On Administrations, Economies, and Parenting.

[elfs]

Peter challenged me in my post about parties and economic outcomes: So what exactly is your theory to explain how any of these presidents deserve any credit OR blame for what happened to the economy during their terms in office?

I don't have one. I'm not sure I need one at this time.

Looking through the economics boards discussing the Dunne & Henwood paper, among the noise I see a large number of very talented trained economists wrestling with this very question. Some dismiss it, or invert the relationship, or point out that both are consequential on other factors emerging from the marketplace. Others embrace it and are trying to explain it. I'll wait and see.

Your question reminded me of another longitudinal study from another world: parenting. There have long been huge studies of what makes a successful parent, and what those parents do to have children reach adulthood healthy, whole, and ready to take on the world, as opposed to those parents whose children spiral down into poverty and self-destruction. Two classic outcomes were "Have a lot of books in the home," and "Have at least three sit-down dinners every week with your children." The problem with these outcomes is that, when they were introduced into families that previouly had not been doing them, there was little discernable change in their children's outcome. (No meaningful change at all for the books; a small uptick for meals, but nothing close to the outcomes for families that were already doing so naturally.)

The sad conclusion many social scientists have reached is that succesful parenting is not a matter of what you do, it is a matter of who you are. Sit-down meals and bookshelf-lined walls are merely indicators of other, nebulous values those parents have. Those values drive a parent's daily actions and reactions. They become thousands of little gestures, meaningful acts, and attentive moments that, over the child's formative years, add up to "being a successful parent." If you don't have those values then making the gross gestures isn't going to do a whole lot.

I suspect therefore that the answer lies in the "thousand small levers" theory of administration. It isn't a few grand things that the Dems do or the Reps fail to do that makes the Dems seemingly more successful at running our economy than the Reps. It's that the Democratic administrations have had values different from those of Republican administrations, and that the acts of the executive and his administration that flow from those values overall have contributed to more robust economies.

I do know this: looking at the objective data, and going on my own experiences, if I want to maximize my economic well-being, if I want to act in my own selfish best interests, I would not vote for a Republican for president.

Comments

[sirfox.livejournal.com]

i'd say that your examples of books and dinners aren't "what you do" but more "what you have".

All the books in the world are just six inches of paper insulation on the wall, unless they get read, and that starts with the parents reading to kids at a young age, and also reading themselves. If it's Something Mom And Dad Do, then it's something the kids will emulate. If the books just sit there unread, it's a waste of paper. Likewise, if the family sits down to dinner together, and all just watch the TV when they're not shoveling down the meatloaf and green beans, the only benefit will be nutrition and cheaper food bills. If they actually USE that time to, say... *TALK* to each other, or even just watch the news and then discuss what they all just saw, That'll stimulate critical analysis and provoke thought.

Books and Dinners are just things, events. More importantly, they're opportunities, but they don't happen on their own.

I'll now amateurishly attempt to apply this to national economics.

If we take the stereotypical GOP philosophy on the economy, it's to toss the tools out mostly to the wealthy, who already know how to use them. (lots of tax cuts, coddle the wealthy, and promote big business), it works great for those getting the most attention. (I.E., the rich, and holy shit have THEY done well under this administration) But the lower and middle classes get, at best, a miniscule tax break, and whatever scraps trickle down. Even most of the "tools" that the GOP provides aren't accessible to anybody but the rich, and there certainly aren't lessons on how the lower/middle classes can best utilize them.

The democrats, on the other hand, go in for more social programs that benefit the general good, and are financially and psychologically accessible to more people. (higher tax ratios towards the wealthy, health care, funding for higher education, etc.) Basically, things that make the bulk of the population a little more relaxed. When people aren't really scared about scarcity and hard times, they're more likely to spend than save (http://www.slate.com/id/1937/), and for the economy as a whole, there is more impact from a whole lot of average people buying a little more than one rich person spending lavishly on luxury items.

