A popular narrative in American politics holds that Democrats are better stewards of the economy—citing better stock market returns, higher GDP performance, and stronger job growth under Democratic presidents. I’m sure you’ve seen this argument many times on social media. Back in the early 1990s I made similar arguments. But when I studied political economy in graduate school, I begin to develop a different understanding of the way economic trends work, and the relationship of economic cycles to fiscal and monetary policy.
The surface-level analysis one sees in social media and partisan commentators ignores a key reality of economic policymaking: the effects of major policy decisions often take years to materialize. When viewed through the lens of delayed impacts, a different story emerges, one in which Republican administrations lay the groundwork for prosperity that their Democratic successors inherit and enjoy—while also taking the fall for downturns set in motion by prior Democratic excesses.
Economic policies—monetary restraint, regulation, and taxes—do not yield immediate results. Deregulation and tax cuts may take several years to stimulate business investment, productivity gains, and wage growth. Republican presidents—from Reagan to Trump—implemented long-term growth strategies, even at the cost of short-term political popularity, that produced economic strength and stability. When those reforms begin to pay off, it was largely under the Democratic administrations that followed, allowing them to benefit from a rising tide they did not initiate—and would squander.
Take the Reagan revolution of the 1980s. His policies of deregulation, strong dollar, and supply-side tax cuts initially met fierce resistance and even recession. But by the 1990s, the United States was entering a historic boom. President Clinton inherited an already expanding economy and benefited greatly from the growth sparked by Reaganomics and continued by a Republican-controlled Congress that pushed welfare reform and balanced budgets. It wasn’t Clinton’s and George Bush Senior’s tax hikes that led to budget surpluses, but Reagan’s supply-side tax cuts—what Bush Senior called “voodoo economics.”
A similar pattern unfolded in the 2010s. President Trump’s 2017 pro-energy policies, regulatory rollbacks, tariff policies, and tax cuts contributed to a pre-COVID economic boom marked by rising wages, especially among lower-income workers and minorities. The rebound from the COVID-19 lockdowns—often attributed to Biden—was fueled by these earlier structural changes made under Trump.
To be sure, Democrats pursue short-term stimulus and expansive welfare policies that temporarily boost demand, but these sow the seeds of long-term instability. The inflation crisis under President Biden—driven by a flood of post-COVID spending, energy policy shifts, and supply restrictions that discouraged production—is a case in point. Should inflation fall and growth stabilize under Trump, future Democrat regimes will take credit for a recovery built on Republican course corrections. But their narrative will depend on popular ignorance—reinforced by the media narrative.
Ultimately, the idea that Democrats are consistently “better for the economy” rests on a snapshot understanding of time and causation. The ship of state moves slowly—and more often than not, it is Republicans who set its course toward long-term prosperity, even if they are out of office by the time the results are felt. Why this understanding isn’t intuitive is because of widespread economic illiteracy.
freedom and reason 