Logo
    Search

    11. How Much Does the President of the U.S. Really Matter?

    en-usNovember 03, 2010

    Podcast Summary

    • The Role of the US President: Symbol of Power or Puppet Master?The President's impact is often overstated; decisions are based on statistics, probabilities and collective behavior, rather than individual power.

      The question of how much the President of the United States really matters is a topic of serious discussion among economists, gamblers and stock markets alike. Betting on election outcomes while paying attention to prediction markets such as Intrade.com is a popular pastime. The outcomes of presidential elections can have an impact on various industries and sectors such as the stock market. However, the authority and power of the Presidency is often overstated. The President is more like a symbol of power rather than a puppet master pulling every string. The job of the President bears some resemblance to baseball, where decisions are largely made based on statistics and probabilities rather than the individual prowess of the players. Ultimately, while the President is a symbol of power, it is the collective behavior of people and institutions that truly shapes the political landscape.

    • The Financial Market and the Importance of the U.S. PresidencyAnalyzing political prediction markets and historic data can provide insight into the impact of presidential candidates on financial markets, but determining the exact extent of a president's influence on the economy is challenging.

      The information that moves the prices in the financial market reflects the wisdom of the crowds and includes various sources, such as formal models and water cooler conversations. By analyzing historic data on how presidential candidates did in political prediction markets and how it affected the financial markets, we can get a sense of the importance of electing one candidate over the other. However, determining the extent to which the president of the United States really matters is a challenging question due to factors like reverse causation and the difficulty in separating the effects of fiscal policy from other variables that affect the economy. In studying the effects of the presidency on the economy, social scientists cannot run a big randomized trial.

    • The Limited Impact of Presidents on the EconomyThe actions of presidents may not significantly affect the stock market or overall economy. Constraints and limitations, such as the separation of powers and working with the legislative branch, also impact the ability to push for economic policies, and party affiliation does not always predict economic policy.

      The impact of a president on the economy may be limited, as their actions may not have a significant effect on stocks or the overall economy. For example, during the 4 hours that John Kerry was thought to be winning the 2004 election, stocks fell slightly, indicating a preference for George Bush. However, the difference between the two potential presidencies was only around 1-2% in terms of stock value, a relatively minor difference. Additionally, even if a president wanted to push for more fiscal stimulus or other economic policies, they would face significant constraints and limitations due to the separation of powers and the need to work with the legislative branch. Party affiliation may also not be a reliable predictor of economic policy, as there is often significant intraparty variation in the U.S. political system.

    • Measuring Power in Baseball vs PoliticsMeasuring the power of a president is difficult due to many uncontrollable factors, while a baseball manager's job is to lead and manage the team, even though their impact may not be easily measurable.

      Measuring the power of a president or any authority figure is difficult due to the vast playing field they operate in. Justin Wolfers, an esteemed economist, believes that it's impossible to isolate a president's power from the forces that shape history, society, and the economy. However, in a field like baseball, where a manager is the team's boss but doesn't throw a single pitch, measuring power becomes easier. Joe Madden, the manager of the Tampa Bay Rays, which won the American League East Title with 96 victories, explains that a manager's job is to lead and manage the team. While their impact may not be quantifiable, it's still essential.

    • The Role and Impact of Baseball Managers Beyond Game Strategy.Being a baseball manager involves managing players, front office, and press, and is not solely based on game strategy. While some managers may be better than others, their impact on a team's success is not significant.

      Being a baseball manager involves more than just strategizing during game time; it also includes dealing with the personalities of players, front office, and press. The impact of a manager on a team's win/loss record can depend on the level of veteranship among the players. While managers can seek advice from statistics, the decisions they make during the game are not the sole determining factor for success. Comparing the role of a baseball manager to that of the president of the United States, the former has a more limited scope of responsibility. Ultimately, research shows that while some managers may be slightly better than others, there is not a significant difference in the impact they have on a team's success.

    • The Role of Managers in Baseball and the GovernmentWhile managers may not have a direct impact on player performance or the economy, they provide unity and direction and serve as a focal point for their respective teams or countries, receiving both blame and credit for their performance.

