Economic View It’s an Election, Not a Revolution By TYLER COWEN NYT: February 17, 2008
It has become common wisdom that the battle for the presidency is all about the economy...Fundamentally, democracy is not a finely tuned mechanism that can be used to direct economic policy as a lever might lift a pulley. The connection between what voters want, or think they want, and what ultimately happens in the economy, is far less direct.
Voters may be concerned about the economy, but there is little evidence that the electorate, as a whole, really wants to engage in close consideration of economics. The current campaign season is a case in point...
On the Republican side, the situation is no better. The candidates have generally sought to cloak themselves in the mantle of Ronald Reagan, emphasizing his conservative principles, particularly his disdain for big government. But they might have stressed how President Reagan improved funding for the Social Security system or how he engineered what was then the largest tax increase in American history. In fact, the economic policies of his administration and that of Bill Clinton were marked by more continuity than change — and it is no accident that both administrations were happy to work with Alan Greenspan...
A Democratic president may propose more spending on social services, but most of the federal budget is on automatic pilot. Furthermore, even if a Republican president wanted to cut back on such mandates, the bulk of them are here to stay.
Yes, the election does matter. Even small differences on economic issues affect millions of Americans. But the record of the Bush administration should prove sobering to all those who expect the American political economy to turn around in the next four years.
Many conservative and libertarian economists supported President Bush, thinking they would be getting policy drawn from the work of Milton Friedman and Martin Feldstein, two respected market-oriented economists. Instead, in economics, the Bush years have brought an increase in domestic government spending, and some poorly-thought-out privatization plans. For all the talk of an extreme right-wing revolution, government transfer programs like Social Security and Medicare have continued to grow. And despite big mistakes involving the Iraq war, Mr. Bush wasn’t punished by voters in 2004.
Of course, an administration can make big economic changes. The New Deal brought about a revolution in economic policy — but those were special circumstances. The United States was in a very deep depression, and the concept of economic planning was sweeping the world. That period is an exception; it does not reflect the general tendency of the American political system, which usually operates by checks and balances. Shifts in economic policy are usually quite moderate.
The reality is that democracy is a very blunt instrument, and in today’s environment we are choosing between ways of muddling through. We may hear that the election is about different visions for America’s future, but the pitches may be more akin to selling different brands of soap.
We hear so many superficial messages precisely because most American voters have neither the knowledge nor the commitment to evaluate the pronouncements of politicians on economic issues. It is no accident that the most influential political science book of the last year has been “The Myth of the Rational Voter,” by Bryan Caplan. The book shows that many voters are ill-informed or even irrational; many economic issues are complex, and each voter knows that he or she will not determine the final outcome.
Rather than being cynics, we should be realists. Democracy is reasonably good at some things: pushing scoundrels out of office, checking their worst excesses by requiring openness, and simply giving large numbers of people the feeling of having a voice. Democracy is not nearly as good at others: holding politicians accountable for their economic promises or translating the preferences of intellectuals into public policy.
THAT might sound pessimistic, but it’s not. Many Americans will be living longer, finding new sources of learning and recreation, creating more rewarding jobs, striking up new loves and friendships, and, yes, earning more money. Just don’t expect most of these gains to come out of the voting booth or, for that matter, Washington.
And if you’re still worrying about how to vote, I have two pieces of advice. First, spend your time studying foreign policy, where the president has more direct power, and the choice of a candidate makes a much bigger difference. Second, stop worrying and get back to work. Tyler Cowen is a professor of economics at George Mason University.