How much control does the President truly have over the economy?

[emilyn1997]

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?

[1714789206]

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[1714789206]

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[Robert Paulson]

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.

[Pente]

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.

[bobdutica]

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.

[teukon]

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?

[Robert Paulson]

Are you taking "fractional reserve banking" to include fraud where banks pretend that they are actually engaged in deposit banking?

Yes, i am.
fractional reserve banking is a form of fraud.
the fact that the market should be free does not mean that there is no rule of law to prevent fraud.
if a bank wants to loan a client's money it needs to ask the client to loan it to the bank first.

[Honeypot]

Not as much as people blame/praise them for it. Certainly less than what the current president falsely promised he can do - or clearly on purpose implied he could do. "Let me be clear..."

But by liberal logic, bush was in complete control of the housing markets and obama is only being 'obstructed' by......everything else that is not their cup of tea.

I think your education can clearly tell you which conclusion is the more logical one. Just as you may not blame the current lack of significant progress fully on the empty suit, you cannot fully place blame on the previous downturn as brainchild of bush jr. Economics have a life of their own.

We are even now relatively a free market society. People who are just waking up to the intricacies of the weave between politics, money, and influence based institutions have no right to screech and wail that present system in US is something they can criticize - in other nations they are taken for granted that it is that corrupt.

President has small slice of the pie in terms of economic influence. His sphere of influence is mainly centered around soft influence in domestic matters + executive power of the state to command the armed forces and intelligence organs who can deliver the pain to those who need killing. Any further influence on economic spheres of influence can be considered 'extracurricular'.

Now if you were to discuss IF those 'extracurriculars' are actually like so in these times, that's another matter all together. But certainly in US president's main sphere of influence lies in areas of political and military control.

[waldox]

president can write or influence laws that can effect the economy

[teukon]

Are you taking "fractional reserve banking" to include fraud where banks pretend that they are actually engaged in deposit banking?

Yes, i am.
fractional reserve banking is a form of fraud.
the fact that the market should be free does not mean that there is no rule of law to prevent fraud.
if a bank wants to loan a client's money it needs to ask the client to loan it to the bank first.

Ok.  I agree that free market does not imply the freedom to commit fraud.

I don't include "fraud" in my definition of "fractional reserve banking"; I see it instead as a form of gambling.

[keithers]

He personally doesn't have that mich power, it is the people behind him in the shadows that pull the strings. The Federal Reserve obviously has major power over the country and basically owns it.

[BurtW]

From the Hitchhikers Guide to the Galaxy:

President of the Imperial Galactic Government
The President is very much a figurehead - he wields no real power whatsoever. He is apparently chosen by the government, but the qualities he is required to display are not those of leadership but those of finely judged outrage. For this reason the President is always a controversial choice, always an infuriating but fascinating character. His job is not to wield power but to draw attention away from it.

An orange sash is what the President of the Galaxy traditionally wears.

On those criteria Zaphod Beeblebrox is one of the most successful Presidents the Galaxy has ever had. He spent two of his ten Presidential years in prison for fraud. Very very few people realize that the President and the Government have virtually no power at all, and of these very few people only six know whence ultimate political power is wielded. Most of the others secretly believe that the ultimate decision-making process is handled by a computer. They couldn't be more wrong.

[r34tr783tr78]

The President has some control of the financial/budget policy (with the Congress), but almost none on the monetary policy. The FED made much more for the recovery of the Economy than the President. Just see the mess in which Europe is. The only difference is the conservative monetary policy of the ECB (only now, to late, starting to change).

[bobdutica]

From the Hitchhikers Guide to the Galaxy:

President of the Imperial Galactic Government
The President is very much a figurehead - he wields no real power whatsoever. He is apparently chosen by the government, but the qualities he is required to display are not those of leadership but those of finely judged outrage. For this reason the President is always a controversial choice, always an infuriating but fascinating character. His job is not to wield power but to draw attention away from it.

An orange sash is what the President of the Galaxy traditionally wears.

On those criteria Zaphod Beeblebrox is one of the most successful Presidents the Galaxy has ever had. He spent two of his ten Presidential years in prison for fraud. Very very few people realize that the President and the Government have virtually no power at all, and of these very few people only six know whence ultimate political power is wielded. Most of the others secretly believe that the ultimate decision-making process is handled by a computer. They couldn't be more wrong.

I just added Hitchhikers Guide to the Galaxy to my "must read" list. It appears to contain a great deal of wisdom about political power.

[keithers]

On a scale of 1-10, how much do you think the president actually even wholeheartedly cares about the economy vs. just wanting to make sure that everyone is paying taxes?

[r34tr783tr78]

They do care for the Economy. All studies show that people vote taking in account their pockets. If they are empty, they vote against the president.

[solarion]

The FED made much more for the recovery of the Economy than the President.

The fed isn't part of the US government. They merely wield the authority that congress granted them. So now we pay interest on currency we could print debt free.

A president could have a great deal of influence over the economy. He could do what Kennedy did and return the power to print debt free currency to the treasury where it belongs and short circuit the fed. Then he could decide NOT to drive around dallas in a convertible.

[keithers]

They do care for the Economy. All studies show that people vote taking in account their pockets. If they are empty, they vote against the president.

If you vote against the current president, you still have to vote for the other candidate, who will end up doing the exact same thing. 

[r34tr783tr78]

There are independent candidates, even if they haven't a chance to win.
Anyway, I see some differences between republicans and democrats.

[solarion]

Anyway, I see some differences between republicans and democrats.

Absolutely! One of the parties pretends to be pro gay rights.

Voting has no effect on the continuous march of one world government/collectivism. If it did it'd be banned.

[OROBTC]

...

OP asked:

"How much control does the President truly have over the economy?"

OROBTC responds:

It depends.  .gov or the President can mess up the economy very quickly with bad decisions, but to build the economy back up takes time and determination.  The populist (= pandering) solutions usually work out poorly... 

Free enterprise / Liberty / Capitalism have a bad popular taint to them now as concepts, but that is how America became great.  Now we have filthy banksters and corrupt politicians who have hijacked the USA.

"Our debts and our sins are greater than we think."
-- Wm Shakespeare