On Monday, Paul Krugman discussed the upcoming elections in the United Kingdom, Economics and Elections. He noted that the current conservative government is likely to stay in power despite the fact that they’ve done a terrible job managing the economy over the past five years. But the economy has been doing better over the last year or so, and that is all that matters to the voters. This is Politics 101, and I talk about it all the time. It is the reason why I hate things like this week’s Tom Tomorrow, where he mocks the chances of Ted Cruz becoming president. If he manages to get the Republican nomination, he will become president if the economy tanks in 2016.
But Krugman noted one thing that is very near and dear to my heart, “[T]he evidence suggests that the politically smart thing might well be to impose a pointless depression on your country for much of your time in office, solely to leave room for a roaring recovery just before voters go to the polls.” Of course, no one thinks people actually do this. For one thing, it is hard enough to get people to accept the well documented fact that people vote on the basis of the economy shortly before an election. Getting them to believe that voters won’t hold leaders responsible for years of suffering would be a harder sell, even if it is almost certainly true.
I’ve been arguing for years that the American political system is naturally designed to elect Republican Presidents. This is because conservative economic policy is bad. When Republicans get into office, they tend to cut aid to the poor and cut taxes on the rich. While this is very effective at making the rich richer, it is not good for the economy. It just puts more money into the hands of those who already have more money than they can spend. And it takes money away from poor people who would spend it all. But after the bad economic policies of the first year, the economy will slowly adjust. By the fourth year of the Republican presidency, the economy is improving and the president is re-elected.
The situation is the opposite with Democrats. Their policies tend to be better (although not that much better). So things like the Obama stimulus really do help the economy — for a while. But (again) as with the stimulus, these programs run out and the economy declines. So why did Clinton get a second term? Alan Greenspan. Why did Obama? Because the economy was so depressed we even have a decent chance of getting a third consecutive Democratic President.
Obviously, this is just a theoretical construct. Unlike my theory about the New Democrats, there is no empirical basis for this. But I still think it is something that we need to think about. It highlights the fact our political system is screwed up and does not lead to us choosing politicians and parties who actually do perform for us. We shouldn’t have to fear that Ted Cruz could be our next president. But sadly, we really do need to fear it. And if he were elected, there is every indication that he would be re-elected.