Can presidents influence the economy?

A successful head coach was once asked, "What makes a great coach?" His answer was, "Great players." Many coaches honor that philosophy, whether spoken or not, as they battle each other to attract the best talent in their respective sports. But can a coach really make a difference? Intuitively and experientially we can respond, "Yes." It was once said of the legendary Alabama head football coach Bear Bryant, "He can take his'n and beat your'n or take your'n and beat his'n." Something about Bear just made the 11 men on the field play better.

So how does this translate to a president? Being president is not as simple as coaching football-it's as different as tic-tac-toe is to three-dimensional chess. But what difference can the commander in chief make on something as large, complex, and internationally integrated as the U.S. economy?

Rhetorically, for the past four years, we have heard the Democrats and the media consistently hammer home the idea that whatever is wrong with our economy lies at the feet of George W. Bush. "It was his policies and them alone that got us here," they would proclaim. But their position has recently changed, and they're now saying, "The president [meaning Barack Obama] really has very little ability to influence such a complex organism."

Yet our intuition and experience tell us something different. For example, Ronald Reagan took over a country in "malaise." Patriotism was almost dead, gas lines caused by price controls had been rampant, the Ayatollah Khomeini had taken Americans hostage, and the United States seemed trapped in a cauldron of high interest rates, depression, and stagflation. But Reagan set a few priorities and stuck to them: lower tax rates, reduced regulation, less government spending (a goal never achieved), and the restoration of a strong national defense. The message was clear, the actions fit the narrative, and Reagan never wavered far from those initial objectives.

The result? The United States began the longest running upturn of the 20th century, the Treasury enjoyed the largest revenue increase of the century, businesses sensed a stable environment in which to invest, Americans at all levels flourished, and the country felt secure even in the middle of the Cold War.

Contrast that with Obama's term so far. His first two years were focused on Obamacare, creating massive uncertainty. Would it pass? What was in it? What would it mean for small businesses? More than two years after it became law, businesses are still trying to figure out those answers. One investment banker told me, "We don't care what the rules are, just tell us what they are, stick to them, and we will figure out how to make money."

Therefore, a president can positively or negatively influence the culture in which business decisions are made by creating a predictable climate for making investments in people, machinery, and technology.

Granted, a president cannot control climate, other countries' politics, wars between other nations, acts of God, or other international turmoil. Obama did not cause nor ask for the European monetary crisis any more than Bush asked for the 9/11 attacks, but how they responded to those uncontrollable events had an effect on the economy and the nation. The 9/11 attacks stupefied the nation for a time. Business halted, planes did not fly. Were we headed for a world war, was another attack just around the corner, was it safe to travel? We forget so quickly how Bush pulled the country out of a death spiral and we recovered.

Tax policy, predictable regulation, favorable trade agreements, reasonable environmental enforcement, the "bully pulpit," and controlled sensible spending are all tools available to a president. He cannot guarantee results, but a president can move the solution in a desired direction if he wisely wields his tools.

So when you hear someone say that presidents cannot really influence the economy, please dismiss those comments as foolish rhetoric. Presidents can, have, and will.