All parties’ U.S. leaders have lobbied and invested frequently when the economy is doing well. Political operatives told citizens that when the United States experiences economic growth, it is the direct result of the White House chief executive’s brilliant strategies and policies. Similarly, presidents were mistaken when the economy tanks and some were then voted out.
This White House idea of totally controlling the economy, however, is simply not accurate. That’s because many more complex powers drive the economy in the White House beyond some magician spinning a magic wand to help America. Our complex economy is not made or broken by presidents. Certainly, the White House plays a role as does Congress (which has more power than the president) and the Federal Reserve, but the involvement of government is still not the only factor in the US economy.
Global supply and demand, plans and regulations in the private sector, and unemployment and business/trade cycles have an impact on the economy. The economy is also influenced by foreign operations outside the US, and the achievements or losses of multinationals dependent on overseas markets can also drive the economy one way or the other. Also, when it destroys agricultural production or creates major disasters, the climate can be a factor for the economy. And then there’s a timing–sometimes a long-term policy or action is what pushes the economy up or down in the present rather than who’s sitting in the White House at the moment.
Beyond the president, complex combinations with internal and external factors/circumstances have typically arisen far beyond the control of the White House when the economy grows or decreases. Like rainwater from many sides pouring down on a roof, the economy responds to this storm and creates its complicated pathways that can lead to cycles of ups and downs. Regrettably, no matter which party celebrates when the U.S. economy is doing well, what’s missed is the issue of “to whom.” Income inequality has been and appears to be a major problem facing the U.S. but remains largely neglected by policymakers.
There are now very difficult financial circumstances for millions of families across the United States. A report from the Federal Reserve notes that this weight of rising inequalities crushes the poorest Americans.
And as per the U.S. Census Bureau, the difference between the richest and poorest U.S. families in the last 50 years, is now the highest it has been.
The most concerning thing about this new information, says William M. Rodgers III, a professor of public policy and chief economist at Rutgers University’s Heldrich Center, is that it “clearly illustrates the inability of the current economic expansion, the longest recorded, to reduce inequality.” And among those stockholders, the wealthiest Americans possess a vast amount of that interest. Nonetheless, according to an analysis by NYU economist Edward Wolff, the top 1 per cent of U.S. income families now own approximately 38 per cent of all stock shares. The wealthiest Americans have made the most significant wealth gains in recent years.