Friday, November 05, 2010

Oh, please beat me hard

Andrew Koppelman

Today’s New York Times reports: “Republicans are standing by their campaign vows to slash spending for domestic programs immediately by at least one-fifth — $100 billion in a single year — even as many mainstream economists say such deep cuts could further strain the economy and should await its full recovery.”

The story highlights the peculiar situation the Republicans now face. From the standpoint of electoral accountability, it is likely that the voters will reward them precisely for further straining the economy and prolonging the recession.

Senate minority leader Mitch McConnell, who has been shrewdly focused on retaking political power from the Democrats, yesterday reaffirmed that his central goal is to ensure that Barack Obama does not get a second term.

That goal faces substantial obstacles. The same economic forces that doomed the Democrats yesterday are likely to work in their favor in two years, as the economy continues to slowly work its way out of recession. (As of today, the day after the election, Intrade is giving the Democrats, meaning Obama, a 60% chance of winning the Presidency in 2012.)

If their goal is to recapture the Presidency, then the rational course for them is to regard the American economy in the same way that General Sherman regarded the Confederate economy. They should aim at destruction and ruin. The lesson here is not peculiar to the Republicans. In a divided government in which the other party holds the presidency, the American people are functional masochists: they will reward you with office if you beat them. Hard.

This is a structural flaw in American democracy, which the emerging polarization of the parties is making clear for the first time, like a latent genetic disease triggered by a changing environment. One of the most attractive aspects of democracy as a political system is that it makes the interests of the governors broadly coincide with that of the governed: their desire for reelection is supposed to make them want the same things that the electorate wants. Those incentives have become skewed in the contemporary American political economy.

Let me be clear: I am not attributing any bad motivation to the Republicans. If anyone deserves blame it is the voters for their economic ignorance. (The one way in which the charge of elitism against Obama is fair is that he evidently does not think it worth bothering to try to educate the electorate about the economic logic of his program.) It is entirely possible that the Republicans will resist these electoral incentives and do what they can to help the country recover. Perhaps they honestly believe that the economists are wrong, and that massive cuts in government spending will be good for the economy. But if you want to understand their behavior, you should give some consideration to the hypothesis that they are rationally responding to incentives.

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