The Modern Presidency and Economic Policy.

The rise of the modern presidency has been closely associated with an increasing intrusion of the federal government into the national economy. Since the turn of the century, presidents have asked for and been granted significant power to affect economic affairs. Not surprisingly, presidential administrations have come to be judged by the performance of the economy during their tenure in office. The poster displayed in Clinton's 1992 campaign headquarters -- "It's the economy, stupid." -- spoke a lesson that will not soon be forgotten by a sitting president: the domestic economy cannot be taken for granted.

Students trying to understand the role that the modern presidency plays in economic policy face a formidable task. On the one hand, they must master the jargon of economics and the economic theories that have guided economic policy since the Great Depression. On the other hand, they must understand that political and institutional realities that define the policymaking process.

Scholars offer, with varying success, several approaches for understanding the economic and political dimensions to economic policy. Some analyze the ideas and policies that have dominated one or more administrations. Others focus on the personnel and workings of a particular institution like the Federal Reserve. There is also a fascinating quantitative literature on such subjects as the political business cycle. Frendreis and Tatalovich's The Modern Presidency and Economic Policy is the first textbook that provides an introduction to the complex economic and political issues surrounding economic policy by bringing these approaches together.

The book is divided into four parts. Part I analyzes the goals of modern macroeconomic policy in the United States. Part II considers the ways in which economic policymaking has become fragmented in such areas as fiscal policy, monetary policy, and international economic policy. Part III investigates the politics of economic policy in such issues as the business cycle, countercyclical policy, and public opinion. Finally, Part IV analyzes the different presidential styles involved in macroeconomic policy and the effect of chronic deficits on these styles.

Written in a reader friendly style, The Modern Presidency and Economic Policy offers students in-depth analyses of economic ideas, institutional structures, policy processes, and personalities that have shaped economic policy for the last 50 years. The book's greatest strength is the ease with which complex economic ideas are explained to readers who may not feel comfortable with the economist's view of the world. Excellent graphs, charts, and tables scattered throughout the text enable readers to trace out various issues and policies from one administration to another.

Although Frendreis and Tatalovich provide insightful discussions of the ideas, institutions, and political processes involved with macroeconomic policy, there are shortcomings to the book. There is little discussion of regulatory policy per se, or the way in which regulatory institutions and policies are directed and controlled by the presidency. This is surprising given the fact that regulatory policy is identified in the first chapter as one of the three major tools of economic policy (pp.12-13). Readers may also have a difficult time piecing together the overall thrust of economic policy in particular administrations. Excellent historical discussions in separate chapters on budgeting, monetary policy, international economic policy, countercyclical policy and economic management enable the reader to see the evolution of policy in these areas across administrations. But often it is difficult figuring out how policy initiatives in these areas fit together within an administration or understanding the overall change in economic policy that occurs across administrations.

These shortcomings aside, The Modern Presidency and Economic Policy is a welcome addition to the policy and presidential studies literature. It should prove to be a valuable text for students and teachers seeking an introduction to the complex relationship that has grown up between government and the economy in late twentieth century America.

Edward J. Harpham
The University of Texas at Dallas

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