How Much Does the President Really Matter?

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Jan. 20, 2009

Pete Souza, President-elect Obama, backstage at the U.S. Capitol on Jan. 20, 2009, just before taking the oath of office.

How Much Does the President of the U.S. Really Matter?: The U.S. president is often called the “leader of the free world.” But if you ask an economist or a Constitutional scholar how much the occupant of the Oval Office matters, they won’t say much.

After a throw-out-the-Dems mid-term election on Tuesday, with Republican promises to unwind Democratic legislation like healthcare reform and an economy that refuses to break into anything more than a cautious jog, we use the Freakonomics Radio podcast to pose a tough question: How much does the President of the United States really matter?

We asked this question on the blog a while back and figured, with the political landscape so fractious and the stakes so high (or are they?), that it was a good time to update and expand, with a broad cast of characters doing the talking. (You can download/subscribe at iTunes, get the RSS feed, read the transcript, or listen live via the link in box at right.) You’ll hear from some economists, a Constitutional scholar, a politician, and even a baseball manager.

Justin Wolfers

We open with Wharton economist (and Freakonomics blog contributor) Justin Wolfers, who talks about his love for gambling on political outcomes and does his best to outline the President’s influence. This is gleaned from, inter alia, Wolfers’s research on prediction markets. He describes the 2004 Presidential election (Bush/Kerry) as a “social scientist’s dream,” with a helpful shock to the system:

“If you remember the 2004 race – around about three o’clock election day the polls got leaked. … what you have is four hours in which we basically had a Kerry presidency… So what we can is we can look at how the financial markets perform during those four hours of the Kerry presidency and compare that to, either the four hours prior when it was clearly a Bush presidency, or the four hours after when it was clear that it was a George W. Bush presidency. So, when we do that we see in fact that stocks fell a little bit during the four hours of the Kerry presidency and that they rose a little bit when it became the Bush presidency. So that tells us that the stock market preferred George Bush over John Kerry.”

Although it doesn’t appear in the podcast, an interview with Caltech economist and political scientist Erik Snowberg yielded this insight:

“It seems that the public thinks that the president matters a lot more than our academic research would suggest. There is, actually, some academic research that shows that in counties that are very heavily Democrat, if a Republican wins the presidential election, in the fourth quarter of that year, consumption declines quite a bit. It can decline somewhere between 4 to 8 percent. So that seems to indicate that people think that it matters quite a bit more than it does. The argument in the political-science literature is that it’s like rooting for a team: when your team does really badly, you get upset. People end up spending a lot less money and that doesn’t seem to be borne out by the effects we note in the broader economy.”

Because the President’s job is so vast, and therefore hard to measure in terms of hard influence, we sought to measure the influence of some other types of top-of-the-pyramid leaders. Baseball managers, for one. We spoke to Joe Maddon of the Tampa Bay Rays – he was a great interview; smart, informative, upbeat – as well as “baseball economist” J.C. Bradbury. He argues that managers have little ultimate effect on a team’s performance. But, as with the Presidency, the role is still vital because “you need the final arbiter to say ‘This is the decision we’ve made and we’re going with it.'” That said, Bradbury argues that there’s a significant gap between the public’s perception of the President’s influence and his actual influence:

“I think people think that the President is a benevolent despot determining our fortunes when in reality I think the President is just sitting in the co-pilot seat of a plane that’s already on auto-pilot.”

We also looked into the true influence of corporate CEO’s and, while this segment didn’t make it into the podcast, Harvard Business School professor Rakesh Khurana talked us through the parallels between a CEO and President:

When we ask people, “What’s the most important things that affect firm performance?,” often the CEO is ranked, you know, 6 or 7 or 8 [on a scale of 10] … but if you go back to the research, it’s not that the CEO doesn’t matter, but that they matter in much more subtle and nuanced ways than we typically attribute. So my guess is that CEO’s matter closer to 2’s or 3’s rather than 7’s or 8’s.

About 15 years ago, when people asked why the American economy was doing so well, the simple response was, “Alan Greenspan – the maestro,”?as if you could reduce very complex causes to single individuals.? I think that what we need to do, is really step back as a society and say, “What is it that we expect from our leaders?? What is it that we expect from our institutions?” Because if we don’t do that, I think what we’re likely to do is to continue in this cycle of very high expectations followed by disappointments. Meanwhile what doesn’t get done goes back to the structuring and the health of the institutions that create the conditions for good performance, either in a firm or in our society.

