How much power does the president have in the economy?

[On Sugar Hill]

Hey I don't really know much about the economy, but I do know that it's not looking great with layoff rates increasing, gas prices, and all the other problems we have in this country. Anyways, I know our president can veto bills that may have an effect on the economy but what else can he do for the economy? The main reason I'm asking is because firstly, John McCain admits to knowing nothing about the economy and when I hear people talk about this, someone always comes in and says that the president doesn't have that much say in the economy and that's why McCain, Hillary, and Obama are all pretty much the same and nobody can really "change" anything. Makes sense to me.

Ok but at the same time, I've been watching Ron Paul's debates and his views on the economy. He has a "brave" aura and seems like he's not scared to speak his beliefs but he was talking about getting rid of departments such as Homeland Security and the Department of Education. He even said he would be willing to get rid of the Federal Reserve. If the president doesn't have that much power in the economy, how does Ron Paul think he can get rid of the federal reserve? He'd need congress's approval for this and there's no way in hell they'd vote for it right?

[Smokey D]

By himself, the president doesn't have a great deal of effect on the economy. However, who is president sets the tone and general policy direction, which can have significant effects on the economy eg tax cuts vs state spending. The president, while limited in individual acts, has a cumulative effect on the economy which is very noticeable by the end of his administration.

[Jude]

He controls it that's why this recession and gas prices are Bush's fault that's why his approval ratings are low

[DBoons Ghost]

Smokey said it.

The economy is not controlled by any one entity. The President puts the best people around him who do know about economy but even then, the chairman of the Fed for example, "tries" to control and regulate economy, but has no power over how it goes. The stock market for example, is a couple hundred thousand people strong. So..

The mess we're in now with gas prices is the President's fault as it more or less is being caused by the Iraq war and the production of oil from Iraq. The "shortage" which is what is causing the gas price hike would have happened anyway, but not at the rapid pace we're witnessing it.

The subprime debacle was just bad timing, and had nothing to do with the President's choices. I believe top economists have done what they can to stop the bleeding there but it's not that simple.

Too much is going wrong at once. The money spent on the war in Iraq had no affect on the economy. The lack of oil production in Iraq did. Even that, is not the cause. Commodities traders panic very easy and drive up the price of oil due to the fact that the third largest manufacturer of oil is under siege. It didn't have to go that way. Demand for oil in this country has never been higher.


Ron Paul, while crazy as a fox, has no idea what purpose the Federal Reserve bank serves if he thinks he can get rid of it. All the departments you mentioned and the cutitng them out serves no purpose in the way of "saving" the economy and closing those shops would have no positive effect on what plagues us right now.

[guitrguy]

He controls it that's why this recession and gas prices are Bush's fault that's why his approval ratings are low

To cap gas prices that would have to be done in Congress, and to have fair lending practices that would also have to be done by congress.

[Dave de Sylvia]

The President used to have the unilateral power to negotiate foreign trade agreements, which gave him a lot of power, but that's kind of waned since Congress failed to renew it.

The mess we're in now with gas prices is the President's fault as it more or less is being caused by the Iraq war and the production of oil from Iraq. The "shortage" which is what is causing the gas price hike would have happened anyway, but not at the rapid pace we're witnessing it.
Are you sure about that? There are so many factors going on here I don't see how you can pin one down as the cause. Besides, OPEC production is decreasing across the board- Iraq may have been able to mitigate the decline, but I'm not sure it's particularly significant in the long-run.

[DBoons Ghost]

Are you sure about that? There are so many factors going on here I don't see how you can pin one down as the cause. Besides, OPEC production is decreasing across the board- Iraq may have been able to mitigate the decline, but I'm not sure it's particularly significant in the long-run.

I'm not completely sure. I thought I stated that "more or less". I can't be sure of anything anymore!

Maybe it didn't cause the whole of the issue. It did have a direct contribution to the fact that crude is over 100 bucks a barrel, when in reality it doesn't have to be. Panic on the floors of commodities exchanges everywhere! It's all cause and effect in a way.

I think we can argue that this would have happened anyway, war or no war, but panic from uncertainty in Iraq's oil production made it happen quicker.

[guitrguy]

I think we can argue that this would have happened anyway, war or no war, but panic from uncertainty in Iraq's oil production made it happen quicker.

that and OPEC's constant refusal to increase oil production.

[DBoons Ghost]

that and OPEC's constant refusal to increase oil production.

How long had OPEC been asked to increase production? I would assume this had been going on long before the war in Iraq..

[Dave de Sylvia]

The entire purpose of OPEC is to cartelise oil supplies. They'd be insane to increase oil supplies any more than they need to. Their supplies are dwindling and they need to plan for the future, and increasing the supply would just reduce their return on those supplies.

[guitrguy]

How long had OPEC been asked to increase production? I would assume this had been going on long before the war in Iraq..


They generally increase and decrease production. OPEC does gain some sort of upperhand over the US by decreasing oil production and inversely increasing oil prices. and what SOP said.

[DBoons Ghost]

Thanks guys. I'll look more into it when I can as I am curious.

I wonder if our automotive industry is taking a hit because of how much oil the US war machine needs to operate all those tanks and HUMVs in Iraq every day.

Because, this whole gas thing really sucks.

[guitrguy]

You're telling me. I do like how Obama wants to up the minimum MPG to 35 on all vehicles.

[Jude]

Pretty soon only the rich will be able to drive and America will finally have no choice but to go over to a European style of extensive public transit

Bit of a pain in the butt given the size but it has to be done sometime so why not now

[Against Miik!]

Public transit in most of the United States would be very difficult. I mean, you could fit like 12 European countries into just Texas. Everything is so damn spread out. It wouldn't be as simple as starting to use public transportation. It would require some immense lifestyle changes.

[Dave de Sylvia]

Well public transport is mainly a city-based thing in Europe as well as America. There are areas just as isolated as rural Texas in Europe and they deal with the same transport issues. America is more spread out in general, but it's not so spread out as to make public transport unworkable.

[mph4ever]

does anybody actually know what reserves are out there? what are the reliable sources of information. i had read somewhere that saudi arabia had only tapped 11 of its 39 known major oil fields, that australia has untapped reserves that would allow it to use oil at its present rate for the next 300 years, that there are vast unexplored methods of extracting oil from sand type pits, that american internal oil production has been seriously held back whilst they use the oil from opec. probably all myth

oh, on the question of the presidents role in the economy, never thought of it as much, foreign policy is where we notice them most these days

[Smokey D]

Australia, to my knowledge, has no proven extensive oil fields but it has enough coal to last a few centuries. Saudi estimates are not reliable since they have reported the same reserves each year since about 1970, which is pretty much impossible. Tar sands and stuff are slightly different because they require a lot higher extraction costs (I read somewhere it starts becoming viable around $130pb, so we might see a movement to begin extraction). There are probably quite a few fields in the deep ocean somewhere but they are unproven and probably very expensive.