Grasping Reality on TypePad, by Brad DeLong

• Suppose you were a stranger to humanity, and looked at this graph of trends in the investment share of output under various administrations.
• Would you then credit the claim that the red-presidents political party was dedicated to boosting investment in America, and that the blue-presidents political party was dedicated to sacrificing investment and growth to achieve egalitarian redistributional social goals?
• No.
  • One might claim that presidents don't control the economy or economic policy.
  • But presidents get most of what they ask for in terms of economic policy, and economic policy has a substantial impact on the actual economy.
  • One might claim that the big collapses of investment from the S&L and the subprime housing crises were bad luck for both Bush presidents.
  • But didn't mis- and under-regulation have something to do with it?

FRED: Gross Private Domestic Investment/Nominal Potential Gross Domestic Product https://fred.stlouisfed.org/graph/?graph_id=516170&rn=79#0...