      Managers in baseball do not seem to have a meaningful impact on player performance, as players tend to perform similarly under different managers. However, having a manager is still necessary as they provide a sense of unity and direction for the team. This is similar to the role of the President in the government - while they may not have a direct impact on the economy, they serve to provide a focal point for the country and be held accountable. Additionally, the blame and credit that managers receive for team performance parallels the blame and credit that the President receives for the state of the country.

    • The Gap Between Perception and Reality of Presidential PowerDespite the public's belief in a president's great power, their role is primarily as a figurehead, with managers holding greater influence. People turn to politics as a form of emotional release, creating an inflated image of presidential impact.

      The perception of the president's power and influence over our daily lives is often exaggerated, with the reality being that the president serves more as a cheerleader and agenda-setter than a decision maker. The manager in charge is the one who can actually make things happen without needing approval from Congress. Despite this, people ascribe so much power to the president because they need to vent their frustrations, and voting and paying attention to politics give them that outlet. It's a cheaper and safer alternative to relying on therapists or other means of expressing emotions. Ultimately, measuring the president's impact is difficult, but it's essential to understand the gap between perception and reality.

    • Understanding Leadership and GovernanceLeadership is the ability to inspire others to exceed expectations, while governance is the process of setting boundaries and following established laws. Greatness is created through effective leadership skills, not just management abilities. The role of the President of the United States is limited in some areas but influential in others.

      Leadership is a complex concept that can be measured in different ways, but most people agree that it involves the ability to persuade others to follow one's lead. Historical figures like Lyndon Johnson, George Washington, and Abraham Lincoln are remembered for their leadership qualities rather than their governance skills. While setting thresholds and following the law are important aspects of governance, inspiring people to go above and beyond what is required is what creates greatness. While the President of the United States is often referred to as the most powerful person on earth, their power is actually constrained in many ways. However, the President does have significant power in areas such as serving as Commander and Chief of the Army and Navy.

    • The Limitations of Presidential Power in the United StatesThe President has significant powers, but they are limited by Congress and other government structures. The spending clause, which determines how revenue is allocated, is a crucial power that belongs to Congress. The President's role is ultimately limited by the structures of government.

      The President of the United States has significant powers, including stopping wars, appointing judges, choosing not to enforce laws, persuading Congress, and negotiating with foreign countries. However, these powers are often limited by Congress and other structures of government. The spending clause, which determines how revenue is allocated, is a crucial power that belongs to Congress. While candidates may promise to change everything, the reality is that the president is limited in their ability to do so. The role of the President is like the Wizard of Oz: an image with some power, but ultimately limited by the structures of government.

    • The Limited Power of the U.S. President in the EconomyThe U.S. President, though seen as a symbol of power, has limited influence over the economy. The democratic system functions like a market, with multiple inputs and outputs and no single individual having complete control.

      While the U.S President is the figure head for the country abroad, economists believe they have much less power than most people think, especially when it comes to the economy. Constitutional scholars suggest that each President comes into office with a sense of power and control, but quickly learns the reality. The American democracy works much like a market, with lots of inputs and outputs and where certain individuals may have more power than others, but the President is just one individual. Therefore, the absence of a President would not necessarily change the day to day experience in the U.S. unless the circumstances surrounding their absence dictate certain responses or shift public opinion.

    Recent Episodes from Freakonomics Radio

    597. Why Do Your Eyeglasses Cost $1,000?

    597. Why Do Your Eyeglasses Cost $1,000?

    A single company, EssilorLuxottica, owns so much of the eyewear industry that it’s hard to escape their gravitational pull — or their “obscene” markups. Should regulators do something? Can Warby Parker steal market share? And how did Ray-Bans become a luxury brand? (Part one of a two-part series.)

     

    • SOURCES:
      • Neil Blumenthal, co-founder and co-CEO of Warby Parker.
      • Dave Gilboa, co-founder and co-CEO of Warby Parker.
      • Jessica Glasscock, fashion historian and lecturer at the Parsons School of Design.
      • Neil Handley, curator of the British Optical Association Museum at the College of Optometrists.
      • Ryan McDevitt, professor of economics at Duke University.
      • Cédric Rossi, equity research analyst at Bryan Garnier.
      • Tim Wu, professor of law, science and technology at Columbia Law School.

