0.79 |
| Trump | R | 2018 | 2021 | 0.64 |
| Biden | D | 2022 | 2024 | -0.15 |
Based on a linear regression of the data for each president over the last 75 years, the average Republican president saw the unemployment rate rise by 0.16 percent per year, while Democratic presidents saw unemployment numbers fall by an average of 0.3 percent each year.
Obama’s performance is particularly striking. After inheriting the economic mess that W gave him (2 unfunded wars, massive tax handouts and a Wall Street collapse), Obama was able to bring unemployment down from 9.8 to 4.7 percent during his 8 years in office.
Trump inherited a strong economy and seemingly kept unemployment low in his first 3 years, but was killed by his mismanagement of the COVID pandemic in his last year. In comparison, Obama ruled through 2 potential pandemics, the H1N1 flu outbreak in 2009 and also the terrifying Ebola outbreak in 2014. (Remember how badly Obama mishandled the deadly Ebola crisis that killed… wait for it… 2 Americans?? ) Yet the Obama administration still managed to preside over the strongest economic recovery in the past 75 years.
A 2010 paper by Govts comparing historical Dem and Republican handling of the US economy used a different indicator but came to the same conclusion. And even offered a theory to explain it.
The fundamental divide between Republicans and Democrats in economic theory is between John Maynard Keynes and Friedrich Hayek. You don’t need to know anything about economic theory to know that Keynes believed that government is a fundamentally unmanageable partner in the economic welfare of the nation, and Hayek believed that it is not.
Since Democratic presidents generally used Keynesian economic policies during that period, and Republican presidents generally used Hayekian policies, we are able to compare how the nation’s labor force and its economic well-being fared under each economic theory.
Biden was handed a similar COVID-affected financial disaster. Bidenomics has created another strong economy with a clearly rising unemployment trend. Biden’s unemployment numbers have shown consistent improvement, but have suffered with most of the improvement coming in the first year, so Biden’s initial benchmark was already low. It is very difficult to show consistent improvement when unemployment is already below 5 percent. Merely maintaining low unemployment would be considered a general success, let alone reducing it further.
While unemployment is only one aspect of the overall economy, it is a strong indicator of the success or failure of the presidency’s economic impact. It’s pretty clear that Democratic economic policies have been far more beneficial to Americans’ pocketbooks than Republican policies, at least since the end of World War II. A pattern has emerged where Republican presidents leave office with an economic disaster for the next Democratic president to clean up. The good news is that we’ve been able to do that consistently. Spread the word.