Dan here…Angry Bear Mike Kimel addressed the issue of politics and economic growth in his book Presimetrics. Paul Krugman has as well in the last several weeks. Nathan Salminem takes another look. The post will be divided into three parts at Angry Bear, but can be read in its entirety here.
Guest post by Nathan Salminen (is a lawyer and an amateur economic and political researcher. Nathan has been politically active for many years, including working for the Senate Committee on the Judiciary as a law clerk. Nathan studied international relations at Georgetown University, worked in the software industry, then received a law degree from Columbia University. Nathan currently practices law in New York and runs Politics that Work.)
Which Party Is Better for the Economy?
There are several ways one can go about determining which party’s policies tend to perform better economically. One option is to look at what economists say. Another is to look at how the economy has performed during times when one party has had more power and compare that to how the economy has performed in the same place during times when the other party has had more power. A third way is to look at how the economy performs in places where one party tends to have more power compared to how the economy performs in places where the other party has more power. All three approaches have their advantages and disadvantages, but by weighing all three, one can potentially get a pretty decisive answer.
Opinions of economists
There are many different ways to assess the consensus of economists on policy issues. Much of the public believes that economists tend to be libertarian and to favor laissez faire economic policy. That idea- that economic wisdom favors leaving all things to the free market- is actually dead wrong. Economists generally tend to support policies at least as liberal as the policies the Democratic Party supports. Some examples:
• 71% of economists favor using government to redistribute wealth and only 8% strongly oppose it. In fact, the concept of the diminishing marginal utility of wealth is a very well established and non-controversial economic principle. Even Adam Smith expressed the view that the government should redistribute wealth.
• Only 12% of economists take the view that the costs of the stimulus outweighed the benefits– a view passionately held by nearly all Republicans.
• 75% of economists favor government tuning the economy with monetary policy– an idea often vehemently rejected by the Republican Party- while only 4% of economists strongly oppose it.
• Zero percent- not a single economist in the entire sample- of economists agree with the central tenant of Republican fiscal policy that cutting tax rates would boost the economy enough to cause revenues to increase.
• 94% of economists support taking action to address climate change.
In terms of specific policies, economists appear to consistently and overwhelmingly either support the Democrats’ policies or to be to the left of the Democrats. This stance on policy issues unsurprisingly translates into which party economists support: Democratic economists outnumber Republican economists by 2.5 to 1. In 2012, economists felt that President Obama had a better grasp of economicsthan Mitt Romney by a margin of almost 2-to-1 and that President Obama would grow the economy faster than Mitt Romney by a a margin of 20 points