John AshcroftDoug Mills/The New York Times John Ashcroft

We interviewed former U.S. Attorney General John Ashcroft, who shared his view that the President’s major power has historically not been the power of governance:

“When we think of our earliest presidents and the great heroes that we have as presidents, most of them are remembered not so much for their governances as they are for their leadership. If you think about George Washington, few people can mention any of the laws that were passed under his time as President, but they know what he stood for, and the kind of moral tone that he brought to America.”

And the episode concludes with Bernadette Meyler, a constitutional law professor at Cornell University, to whom I could have listened all day. She ably broke down the areas in which the President does and doesn’t exercise real power, pointed out some interesting historical trends, and identified – as did Ashcroft, Bradbury, and others – the disconnect between the President’s job and our view of the President’s job:

Bernadette Meyler Bernadette Meyler

“Well, I really believe that the President isn’t as significant as we imagine him or her to be. We think of the President as having great power to fix the economy for example, or fix international conflicts, and to some extent the President has persuasive authority to do things like that. But the President really can’t just turn around and fix the economy within two years for example.”

This episode was great fun to put together, and I hope you enjoy it. Along the way, you’ll hear some long-forgotten musical performances by Presidents, including Harry Truman, Lyndon Johnson and Bill Clinton. You already know, surely, about Johnson’s legendary powers of persuasion. But did you know they extended to getting his dog to sing?

President Lyndon B. Johnson sings with his dog Yuki as Ambassador David Bruce looks onLBJ Library photo by Yoichi Okamoto President Johnson leading his dog Yuki in song


So Presidents don't matter much. Makes sense in our complex, mixed, multi-polar economy. But do you suppose the world would have been pretty much the same if Gore had beaten Bush? I'm guessing that some big pieces of the path would have been considerably different.

Fellow Australian economist

"So that tells us that the stock market preferred George Bush over John Kerry."
Justin Wolfers

This grandiose, imprecise and unqualified statement is typical of the flawed thinking of mainstream economists. Play with the numbers all you want, show off your mathematical expertise, but please don't draw broad, unqualified, imprecise social conclusions like this. There are real political consequences when you assert your authority as an economist in a public debate and attribute causation in this way. Social systems are so complex, with so many variables and so much irrationality, that conclusions derived from mathematical analysis should only ever be taken as an intellectual curiosity, not an authoritative finding of causality.


If any politicians really mattered, we'd already be Canada's southern province.

David in Toledo

Enormously. With President Obama, I feel proud of the leadership of our federal government.

With President Bush 43, well, see Gary Trudeau today.

With President Reagan (Bush 43 as an old man), we started a national indifference to the fate of the less fortunate of our own citizens and the dangerous neoconservative foreign policy that has brought terrorism down upon us.


While an interesting post, the article avoids discussing the ultimate power that the President does have, the ability to wage war or withdrawal military forces. Now, that's a power that's been quite significant in the Presidencies of Kennedy, Johnson, Nixon, Reagan, Clinton, Bush I & II, and now Obama. Now one else ultimately has that power. Presidents avoid Congress on this issue by simply not "declaring" war.

dee clary

Since the top1% of Americans controls 25% of the country's wealth now I think we all know who really governs this country. Lobbyists even write the laws that get handed over to congressional aides and then to Congressmen who pass these lobbyist- written items and collect campaign donations in return. Money is all that really matters.


The president's symbolic influence and power is probably greater than his or her technical power. If the president uses his or her influence well, that adds to the power of the presidency. In my lifetime, the president who best did that was Bill Clinton until he betrayed himself and the country with bad personal behavior. Obama is a good man, but his habit of denying any and all error is undermining the effectiveness of his presidency. In the last 40 years, we've had about 10 years total of positive presidential influence, about 10 years of scandals and intrigues, and about 20 years of electoral fighting and confusion.


Umm, G.W. Bush anyone? The country is hardly in autopilot when you declare war and invade other countries.


No amount of eloquent speeches courtesy of the spin doctors and elite Dem $$ that got him elected, can disguise that Health care, TARP, and Unemployment are the main issues causing taxpayers to balk at Mr. Obama's policies.

The fact of the matter is while Obama may have inherited the economic crisis from a growing deficit of an endless War, his attention in the crucial first year in office was on Obamacare - instead of averting the economic debacle that will end up being the measure of his effectiveness as a President.

Obama will need to replace his advisers of the past to address growing issues like rising Unemployment, Globalization, and taxing the wealthy, now that he is forced to work with the GOP, before eloquence can win back the people that supported his Presidency in the first place.

St. Kitt

"Merciful powers!
Restrain in me the cursed thoughts that nature
Gives way to in repose."

~ W. Shakespeare (from Macbeth)


I love this blog and have loved the podcasts, but really disliked this one. It was just sloppy.

