Who gets credit for the recovery (when it happens)?

Seth Masket (link from Andrew Sullivan) writes:

The upcoming presidential election is the most important election in a generation. . . . we are in the middle of (and hopefully on the tail end of) a truly catastrophic recession. The economy will recover, although that may not happen for several years. It seems fair to say that the economy will not be roaring again any time soon, meaning that Obama will at best win by a squeaker. If it dips back into recession, he’s toast. Most likely, it will end up just being a really competitive and interesting race on par with 2004.

The party occupying the White House when the economy does finally start booming will get the credit among the public for saving the country. It doesn’t matter so much who was in power when the recession hit or whose policies helped or hurt the recovery. To a large extent, it’s simply a matter of being in the Oval Office at the right time.

Masket goes on to quote Larry Bartels on the randomness of who happens to be the leader of a country when economic conditions improve.

I’m not saying Masket is wrong, but . . . isn’t this what many Democrats were saying in 2007-2008? The economy was in decline and the Democrats were on their way to unified control of the national government (the House, the Senate, the presidency—-all they were missing was the Supreme Court), so it looked like an automatic win. Whatever Obama and the Democrats did, they’d get credit for the anticipated recovery. Just like Roosevelt in 1936, or Reagan in 1984.

But it didn’t happen this way. It turned out that Obama came to power in the equivalent of 1930, not 1933, and the economy had a long way to go down.

Again, Masket might be right that the economy will bounce back (in some sense) by 2016 or whenever. I just think we have to be careful about assumptions than anyone can just sit back and take the credit for the recovery—-that’s the kind of thinking that (may) have kept us in this mess!

6 Responses to Who gets credit for the recovery (when it happens)?

  1. Seth September 13, 2011 at 10:45 pm #

    You’re right, Andrew. A lot of Democrats were making that assumption in ’07-’08. And it wasn’t a crazy assumption to make; not too many people predicted the economy to be in a borderline recession for the next four years, simply because the economy rarely does that sort of thing. Similarly, I’m assuming that the economy will stage a recovery in the next four years, simply because the alternative is (nearly) unthinkable.

    I don’t know how much of a danger there is that someone will “sit back and take credit for the recovery.” Obviously Obama didn’t go that route; he tried nearly a trillion dollars in stimulus and is still trying for more. You can blame him for a number of things, but I don’t think he’s guilty of inaction.

  2. Will September 13, 2011 at 11:33 pm #

    It didn’t turn out that way? Last time I checked November 2012 was still in the future, and at the moment we only know economic performance up to September 2011. Reagan and FDR were probably in better shape at this point, but they(especially Reagan) were hardly out of the woods.

  3. John Mashey September 14, 2011 at 2:53 am #

    This might be different from earlier, because I’d guess most people were pulling for an emergence from the 1929 crash. in this case, we have some billionaires who do *not* want the economy to get better and are willing to pay a lot to avoid that.

    Koch brothers + R.M. Scaife+others =$=> Americans for Progress and FreedomWorks, sparkplugs for the Tea Party.

    http://www.sourcewatch.org/index.php?title=Americans_For_Prosperity
    http://mediamattersaction.org/transparency/organization/Americans_for_Prosperity_Foundation/funders
    [Note: Charles Lambe Foundation is Koch-controlled.]

    http://www.sourcewatch.org/index.php?title=Freedomworks
    http://mediamattersaction.org/transparency/organization/FreedomWorks/funders

    1) Short term: Do they have the slightest desire for the economy to do anything but get worse before the 2012 election? How much is it worth to them to get any Republican into the White House, especially somebody like Rick Perry?

    2) Long term: Do they have the slightest desire for the Federal government to do much except go away?

    • Andrew Gelman September 14, 2011 at 8:43 am #

      John:

      From my casual reading of the history of the 1930s, I have the impression that some business leaders back then also opposed what they viewed as artificial attempts to stimulate the economy. One difference compared to then is that the federal government is a lot bigger now.

      • John Mashey September 14, 2011 at 11:21 pm #

        Thanks, that wouldn’t surprise me, but the issue I raise is that this might well go further.

        There exists a great deal Federal regulation than in 1930, and the Kochs really don’t seem to want any of it. They might consider it a good result for them if the economy tanked for a while, to the point that a) most environmental regulation disappeared and b) so did most of the Federal government.
        The have certainly proved they think long-term, they certainly were willing to spend $$ to pass CA Prop 23 ) to hamstring climate/energy legislation).
        http://en.wikipedia.org/wiki/California_Proposition_23_%282010%29

        Again, this is speculation, but whereas there have always been legitimate arguments about different ways to grow economy, one might contrast folks like George Schultz (who thinks electric cars are great, and was spokesperson against Prop 23) or views of The Economist … with what’s going ion now.

        Imagine:
        a) Suppose you had multi-billionaires who would happily see the economy crash for years or a decade if it meant radical downsizing of the Federal government and elimination of regulations they disliked?

        b) and were willing to spend money over decades financing organizations and candidates who would help achieve that goal, perhaps unknowingly.

        Is there any visible behavior among candidates or elected politicians that would fit b)? I.e., beyond the usual Democrat/republican arguments into economy-damage?

  4. Frank in midtown September 14, 2011 at 12:33 pm #

    The real fight is to “own” the inevitable decline in the budget deficit. You know what they say about leadership and parades.