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Aside from wartime, are there any Presidency and national job number change correlations that are widely agreed to be provably causal?

Jobs go up, Presidents preen. Jobs go down, Presidents blame their rivals and predecessors, (who often blame the President). Meanwhile job numbers might change for reasons both obvious and subtle that have nothing to do with Presidents or their rivals, or at least nothing to do with those things they did deliberately to increase jobs.


If possible, let's avoid considering manipulative or tricky methods of Presidential job growth -- i.e. shortening some metric and calling the resulting (unconverted) larger number "growth", or having two full-time workers in different trades swap morning shifts, and calling the result four jobs.

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  • Like this en.wikipedia.org/wiki/Public_Works_Administration?
    – SJuan76
    Mar 15 '17 at 10:10
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    Any growth in the private sector is contributory at best by definition of causality. Even if a private organization were to form entirely to support or oppose the presidents agenda all of those jobs would not be caused by the president the cause would be the organizers. The president only contributes through policy and promise Mar 15 '17 at 15:20
  • I'd recommend migrating this to Economics. It's likely on topic here (because it's about the outcomes of policy), but it might get better answers over there. Mar 15 '17 at 15:55
  • @SoylentGray, Re "any growth": this Q is about "change", which might be growth or its opposite.
    – agc
    Mar 16 '17 at 15:08
  • @SJuan76, Sure, please post that as an answer.
    – agc
    Mar 16 '17 at 15:23
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Economically, there isn't wide consensus about anything related to jobs. Take the minimum wage for example. The Econ 101 story is that increasing prices reduces the quantity demanded. However, there was a study from well regarded economists that turned into a book that showed a circumstance where employment increased at the same time as the minimum wage did. Other economists tried to reproduce the result with a different data source but instead found the originally expected employment drop.

The net result? People who like the idea of employment increasing as the minimum wage cite Card and Krueger's study supporting that. People who believe that employment and the minimum wage vary inversely cite Neumark and Wascher or other studies that show that. And that's a policy that lends itself to natural experiments where the minimum wage changes in some otherwise similar counties but not in others.

The Card/Krueger study surveyed employment at small local restaurants on the New Jersey/Pennsylvania border after New Jersey increased the minimum wage and Pennsylvania didn't. The subsequent Neumark and Wascher study looked at payroll data from larger restaurant chains in the same area. Why did they produce different results?

There's any number of speculative possibilities. Perhaps different size businesses react differently. Perhaps some workers prefer the larger chains but when laid off go to work at the small chains. Perhaps small chains don't properly understand how to pay people and underpay normally. Perhaps young people choose education over low wages. Any or perhaps all of these could be true, but we don't know.

Anyway, the point is that this is an area with large amounts of data, easily processed. And there is still disagreement and a lack of consensus. Many other areas of policy lack the natural experiments available with minimum wage laws. It's difficult to isolate policies. Too much is happening. For example, if one country has a lax monetary policy and the other has strict, does that explain why one has higher growth? Or is that the result of tax policy? Or the recent discovery of new oil fields? Or education policy? Draconian regulations? For whatever reason, countries don't seem satisfied to just change one aspect of policy. New administrations want to change many things at the same time. Some may help and others hurt. Which are which?

Rising deficits are stimulative! Except in the late 1990s in the US, falling deficits corresponded with growth. And in the 2008-2016 period, the highest deficits were in the period with the lowest growth. Trade is good! Except some economists now argue that trade is bad. And others argue that it is good for some people and bad for others.

Even historical periods like the Great Depression aren't well understood. Horrible monetary policy in the 1929-1933 period (dating back to the creation of the Federal Reserve during Woodrow Wilson's presidency). Trade wars (Herbert Hoover). Collapse of the post war system of reparations and borrowing (that Wilson started). Comparatively small government (Warren Harding and Calvin Coolidge). Yet Hoover and then Franklin Delano Roosevelt increased spending and the deficit and the depression persisted into the 1940s. It ended with World War II. The standard post war recession and things were back to normal.

John F. Kennedy and Ronald Reagan cut tax rates and the economy improved. Bill Clinton and Barack Obama increased taxes and the economy improved.

If you're waiting for economists to reach consensus, you'll be waiting a long time.

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    This is good, but the president does not raise minimum wage, congress does. So the president is not the cause of minimum wage changes. Mar 15 '17 at 15:49
  • @SoylentGray, Presidents can sign laws or exercise the veto, which can effect or mostly check congressional wage setting.
    – agc
    Mar 16 '17 at 15:21
  • @agc - But that would not be causal... That would be contributory Mar 16 '17 at 15:39
  • @SoylentGray, Re "contributory": Strictly speaking, that's correct. Practically... Presidential vetos fail 7% of the time, and some minimum wage vetos have prevailed, but I don't know if any have been overridden. For this Q, we'd only be interested in MW vetos and signings that correlated with actual job growth, so an instance of an overridden MW veto that correlated with job growth might not be relevant.
    – agc
    Mar 16 '17 at 16:41
  • The diversity of economic opinion aside, perhaps some less specialized proof, (i.e. general or logical), might suffice.
    – agc
    Mar 16 '17 at 16:55
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No because the president does not do anything that directly causes job growth in the private sector. At most the president is a major contributor to the economic environment that lead to job growth.

One of the things that economists look at is what is driving growth in what sectors. Nixon opened up China for trade with the US. The growth there happened pretty slowly, and it was in the midst of a recession. How much that recession had to do with the slow growth is hard to say. Then Reagan came in with some new policies in the 80's and trade with China took off. But it was really felt during the Clinton era when he granted China Most Favored Nation Status.

So who gets the credit(or the blame) for the growth that we saw in the 90's until now with China? They all do. Who caused it? None of them. But each of them played a part in creating an environment that allowed for that growth.

There are things that a president can do to directly impact growth, but he can not do them alone. He can propose policy to affect changes in the tax structure, immigration, and tariffs that allow for companies to change the way they do business. But he can only do that with the consent of congress.

As you noted the only thing he can directly do with out congress to have a great impact would be to wage war. For 90 days the president can take military action before congress can step in. 90 days is plenty long enough to destroy an economy or two through war.

That is the beauty and curse of Job Numbers

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  • I like this answer best, so far...
    – agc
    Mar 16 '17 at 21:34

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