     

     

    Freakonomics Radio
    en-usJuly 18, 2024

    EXTRA: People Aren’t Dumb. The World Is Hard. (Update)

    EXTRA: People Aren’t Dumb. The World Is Hard. (Update)

    You wouldn’t think you could win a Nobel Prize for showing that humans tend to make irrational decisions. But that’s what Richard Thaler has done. In an interview from 2018, the founder of behavioral economics describes his unlikely route to success; his reputation for being lazy; and his efforts to fix the world — one nudge at a time.

     

    • SOURCES:
      • Richard Thaler, professor of behavioral science and economics at the University of Chicago.

     

     

    Freakonomics Radio
    en-usJuly 15, 2024

    596. Farewell to a Generational Talent

    596. Farewell to a Generational Talent

    Daniel Kahneman left his mark on academia (and the real world) in countless ways. A group of his friends and colleagues recently gathered in Chicago to reflect on this legacy — and we were there, with microphones.

     

    • SOURCES:
      • Maya Bar-Hillel, professor emeritus of psychology at the Hebrew University of Jerusalem.
      • Shane Frederick, professor of marketing at the Yale School of Management.
      • Thomas Gilovich, professor of psychology at Cornell University.
      • Matt Killingsworth, senior fellow at the Wharton School of the University of Pennsylvania.
      • Barbara Mellers, professor of psychology at the University of Pennsylvania.
      • Eldar Shafir, director of the Kahneman-Treisman Center for Behavioral Science & Public Policy at Princeton University.
      • Richard Thaler, professor of behavioral science and economics at the University of Chicago.

     

     

    Freakonomics Radio
    en-usJuly 11, 2024

    595. Why Don't We Have Better Candidates for President?

    595. Why Don't We Have Better Candidates for President?

    American politics is trapped in a duopoly, with two all-powerful parties colluding to stifle competition. We revisit a 2018 episode to explain how the political industry works, and talk to a reformer (and former presidential candidate) who is pushing for change.

     

    • SOURCES:

     

     

    Freakonomics Radio
    en-usJuly 04, 2024

    594. Your Brand’s Spokesperson Just Got Arrested — Now What?

    594. Your Brand’s Spokesperson Just Got Arrested — Now What?

    It’s hard to know whether the benefits of hiring a celebrity are worth the risk. We dig into one gruesome story of an endorsement gone wrong, and find a surprising result.

     

    • SOURCES:
      • John Cawley, professor of economics at Cornell University.
      • Elizabeth (Zab) Johnson, executive director and senior fellow with the Wharton Neuroscience Initiative at the University of Pennsylvania.
      • Alvin Roth, professor of economics at Stanford University.

     

     

    Freakonomics Radio
    en-usJune 27, 2024

    593. You Can Make a Killing, but Not a Living

    593. You Can Make a Killing, but Not a Living

    Broadway operates on a winner-take-most business model. A runaway hit like Stereophonic — which just won five Tony Awards — will create a few big winners. But even the stars of the show will have to go elsewhere to make real money. (Part two of a two-part series.)

     

     

     

    Freakonomics Radio
    en-usJune 20, 2024

    EXTRA: The Fascinatingly Mundane Secrets of the World’s Most Exclusive Nightclub

    EXTRA: The Fascinatingly Mundane Secrets of the World’s Most Exclusive Nightclub

    The Berlin dance mecca Berghain is known for its eight-hour line and inscrutable door policy. PJ Vogt, host of the podcast Search Engine, joins us to crack the code. It has to do with Cold War rivalries, German tax law, and one very talented bouncer.

     

    • SOURCES:
      • Lutz Leichsenring, executive board member of Clubcommission Berlin and co-founder of VibeLab.
      • PJ Vogt, reporter, writer, and host of the podcast Search Engine.

     

     

    Freakonomics Radio
    en-usJune 17, 2024

    592. How to Make the Coolest Show on Broadway

    592. How to Make the Coolest Show on Broadway

    Hit by Covid, runaway costs, and a zillion streams of competition, serious theater is in serious trouble. A new hit play called Stereophonic — the most Tony-nominated play in history — has something to say about that. We speak with the people who make it happen every night. (Part one of a two-part series.)