In both cases, it's just a case of providing tools to certain portions of the populace, but perhaps there is a better match up between both HAVING the tools at hand for the bulk of the population, and SEEING a financial model acted upon that could be transferred to a personal level.

Just try and convince your credit card company that you've built up all this debtDeficit Spending to help the local economy, and shouldn't be held to task to pay it off right now, versus living within your means when that's a perfectly viable option instead of slapping plastic, or even paying that debt down.

That link from above indicates to me that the psychology of a population has a hell of a lot more to do with how an economy behaves than is accounted for in our current $$$ only models. Perhaps it's a case of the collective population's (subconscious?) perception that "we have a better/kinder 'parent' for the next four years, so i don't need to make such a financial 'clench' on mr. pocketbook."

I make no claim of economic scholarship, just thinking aloud here.

Still not getting it

[ideaphile.livejournal.com]

My point here-- and Omaha made the same point the other day (here (http://elfs.livejournal.com/873006.html?thread=4491310#t4491310))-- is that the data do not show that Democratic (or Republican) presidencies are correlated with robustness in the economy. Both major parties are fully capable of being frugal or extravagant depending on public opinion at the time.

The fact that economists can't reach a consensus in this case isn't surprising; economics isn't a science yet. What's more telling to me is that any given economist (or layperson) will usually have some explanation to offer whether or not they really understand the situation.

But I think I can offer some observations that aren't particularly controversial.

Republicans traditionally get the benefit of the doubt when it comes to controlling government spending, but that presumption works against us when one comes along who isn't so thrifty, like the current President Bush. Voters suppose that if a Republican is willing to go along with heavy spending by Congress, there must be a good reason for it, even though there usually isn't. (But sometimes there is; Reagan's deal with Congress for temporarily increased military spending at the cost of temporarily increased social spending is the clearest example in my lifetime.)

Conversely, when we find a Democratic president who's willing to help reduce government spending, we're all happy about it; Clinton is the most obvious example of this. Now, I think Clinton started his campaign planning to increase spending in various areas-- certainly his wife did-- but voters made it clear that isn't what they wanted. Clinton listened, made the promises we wanted to hear, and then actually kept them. The result was striking, as we see in this chart from good ol' Ross Perot:

(http://perotcharts.com/category/challenges-charts/page/9/)

You can claim that Clinton deserves the credit for this result. Republicans attribute it to the trend toward conservativism that resulted in their Contract with America and Republican majorities in Congress for the last six years of the Clinton administration.

I think that both parties were really just complying with the demands of the electorate. And that begs the question, what influenced those demands? Well, when it comes to fiscal conservativism, it certainly isn't the Democratic Party providing the inspiration.

. png

What I remember - Part1

[rand0m1.livejournal.com]

This has turned out to be extremely long. I apologize for this but I just haven't been able to find a way to shorten it and still say what I need to say. Its also too long for a post so I'm having to break it up into two parts.

I'm not an economist but I can relate how things have been for myself, my family and the people around me. I can't comment about anything prior to 1980 since I was too little to really understand the things going on around me before then.

I grew up in a middle class neighborhood in the midwest. The families were a mix of blue collar and white collar. Most had children.

What I remember about the 80s

I remember my Dad loosing his job (construction) in the early 80s. He was able to find anything for close to two years. I remember his fury (my dad was a calm, quiet person) when someone in the Reagan administration (it was long ago and I can't remember exactly who) responded to the unemployment situation with (approximate quote) "There are plenty of jobs out there. The McDonalds just down the street is hiring." I remember when he was finally able to get work that he had to spend a lot of time on the road and we only got to see him on the weekends, and even then sometimes he was too far to come home.

I remember my Mom having to go barefoot a lot of the time because with three children and their needs she couldn't afford more than one pair of shoes and she had to save those for work.

My Mom was a nurse and I remember eating at least two meals a week at the hospital. Employees got discounted meal tickets and she could feed all of us that way for less than $10.

I remember another family we were friends with having to sell pretty much everything they owned and move out of state to family because they were about to loose everything.

