Matt Yglesias

Bad Timing

In his recent book, Unequal Democracy: The Political Economy of the New Gilded Age Larry Bartels persuasively argues that macroeconomic performance is better under Democratic Presidents than under Republicans ones. So how do Republicans win? He cites several factors, but one of the most important is timing — Republicans have tended to produce decent economic performance in election years, and election year economic performance seems to be the only kind of performance that impacts public opinion. But John McCain’s timing isn’t so good, and the scary economic headlines are correlating with a huge boost for Barack Obama in the polls:

I heard some talk last night on cable to the effect that foreign crisis drives voters to the GOP whereas economic crisis drives voters to the Democrats. I don’t think that’s actually true of the economy — rather, bad economic performance is bad for the incumbent party and good for challengers.

Unequal Democracy

I would recommend both Larry Bartels’ book Unequal Democracy: The Political Economy of the New Gilded Age and Theda Skocpol’s review of the book. Bartels’ main point is that contrary to what many believe, partisan politics has a large impact on the course of economic change, with Republican presidents leading to strong income growth for rich people, and Democratic presidents being better than anyone else. Bartels further argues that Republican politician succeed in spite of this fact not because voters are “distracted” by other concerns, but instead primarily because:

– Voters tend to behave only as if election year economic performance matters, not performance across the entirety of a term.

– Fundraising impacts election outcomes in a way that puts a thumb on the scales for politicians with pro-rich-people policies.

– Voters have trouble fully understanding the choices in front of them.

One way of summing it up is simply with reference to Bartels’ first point partisan politics has a bigger impact on economic performance than most people believe, and minoritarian policies can succeed politically precisely because most people don’t understand how important partisan politics are to these kind of outcomes.

What this book made me wish for was more economics: Bartels gives us a lot of empirical political science data that seems to indicate that partisan control of the White House is more economically important than you would think. Contrary to this, there’s substantial economic theory that seems to argue that this can’t possibly be the case. What would be really fantastic would be for Bartels to team up with an economist to attempt a more thorough treatment of the causal mechanism issues than Unequal Democracy offers — a Bartels/Krugman All-Princeton Crossover Spectacular or something.

The Rich Get Richer

New Center on Budget and Policy Priorities analysis by Chye-Ching Huang and Chad Stone shows that the pre-tax share of income going to the top one percent of the income distribution has reached its highest levels since 1928:

Naturally, conservatives think the best way to respond to this would be by reducing the tax burden on the long-suffering super-rich. Recently I’ve been reading Larry Bartels’ recent book on the political economy of the new gilded age in which he argues pretty convincingly that partisan politics has a bigger impact on the pre-tax distribution than many people are inclined to think.