Does the President own the economy?

We live in an age where the presidency takes on an almost imperial presence. The sheer size of the federal government, the President’s ubiquitous image, and the American people’s faith in the continuous march of democracy in the U.S. all combine to give the office of President an almost mythic status and the belief that the machinations inside the White House ripple out to all corners of the U.S. As a result, we often think that the President somehow owns the economy. For instance, back in March, the New York Times even declared that “Trump owns the economy now, for better or worse.” Even so far back as the 1930s, Presidents were blamed for any economic troubles, such as with President Hoover and the infamous “Hoovervilles.” Clearly, the President gets at least some of the credit or some of the blame for the economy.

Originally, the founders envisioned a much smaller, more hands-off federal government concurrent with the standard of the time. For instance, James Madison stated that the powers of the government are “few and defined.” However, the demands of government over the years have caused it to balloon in size. Now, the federal government is a far cry from what the founders originally had in mind. Similarly, the role of our government in our nation’s economy has changed. Even though our economy is largely made up of private industry, the executive arms of the federal government extend to almost every segment of American business. All copyrights, patents, and trademarks go through the USPTO. Every pharmaceutical drug goes through a rigorous FDA process. Almost every aspect of Wall Street is within the purview of the SEC. All the airways are regulated by the FCC. The list goes on, but the point is clear that the government is heavily involved in the maintenance of the economy. Despite all of this, it is not fair to say that the President, even though they are vested with all executive power of the government, simply owns the economy. Instead, the President maintains the economy.

Even though the federal government seems to touch almost all aspects of business, it is not in an executive role, but more of a maintenance role. For instance, when new issues of stock go through the application process of the SEC, the rules governing the SEC clearly state that the SEC neither approves nor disapproves the new issues, but simply makes their registration effective, so as to not influence any investors’ opinions regarding the company’s quality. Adding onto this, while the President does appoint who heads up the Federal Reserve, the organization itself is largely independent of the government, and this appointment is usually not based on political terms, but on each candidate’s merit. Moreover, as The Atlantic pointed out, the laws of supply and demand that truly govern the economy, do not have any political bias. No matter which political party is in power, the economic engine keeps chugging along.

We need to revise the way we think about the President’s relationship to the overall economy from one where the President rules as supreme executive over the economy to one where the President is charged with maintaining some measure of economic stability. Looking through history, the times when the President made a heavy involvement in the economy were during times of crisis. During the Great Depression, President Roosevelt implemented his New Deal policies, which overhauled many outdated aspects of our economy. Moreover, during the Great Recession, President Obama executed his stimulus package to revive various failing industries. During the pandemic, President Trump also took steps, in conjunction with Congress, to pass a stimulus bill aimed at alleviating some of the financial burden caused by the pandemic. While the President does have tremendous influence over how our nation is perceived by the rest of the world, which can greatly affect our economy, we should refine this image to one where the President does not own the economy, but maintains it, and usually only steps in when times of great crisis are gripping the nation.