A Brief Political History Of Recessions

Aug 28, 2019
Originally published on August 29, 2019 5:34 am
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DAVID GREENE, HOST:

Fears of a recession have been filling the news lately, affecting the markets and upsetting predictions for the 2020 election. No incumbent president wants to preside over a recession, and few take the blame for them when they do. This is Herbert Hoover in 1932, denying responsibility for the Great Depression.

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HERBERT HOOVER: The strategy of the Democratic Party has been an effort to implant in the unthinking mind, through deliberate misrepresentation, the colossal falsehood that the Republican Party is responsible for this worldwide catastrophe.

GREENE: All right. Just one example of not my fault coming from a president. So recessions are a topic this week in our Ask Cokie segment. Commentator Cokie Roberts joins us regularly to talk about how government politics work. Hi, Cokie.

COKIE ROBERTS, BYLINE: Hi, David.

GREENE: All right. So our first question really is more of a political one than, I think, an economic one. Teri Williams writes, it seems like Republicans get us into them - being recessions - and Democrats get us out of them.

ROBERTS: Well, many economists cite 1857 as the year of the first big recession, and a Democrat, James Buchanan, was president. There was a run on the banks, David, and for a whole variety of reasons. But for poor old James Buchanan, the economy was the least of his problems, since the country was falling apart.

GREENE: Right. Bad when a recession is the least of your problems.

ROBERTS: Right.

GREENE: This is our next question.

MICAH ENGBER: Micah Engber here from Portland, Maine. When it comes right down to it, does a president really have much control over recessions, or do they simply take the blame or credit for the economy?

GREENE: Good question. How much does a president really affect all this?

ROBERTS: Well, they're quick, of course, to take the credit for a good economy and not so willing, as we just heard from Herbert Hoover, to take the blame for a bad one. But, look, of course, there are all kinds of outside forces affecting the economy that have hardly anything to do with who's president. But a president can make things better or worse. Herbert Hoover was very slow to understand the seriousness of the Great Depression, and he allowed the Smoot-Hawley Tariff to go into effect, which many people believe contributed to the Depression. Later in his presidency, he started to support stimulative measures. But by then it was too late.

And there are those who argue now that President Trump's trade policies could get us into a recession. But again, as you know, there are all sorts of factors that affect the economy, including what's happening in other countries, like Germany and China.

GREENE: You know, a couple of our listeners, Cokie, I mean, they wanted to know both what administrations can actually do to prevent or fix a downturn if it looks to be happening, but also if there's anything individuals can do.

ROBERTS: You know, it's very hard for an individual to effect this enormous, vast economy if you're talking about a recession. Now, of course, consumers can always spend more. I tell my husband that.

GREENE: (Laughter).

ROBERTS: But - (laughter).

GREENE: (Laughter) Of course.

ROBERTS: But there are ways an administration can try to put the brakes on a downturn. You can lower interest rates. You can spend government money on things like infrastructure or tax breaks. And you saw both President George W. Bush and President Barack Obama do that, first in trying to ward off and then mitigate the Great Recession. The Treasury can print more money. The problem right now is there's not much wiggle room in any of those. Interest rates are already low. Government spending is so high that the deficit's going through the roof. So the tools at hand to stave off a recession are limited. And that's, of course, what has President Trump somewhat worried.

GREENE: Right. Because whatever happens in the economy is always an important backdrop to any presidential election. Cokie, thanks, as always.

ROBERTS: Good to talk to you, David.

GREENE: You, too. That's commentator Cokie Roberts. And you can ask Cokie your questions about how politics work and how government works. Just tweet us using the hashtag #AskCokie. Transcript provided by NPR, Copyright NPR.