Byrd Eastham

Miller Center launches project on the presidency and the economy

By Robert Brickhouse

Do the carefully set economic and spending policies of U.S. presidents have a decisive effect on economic performance?

The public seems to think so. Former President George Bush lost his re-election bid partly because of the perception that he failed to maintain America's economic strength. And President Clinton has weathered potentially crippling scandals in part because voters believe his policies have sustained high economic growth, low inflation and record levels of employment.

Government officials and scholars have begun questioning the assumption. It is often argued today that the chair of the Federal Reserve, Wall Street and international capital markets have a far greater impact on the economy than does the president. To address this topic, the U.Va. Miller Center of Public Affairs is launching a research program to examine the true relationship between presidential policy and economic performance.

"The Miller Center intends to provoke rigorous, high-level public policy debate," said Francis Gavin, director of the center's "Presidency and Macroeconomic Policy Project."

An inaugural conference Oct. 14-16 will be held to set the course for the project, with discussions by some of the nation's most distinguished economists, policy experts and historians. Participants will include Gene Sperling, President Clinton's economic adviser and director of the National Economic Council; Theodore Sorensen, longtime adviser to Democrats, including President John Kennedy; Sylvia Matthews, deputy director of the Office of Management and Budget; James K. Galbraith, professor of government at the LBJ School of Public Affairs at the University of Texas; and dozens of other specialists from think tanks, government agencies and universities around the country.

"The goal of the conference is to garner the best possible guidance and counsel² for the new research program, Gavin said.

In the 1960s, most economists -- and certainly most executive branch policymakers -- believed that presidential policy was crucial to America's well-being, Gavin said. Careful presidential oversight of fiscal, regulatory, trade and social welfare policies was considered essential to tame market forces and maintain steady economic growth.

But a marked shift from this view has occurred. "Within the academy, on Wall Street and even in government circles, doubts have grown about the power of presidential policy to alter macroeconomic performance," Gavin said.

The Miller Center project will undertake an examination of past presidential policies, as well as research to measure and interpret their impact. Among questions scholars will pursue:

• Were presidential policies of the 1960s responsible for the "stagflation" of the '70s?
• How did Nixon's "New Economic Policy² influence America's position in the world economy?
• What was the relation between the JFK/LBJ and Reagan tax cuts and economic growth in the 1960s and 1980s?
• What have been the consequences of antitrust policy for technological innovation and long-term growth?
• How important is a balanced budget to economic performance?

Such questions "are of fundamental importance," Gavin said. "But, for the most part, historians and economists have shied away from them. Often, the intellectual vacuum has been filled by the claims of politicians and pundits."

The Miller Center specializes in research on the national policymaking process, the American presidency and the executive branch.