So John’s post inspired me to write on a topic I’ve been thinking about for a while now. Let’s posit the following three assumptions:
- Incumbent US presidents perform worse when economic conditions are worse.
- If the US defaults on its debt, there could be catastrophic consequences for the US economy.
- The number one goal of the Republican party is to defeat Obama in 2012.
Ergo, the Republican party ought to do everything possible to ensure the US defaults on its debt.
(Note: we could also replace step two with anything else that might harm (or prevent an improvement in) the US economy, such as blocking a stimulus plan.)
What’s wrong with this logic? Seriously, if John (and years and years of economic voting literature) is correct, then shouldn’t the Republicans at this point be doing everything they can to tank the economy over the next 12 months or so, and wouldn’t causing the US to default on its debt be a great way to accomplish this goal? I don’t mean to pick on the Republicans here – we could have said the same thing about the Democrats in 2007 (e.g., did the post-Lehman economic mess elect Barack Obama?). Nor do I mean to pick on the economic voting litearture. I like the economic voting literature, so much so that I even wrote a book about economic voting.
But I’ve been wrestling with this question a lot, and especially so since McConnell came out and said that his number one goal as Senate majority leader was to deny Obama a second term. From a purely political standpoint, is there any political limit to what the Republicans should to try to do to cause the US economy to tank over the next 12 months? To clarify, by “political limit”, I mean any action which would cost the party more in votes in 2012 than it would gain from the corresponding decline in economic conditions?
So let’s start at an extreme. If every Republican member of Congress went out and simultaneously tried to physically destroy an important facet of the US economic infrastructure (and admit it, this would make a great scene in a Bruce Willis movie), then I think that we would all agree that that time would be different. Similarly, if the GOP behaved like any other responsible opposition in the US over the past 50-70 years, we should expect Obama to get the blame for a bad economy, and, by the simple reality of the zero-sum nature of the US’s two-party political system, Republicans to benefit.
So the question is, where are we now? Are we closer to GOP commados taking out the vital centers of infrastructure or advocating for policies that they claim their voters put them in office to, well, advocate for? My guess is it is the latter, which means John is probably right: if events in the next month or two have an adverse effect on the US economy over the next year, it is probably the president who plays an electoral price, not the opposition that controls a single house of Congress.
Which brings me back to my original point: why should we even be expecting the Republican party to try to prevent the US from defaulting on its debt? From a purely political perspective, shouldn’t this be gold for the opposition?
Anticipating reactions, let me try to offer a few possible answer to my last question.
First, as John notes, the Republicans might believe the Gingrich/Clinton story more than they believe the economic voting literature. As we know that at least one Republican Senator is not a big fan of political science, that might not be terribly surprising. Moreover, if Obama makes good on his threat to stop paying Social Security, then maybe John’s critics are correct and this time will be different.
Second, another,potentially more interesting answer is interest group politics. As Wall Street and the US Chamber of Commerce begin to put pressure on the Republicans to compromise, we might begin to see a real fight within the Republican party between those who want to preserve the business climate as it is and those who want to avoid an increase in taxes at all costs. Maybe it is Wall Street vs. the Tea Party, maybe it is the really rich vs. the super rich, and maybe it is something else. But it seems to me that if I’m right and at a macro-level it is politically in the interest of the Republican party to let the government default on its debts, then if the Republican party does turn around and agree to increase the debt ceiling, then there will be some very interesting micro-level processes at work here for us to try to discover.
Third, there is a strand of the economic voting literature that assumes voters are smart enough to not reward governments for economic prosperity that is delivered through bad economic policies that deliver short-term expansion but cause more serious longer-term problems. I have never seen an attempt to measure the opposite: are voters smart enough to not punish incumbent governments for failing to improve economic conditions because of an intransient opposition that is bent on causing long-term economic problems in return for short-term political gain? About the closest thing I’ve seen to this is a very interesting recent paper by Mark Kayser and Michael Peress which shows that voters in OECD countries during the great recession were much less likely to punish incumbents for economic conditions beyond their control (e.g., the “global” component of economic developments) then they were for ways in which their country’s economy deviated from global trends (e.g., the “local” component of economic developments, and ostensibly more the responsibility of the country’s government).