     

     

    Freakonomics Radio
    en-usJune 13, 2024

    591. Signs of Progress, One Year at a Time

    591. Signs of Progress, One Year at a Time

    Every December, a British man named Tom Whitwell publishes a list of 52 things he’s learned that year. These fascinating facts reveal the spectrum of human behavior, from fraud and hypocrisy to Whitwell’s steadfast belief in progress. Should we also believe?

     

     

    Freakonomics Radio
    en-usJune 06, 2024

    EXTRA: The Opioid Tragedy — How We Got Here

    EXTRA: The Opioid Tragedy — How We Got Here

    An update of our 2020 series, in which we spoke with physicians, researchers, and addicts about the root causes of the crisis — and the tension between abstinence and harm reduction.

     

    • SOURCES:
      • Gail D’Onofrio, professor and chair of emergency medicine at the Yale School of Medicine and chief of emergency services at Yale-New Haven Health.
      • Keith Humphreys, professor of psychiatry and behavioral sciences at Stanford University.
      • Stephen Loyd, chief medical officer of Cedar Recovery and chair of the Tennessee Opioid Abatement Council.
      • Nicole O’Donnell, certified recovery specialist at the University of Pennsylvania's Center for Addiction Medicine and Policy.
      • Jeanmarie Perrone, professor of emergency medicine at the University of Pennsylvania.
      • Eileen Richardson, restaurant manager.

     

     

    Freakonomics Radio
    en-usJune 03, 2024

    Related Episodes

    Spotlight: The UAW Won But America's Taxpayers Will Lose — Here's Why

    Spotlight: The UAW Won But America's Taxpayers Will Lose — Here's Why

    Steve Forbes responds to the United Auto Workers union victory over major auto manufacturers, pointing out that the strike's settlements will come at the expense of profits—and that means bad news for consumers.

    Steve Forbes shares his What’s Ahead Spotlights each Tuesday, Thursday and Friday.

    See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

    Spotlight: Is Ukraine-Russia War Escalating? How The U.S. Can Help

    Spotlight: Is Ukraine-Russia War Escalating? How The U.S. Can Help

    Putin's quest for control of Moscow, both politically and economically, continues to strain Ukraine. Recently Russia massed troops on the border of Ukraine, as if for a full-scale invasion. Is the Ukraine-Russia war escalating? Steve Forbes on how the U.S. can help Ukraine get out of Putin's clutches and on why we should take action and then follow through.

    Steve Forbes shares his What’s Ahead Spotlights each Tuesday, Thursday and Friday.

    See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

    Spotlight: How Biden’s Regulatory Blunders Are Crushing American Ingenuity

    Spotlight: How Biden’s Regulatory Blunders Are Crushing American Ingenuity

    Administration regulators have tightened water-use rules, pushed for energy-efficiency standards and its war on fossil fuels continues. All these unnecessary rules from Washington are making life less pleasant, more irritating and more expensive! Steve Forbes on how Biden's regulatory blunders are crushing American ingenuity and on why government interference is only making things worse.

    Steve Forbes shares his What’s Ahead Spotlights each Tuesday, Thursday and Friday.

    See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

    Spotlight: Will Larry Elder Replace Governor Newsom In California’s Recall Election?

    Spotlight: Will Larry Elder Replace Governor Newsom In California’s Recall Election?

    Until recently, it looked like Governor Gavin Newsom of California would beat back the recall. But his constant incompetencies are catching up to him. Steve Forbes on the election recall Newsom is facing and on how recent polls show Larry Elder leading others and how he could be in line to replace Newsom after September 14th.

    Steve Forbes shares his What’s Ahead Spotlights each Tuesday, Thursday and Friday.

    See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

    Spotlight: Latest Biden Regulation Will Cause Massive Trouble For New Homebuyers

    Spotlight: Latest Biden Regulation Will Cause Massive Trouble For New Homebuyers

    Steve Forbes decries a new "utterly perverse" Biden Administration housing rule which punishes homebuyers with good credit by forcing them to subsidize buyers with poor credit.

    Steve Forbes shares his What’s Ahead Spotlights each Tuesday, Thursday and Friday.

    See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.