Obama or McCain – an economic choice?

Writing in the New York Times Magazine 27th April 2008, and touching on some of the themes he elaborates on in his book Unequal Democracy: The Political Economy of the New Gilded Age, Larry M. Bartels, a professor of politics at Princeton, argues that the general belief that no political party in America can  be blamed for the state of the economy may be wrong, and that the whole of post-WW2 experience seems to suggest otherwise.

Many Americans seem to accept the conservative view that escalating inequality reflects “free market” forces immune to amelioration through public policy. As Treasury Secretary Henry Paulson put it, perhaps a bit defensively, the growing income gap “is simply an economic reality, and it is neither fair nor useful to blame any political party.” Paulson’s assertion, however, is strongly contradicted by the historical record. While technology, demographic trends and globalization are clearly important, purely economic accounts ignore what may be the most important influence on changing U.S. income distribution — the contrasting policy choices of Republican and Democratic presidents.

In support of this argument he pointed to what, even to him, are some fairly startling facts.

The Census Bureau has tracked the economic fortunes of affluent, middle-class and poor American families for six decades. According to my analysis, these tabulations reveal a wide partisan disparity in income growth. The real incomes of middle-class families grew more than twice as fast under Democratic presidents as they did under Republican presidents. Even more remarkable, the real incomes of working-poor families (at the 20th percentile of the income distribution) grew six times as fast when Democrats held the White House. Only the incomes of affluent families were relatively impervious to partisan politics, growing robustly under Democrats and Republicans alike.

Eventually, after he has said a little more about these differences and why they have occurred, Professor Bartels gets down to a question that is bound to crop, especially in this presidential election year.

If middle-class and poor people do so much better under Democratic presidents than under Republican presidents, why do so many of them vote for Republicans? One popular answer, advanced by Thomas Frank and others, is that they are alienated by Democratic liberalism on cultural issues like abortion, gay marriage and gender roles. This does not appear to be the case. In recent presidential elections, affluent voters, who tend to be liberal on cultural matters, are about twice as likely as middle-class and poor voters to make their decisions on the basis of their cultural concerns.

The good professor does not think that ‘popular answer’ holds up. He has, as you’d expect, an explanation of his own.

A better explanation for Republican electoral successes may be that while most voters, rich and poor alike. do vote with their economic interests in mind, they construe those interests in a curiously myopic way. Their choices at the polls are strongly influenced by election-year income growth but only weakly related to economic performance earlier in the president’s term. And while Republicans have presided over dismal income growth for middle-class and poor families in most years, they have, remarkably enough, produced robust growth in election years.

This is thought-provoking stuff that from which some lessons could be learned

  
Alan Blinder, professor of economics and public affairs at Princeton and former vice chairman of the Federal Reserve, in an article he’s written for the Australian magazine  Business Day – a revised reprint appeared in the New York Times supplement that came with The Observer last Sunday – is in no doubt what they are...
if history is a guide, an Obama victory in November would lead to faster economic growth with less inequality, while a McCain victory would lead to slower economic growth with more inequality. Which part of the Obama menu don’t you like?

 

 

 

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