How much control does the President truly have over the economy? - page 3.

teukon

legendary

Activity: 1246

Merit: 1011

Quote from: Robert Paulson on May 02, 2014, 04:38:54 PM

This assessment is partially correct.
the president can't fix the economy any better than the soviet union could centrally manage theirs successfully, it is not possible to reach economic prosperity by having someone with a gun telling everyone how much to produce of everything.

the way modern economies work today is broken.
the main problem is that we no longer have free markets, mainly because central banks try to centrally control the amount of money and credit in circulation by setting an arbitrary interest rate, instead of letting the market decide what the interest should be.
the president could in theory abolish the central bank, and stop the commercial banks from conducting fractional reserve lending, and stop propping up failed businesses, which is why he is somewhat responsible for this mess.

If the president were to "stop the commercial banks from conducting fractional reserve lending" then he would be interfering with the free market. Are you taking "fractional reserve banking" to include fraud where banks pretend that they are actually engaged in deposit banking?

bobdutica

newbie

Activity: 53

Merit: 0

President Andrew Jackson used all the political capital he could muster to eliminate the central bank. He risked his entire political legacy on this battle, and he won. He eliminated the central bank, and over the next 75 years or so the United States experienced the greatest period of economic growth ever seen in history prior to that time. It wasn't until 1913 that the central bankers were once again able to dig their claws into the U.S. economy. Since the establishment of the Federal Reserve in 1913, the value of U.S. currency has lost 95% of its value.

Presidents do have considerable opportunity to affect the economy either positively or negatively. Unfortunately many implement policies that harm the economy more than help it.

Pente

hero member

Activity: 528

Merit: 527

If the president made it his top priority to cut government spending and reduce regulations, I believe he could greatly affect the economy in the long run.

The president also has certain powers that could reduce costs & at the same time show his resolve in cutting spending. For instance, he could give a full pardon to every person in prison on a drug charge, state he will continue to pardon all drug charges the rest of his term, and that would be the end to the war on drugs (at least at the federal level).

Of course, all of this is moot. The goal of presidents is to increase federal power, regardless of the cost to the economy.

Robert Paulson

sr. member

Activity: 448

Merit: 250

This assessment is partially correct.
the president can't fix the economy any better than the soviet union could centrally manage theirs successfully, it is not possible to reach economic prosperity by having someone with a gun telling everyone how much to produce of everything.

the way modern economies work today is broken.
the main problem is that we no longer have free markets, mainly because central banks try to centrally control the amount of money and credit in circulation by setting an arbitrary interest rate, instead of letting the market decide what the interest should be.
the president could in theory abolish the central bank, and stop the commercial banks from conducting fractional reserve lending, and stop propping up failed businesses, which is why he is somewhat responsible for this mess.

emilyn1997

newbie

Activity: 1

Merit: 0

ven though this question risks replies from some college freshmen and sophomores who have one or two macroeconomics classes under their belts and therefore should be running the Treasury Department, I want to ask it.
A buddy of mine who has a degree in economics, but hasn't really used it for quite some time now in his current profession stated that the President really doesn't have all that much control over the economy.
Bush really isn't to blame for the downturn since it was third-party forces outside of his control. His biggest blunder with the economy was the appearance of his mishandling, but he's not really to blame.
Same with Obama. Obama can't snap his fingers and cure everything. His biggest blunder, too, is the appearance that he's not trying to fix it, and is instead focusing on other non-economic issues.
So, is this assessment accurate?

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