As other commenters have noted, in the podcast, the argument that the President is not powerful is solely predicated on the notion that he can't control the economy. This is true. But he does wield real power in other ways, in particular via the means delineated by Bernadette Meyler, and that represents real power that profoundly affects people. The decision to go to war with Iraq was driven by the President, and that has had a real impact on millions of people.

In fact, the actual power that Meyler says the President has is still a lot of power. She argues that President is not the most powerful person in the world, but really, her argument is only that he is not as powerful as people think he is, which is true. But that wasn't the question. In fact, I'd love to ask her (and Dubner) - if the President isn't the most powerful person in the world, who is?

I'm not sure you could come up with anyone else. Because even though the President isn't as powerful as people think, when you look at the power he actually has, he's still the most powerful person in the world.



The degree to which a President matters is directly proportional to his popular support. A President with broad popular support wields virtually unlimited power and therefore matters tremendously (see FDR or many early term Presidents). A President who's lost support from the majority of his constituents is nearly irrelevant (see any recent late term President, including George W. Bush, and now Mr. Obama).

The fact that popular support |-- (political power & influence & relevancy) applies at all levels of politics, not just the Presidency.


"consumption declines quite a bit ... somewhere between 4 to 8 percent. So that seems to indicate that people think that it matters quite a bit more than it does."

I'm not an academic or an economist but it seems to me that if real people reduce actual consumption because of an election then it does matter "quite a bit more" than academic theory.


Read the United States Constitution! He's an ADMINISTRATOR, that's ALL. There are more words in the Constitution saying how to select and impeach him than there are saying what his duties are.

It's CONGRESS that runs the country. The President just does what Congress tells him to do!


peter michael

One of the most important things a President does is choose Supreme Court Justices. I would bet almost anything that Al Gore would have chosen someone better than John Roberts or Samuel Alito. Presidents do matter. Thanks Nader voters!

The President - only the facade.


Americans must try to understand what their problems really are i has to be understood.
America has over 6 million people in prison, with an estimate of double that in the next 5 years. Most police forces are financialy and morally broke
and they are out of new ideas of how to protect their the public. children in most schools are being exposed to more crime inside their cities and towns schools than most children in war torn 3rd world countries, that means more guns in schools than on the battle fields of Afghanistan, America has cheated the children by hiring teachers with the poorest of salaries of any free country in the world most of the teachers in the Louisianan area over 80 percent were proven to be unqualified to teach at any level. Across America they have such a unbalance of good schools and safe environment so a child can get a good education, only because a man working in a gas station changing oil and tires is making more money per week
. I know what your thinking that this statement is somewhat elitist but your mistaken, with ought proper education your children cannot compete with other countries for the better paying jobs of the future . Just look at India - Pakistan alone on this very day they have 1.89 educated in engineering to a level most American students will never reach and your still bored,? so let me turn up the heat a little.
America is spending 1 billion dollars a day on the war in Afghanistan. twice that on their national dept. aero space is eating up 10 times that amount the only business that is making money in your country is Walmart makes three times that in profit and most of the money goes back to China. Americans buy foreign named cars and say "well its made here in America so it must good to go"
, Not true,
78% of the cash that were spending on these car is going back to support their countries infrastructural systems. getting back to Walmart they are the main cause of the loss of all jobs in cities towns & states in America where they open a store all small business close every where in that state, and the people just keep on going back to buy more Chinese products.
Sorry if i bothered you with my story but after reading this do you still think who is president would make a difference,?
if you said yes your part of the problem . the democrats will have little problem adjusting to this new form of government ideas, who will be affected will be the the old world billionaires who have been doing as they please keeping the ignorant stupid by providing a near 3 world education system to a country that will be in competition with the billions of people who will one day the US over with ought a fight.
If education does not become Americas first priority, then
God Bless America
your going to need it very soon.


Lisandro Gaertner

I really would like you to consider putting the download link directly in the post. I won't use ITunes, which gives me a lot of headaches, just to listen to your podcast. Please, help someone who is not an Apple fanboy.


"So my guess is that CEO's matter closer to 2's or 3's rather than 7's or 8's."
Then why do they get paid so much?
- SSBrown

The answer to that question can be found in Rakesh Khurana analysis of CEO labor market, Searching for a Corporate Savior: The Irrational Quest for Charismatic CEOs (Princeton University Press).



Because of the system of checks and balances, the president's power is limited. That said he's probably still the most powerful person in the world by quite a lot.

I'm wondering whether the Freakonomics Blog is losing its critical analysis skills in the push to get out regular postings.