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In this week’s Live Q&A…
Does it Matter Who the President Is?
In the United States, the Battle of Ideologies has devolved into two political parties- democrats and republicans. In a country built on the foundations of freedom of thought and expression, you now have a single choice between two opposing parties.
This was not always the case. For example, the election of Abraham Lincoln in 1860 saw four political parties receive significant vote percentages in the election results. Contrast this to 2020 when the highest third-party vote equaled 1.2% of the total count.
On the ballot, there are two choices with a realistic chance of winning, and they are marketed as opposing ideologies. But once either of the two candidates reaches the White House, are they still different?
When it comes to the real economy, it does not seem to matter whether a republican or a democrat occupies the oval office. Business cycles will play out no matter which political party is in office.
No matter what stage in a business cycle, politicians will not be the ones creating jobs. Entrepreneurs are the job creators, and the government does not produce the goods and services we consume. Private citizens create these goods and services.
But once the work is done and the taxes are collected, politicians on both sides of the aisle will spend taxpayer dollars like it is their own hard-earned cash.
If you look at government spending over the past few decades, it has always gone up. It did not matter which party was in office, the trend did not break.
While government spending can be attributed to the elected politicians, we cannot place all the blame for this singular outcome on those who have been voted upon.
Much of the blame for the continuity between these two political parties is attributed to unelected bureaucrats that make up the administrative state and supposedly independent institutions like the Federal Reserve.
The Fed has participated in Quantitative Easing since 2008, spanning multiple presidents from different political parties. Each time, interest rates have been artificially suppressed causing inefficient or malicious investments into the economy that otherwise would not have been possible without Fed intervention.
From just a couple of examples, we can see that whoever occupies the White House, may not have as big of an impact on the real economy as is perceived. But as they say, perception is everything.
In this case, a singular choice between two perceived opposing views is just enough to keep an entire country occupied for what now seems like every second, of every minute, of every single day.