It’s Not the Economy, It’s the Politics!

https://room4truth.com/2011/08/12/its-the-economy-stupid/

Nothing like a heated and vitriolic campaign season to send us longing for times where differences of opinions were valued, discourse was civilized and political opponents debated in a respectful manner. In 1992, during a Clinton-Bush campaign, James Carville, Clinton’s campaign manager, pointed to the fact that citizens vote on the basis of the state of the economy rather than on a far-flung victory in a foreign country. “It’s the economy, stupid” became the mantra of that election season.

Which got me thinking of where we are today in terms of the basis upon which people form their choice of candidate. Or more importantly, what drives our political divide and its ensuing consequences. Interestingly enough, Fareed Zakaria addressed this particular issue in a recent op-ed about the origin and rise of populism. Citing a research paper written by Harvard’s Kennedy School of Government, Ronald Inglehart and Pippa Norris, Zakaria points to the decline of economics as the pivot of politics as the main reason for the recent rise of populism. Evidently, old voting patterns have been waning for years, and by the mid 1990’s voting patterns had stopped falling according to class divide and economic issues have taken a back seat to social and environmental ones.

Some would argue the opposite. As income inequality rates have risen in the US and other western economies, social cohesion and social capital have slowly eroded, purportedly leading to divergence of interests and opposing views of what constituted sound economic policies. This led to failed cooperation between heterogeneous social groups and lack of political consensus regarding the extent of government involvement in free markets, formation of social safety nets and provision of public goods such as education and infrastructure. Samuel Bowles, and economist from Santa Fe Institute, famously argued that economic disparities among citizens affect bargaining, policy making, and invariably stall economic performance to the nation’s detriment.

I can see the merit in both arguments. Zakaria does make the point that “in the past two decades, there has been an increasing sense that economic policy cannot do much to fundamentally reverse [economic] slowdown. Voters have noticed that, whether it’s tax cuts, reforms or stimulus plans, public policy seems less powerful in the face of larger forces.” Indeed, social values and beliefs have largely been driving voting patterns — same-sex marriage, abortion, climate change — to name a few.

Voters’ preferences for a specific party are often solely based on Supreme Court nomination prospects that largely affect our social fabric. But I would not go as far as to say that “left and right have converged more than ever on economic policy.”

I would instead argue that in spite of some obvious agreements and consensus of basic policies that are needed to drive our economy towards prosperity — infrastructure bank, tax reform and relaxed regulation — we are faced with a total paralysis and inability to act on such shared platform. I do believe that economic disparity and divergent social values are at the core of what hinders cooperation between parties. But apparently, there is one more element in play — politics. Michael Porter, one of Harvard’s most published economists, led a recent survey about the state of U.S competitiveness in an “effort to understand the disappointing performance of the American economy, its causes, and the steps needed by business and government to restore economic growth and prosperity shared across all Americans.”

Porter et al concluded that America has compelling economic strength particularly at the hardest things — innovation, science, entrepreneurship, and financial markets. So why are we not as competitive as all these strengths would suggest? The answer lies with the political system.

What has been a vibrant and dynamic political system has come grinding to a halt in the past 20–30 years. We have gone from pragmatism to ideology and where ideology rules compromise is elusive.

This “dig your heels in the ground” mentality where compromise in nowhere in sight is at the root of the problem. According to Zakaria it is almost impossible to compromise on the core issue of identity and one’s own vision for America.

But while no one perspective is right, we need to somehow put them together.

Porter admits that as an economist he was shocked to realize that our economic woes are so tightly linked to our political system. To that I would retort that before economics was declared as a science in and of itself, it was the study of political economy and for a good reason.

Be it as it may, Porter concluded that “our failure to make progress reflects an unrealistic and ineffective national discourse on the reality of the challenges facing the U.S. economy and the steps needed to restore shared prosperity…A flawed U.S. political system has led to an absence of progress in government.” How we fix a broken political system with a fractured social landscape is an issue that our one of the least-favorite candidates should try to resolve.

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