To respond to Matt Yglesias and some of the folks in the comments, my column on the 2012 election shouldn?t be understood as an endorsement of policy nihilism. Good policy leads to good economic outcomes, and good economic outcomes lead to electoral wins. All else being equal, an incumbent who governs well will have a better shot at reelection than a candidate who governs poorly.
But the point of the column is that all else is rarely equal -- and that?s particularly true during global economic crises and recoveries. Government policy -- and, much more to the point, the decisions of the executive branch -- contribute to economic outcomes and thus to political success, but they don?t decide them.
The last three years prove the point nicely. The economic policies of the Bush administration were very different than the policies pursued by governments of Germany, France, Spain, Italy, Japan, Canada, Latvia, Russia, the Netherlands and the U.K. But every country on the list fell into recession in 2009.
Some of those countries managed to respond to the recession more effectively than others, and I imagine that the governing coalitions in those countries have done better than their counterparts in countries where the response was less effective. But some responded effectively and still found themselves swamped by the global downturn. If you?re an export-focused economy and your trading partners suddenly have to cut back on consumption, you?re likely to find yourself in some trouble.
In normal times, these sorts of events arguably balance out. Some of your trading partners are enjoying healthy economies and some are enduring rockier times. Some economies suffer financial crises but most enjoy a stable banking system. Some are cutting back on spending but others are cutting taxes and making public investments. Some central banks are tapping the accelerator while others are pumping the brakes.
But that?s not true during global economic crises, or global economic recoveries. During those periods, almost everything is on one side of the scale or the other, and so even if you manage your economy well and see unemployment rise by less than your neighbors, the fact remains that unemployment is rising, and people don?t like it when that happens.
The assumption of today?s column is that the global economy will, over the next five years, begin to recover, and it will begin to recover all at once, in a way that makes whoever is in charge look rather good.
An example: America?s recovery has been badly hurt by the debt crisis in the Eurozone. If that crisis works itself out over the next three years, then Europe?s woes will stop dragging down American growth, and whoever is in charge of the American economy will look pretty good. Another: if exports pick up and corporations begin hiring again, the housing sector will recover even if government housing policy doesn?t look any better.
That?s not to say policy doesn?t matter. It does. You can do an extremely bad job and destroy your recovery, as FDR did in 1937, or an extremely good job and substantially accelerate it, as he did at other points in his presidency.
But even a mediocre manager looks brilliant during a boom, and even a skilled executive can seem like a dunce during a bust. We?re coming through a period when very few governments look good, but my guess is we?re entering a period when a lot of governments are going to look better than they are. And that?ll be true both for the governments who are managing their economies effectively and those that manage their economies poorly.
Source: http://feeds.washingtonpost.com/click.phdo?i=11a1a48adaa5650e464f1a79228abeeb
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