Are Democrats better with the economy?

I posted the following comments to a message board on September 14, 2008:

I hope there are people on here who understand economics fairly well. I actually have a bachelor's degree in it, but haven't worked in the field, so I only have a basic understanding. I have come to the conclusion that Libertarians are too isolationist, Republicans try to impose too many restrictions and Democrats want to constantly raise spending and the size of government.

I read an article by Princeton economist Alan Blinder. He was former vice chairman of the Federal Reserve and advised John Kerry during the 2004 election. He says since 1948 the economy has grown faster when the President is a Democrat. He also says that income inequality is closer when Democrats are in charge. I don't think income inequality is a bad thing as long as most people are able to raise their own income. I didn't really understand the discussion on the income rise at the percentile level. It says at the 20th percentile, 80% of people had higher incomes. So at the 95 percentile did only 5% of people earn higher incomes? Anyways it shows a chart and says incomes grew higher under Democrats, but was it at the expense of the majority of the rest of people?

My main issue with this article is that it would be better to see which policies led to growth. I'm sure even members of the same party pursued different policies. One of my professors said the President has little impact on the economy and the author even mentions that. I would like to see a comparison to which party held the majority in Congress during these years. It would also be interesting to see other measures of the economy such as job growth. I read an article a while back by Paul Krugman arguing that Obama would be better at creating jobs. It seems to me his policies would lose jobs. I really do not understand liberal economists who think bigger government is better.

Glenn Beck did an editorial saying that the 10 poorest cities have been run by Democrats for most of the past century. One of commentators mentioned Forbes' 2005 list of the ten U.S. cities with the highest median incomes. Only two of them had current Republican mayors. Of course Beck went beyond just current leaders, but the historical pattern.

Originalist justices

I posted the following comment on a message board on September 15, 2008, but didn't get much of an answer:

Last night 60 Minutes played a rerun of an interview with Justice Scalia that originally aired in April. In it is says that Thomas is the only other originalist. I was surprised by this. What about Roberts and Alito? I have heard about strict constitutionalists, but is that different?

The website includes video and a transcript. The part I am referring to is around 8:25 in section 2. Here is what the transcript on page 7 had: "Scalia deferential? That's something you never hear about him on the court, where he has been unable to persuade his fellow justices to come over to his way of thinking. The only other originalist on the court is Justice Clarence Thomas."

Divided Government Is Best for the Market

On September 12, 2008 Donald L. Luskin, chief investment officer at Trend Macrolytics LLC., wrote an editorial for The Wall Street Journal.  Here is an excerpt:

"So there you go. Forget about the tax increases. Forget about the regulations, the protectionism, and the union influence. Democrats are great for growth. The study proves it!

I've run the numbers myself. Superficially at least, the Democratic claims are true: Since 1948, the Standard & Poor's 500 total return (capital gains plus dividends) has averaged 15.6% when a Democrat was in the White House and only 11.1% when a Republican was in the White House.

You get a similar result if you look at growth in real gross domestic product. Under Democratic presidents, the average since 1948 has been 4.2%. Under Republican presidents it has been only 2.8%.

But it's not so simple when you study that "study." First, not all Democrats act like Democrats, and not all Republicans act like Republicans. John F. Kennedy, for example, was an enthusiastic supply-side tax cutter, and George H.W. Bush raised taxes. Bill Clinton promoted free trade, and Richard Nixon imposed wage and price controls.

If you assign those four presidents to the opposite party based on that -- make the two Democrats into Republicans and the two Republicans into Democrats -- the numbers completely reverse. Now stocks average 14.7% under Republicans and only 10.5% under Democrats.

In fact, it turns out that if you do just one single switch -- if you make Richard Nixon into a Democrat -- it's enough to reverse the numbers. Then stocks average 14% under Republicans and only 12.1% under Democrats. This fact discredits this whole study more than it does Republicans, or even Richard Nixon himself. Any analysis that can be undone by omitting or changing a single data point isn't very robust."