I remember a friend of mine having additional families staying with them because they had lost their homes and were trying to live out of their cars.
(This had to have been mid 80s because she didn't move to my neighborhood until 6th grade)

I remember farms that had been in families for generations foreclosing.

I remember my brothers and many of their friends joining the military because there just wasn't anything else available for them.


What I remember about the 90s

I graduated high school in 1990. I had to join the National Guard in order to go to collage. My parents couldn't afford to send me but we weren't poor enough to qualify for any assistance. I worked my summers and did what work I could during the school year. With the Guard benefits and multiple jobs I was able to pay 100% of my school. My parents made sure I had good clothes and was able to get back and forth on the weekends so I could do Guard duty. In 1994 I left school, got married and moved out here to Seattle.

I remember my parents were doing well. They were able to fly out and visit us a number of times.

My brothers got out of the military and were able to do well with jobs.

By 1996 Lee and I had very good jobs. Within 2 years our income was enough that we could easily pay all of our bills, buy a new home and have extra money to spare for the fun things in life. I remember one Christmas spending $500 on Lee's gift and in no way feeling as if I had spent more than we could afford.

Re: What I remember - Part2

[rand0m1.livejournal.com]

2001 and beyond

I remember fear. Fear of loosing our jobs (which we did). Fear of loosing our home (which we would have if it hadn't been for the generosity of Lee's parents).

I remember my mother taking early retirement because the hospital was assigning her (an LPN) to ICU where she was supposed to handle 4 patients by herself at the same time. The rule of thumb for an ICU unit is that there is a RN for each patient. My mother was being expected to perform duties she was not qualified to perform in a situation where a small mistake could mean the death of a patient.

I remember one of my brothers loosing everything, including his family, and having to move in with my parents.

I remember many of my brothers' friends (all of who had collage degrees) having to get jobs installing septic tanks, working at a quarry cutting stone, working for a utility company installing cable, etc.

I remember a friend of Lee's who is/was a graphic designer. He'd won an Emmy for some of his work. Now he was working as a security guard in a mall.

I finally managed to get a job just as my unemployment insurance ran out due to the generosity of an old boss.
And yet more fear as that business failed and folded before my eyes. One day the doors just closed. I never was able to get some personal items I still had at my desk nor was I every able to get all of the back pay they owed me.

I remember applying for jobs at grocery stores and gas stations (I had experience from my high school and collage days) and being rejected because "You'll just leave as soon as you find something better".

I remember working at a Jiffy Lube helping change oil in cars so I could bring in some kind of income.

I remember Lee and I struggling with major depression, loss of ego and self worth. This is a huge hole we are struggling to escape even now.

Lee and I finally got jobs in the family business.
This was pretty much a nightmare and hurt our fragile mental and emotional states but it brought in money so we could survive. It was also the first time we had health insurance in 6 years.

Now Lee's parents were business owners. I know they did well in the 90s. They were able to build a 3 story home on the waterfront and they were able to expand their business a lot in that time.

Now, they are multi millionaires. They own 3 homes, two waterfront and one in an exclusive area in Arizona which has a second fully equipped guest house. They also own a yacht with 2 full bedrooms, 2 bathrooms, kitchen, living area, large screen TV, etc.

I don't begrudge them their success but I can't help but feel a little frustrated. All of the people I mentioned are good people. They work hard, take pride in their work and always do the best they can.
So why is it they suffer so much while my in-laws and their peers seem to wallow in success and rewards?

[tagryn]

That sounds like going on gut reaction than reasoned analysis, then, if you can't pin down specific ways the Executive-economic process works but still feel there's a cause-effect relationship present. Gut reaction's fine as far as it goes, but it doesn't really address ideaphile's counterpoint about POTUS's relatively weak influence on the budget.

It's an interesting correlation, but that's as far as it goes. The cause-effect is too muddled to really build a strong case on, IMHO; there's stronger arguments out there for choosing one party over another than this one.