The same thing was highlighted in Kevin Phillips'
book from a few years ago.

If Fox News doesn't slam it home, it's not real.

Republican's aren't so much concerned about making money, they are more concerned that poor people might start making money.

Once again, it appears the next six months will be critical.

The charts could be explained by looking at what the Fed does with interest rates during election years.

Hrm...

I wonder how much of that is Repubs trying to influence the economy downward to reflect bad on the Dems in power by election time? Yeah, conspiracy-ish, but at this point, can you blame me?

The Drum post from 2005 is fascinating, but I am absolutely unable to think of a plausible mechanism whereby Democrats would make the economy so much worse during election years. (And as an econ major, I am pretty good at coming up with plausible mechanisms.) Which leads me to suspect that the whole thing is just a fluke resulting from small sample size. I haven't read the Bartels book, but the first question is would ask how robust are the results? E.g., how many administrations and/or how many years can you remove from the analysis and have the same result?

Wealth is relative. If everybody's driving a Merc, what's the point. It's important to have "losers" so you don't have to work too hard to feel good about yourself. And it's harder to abuse your employees when they can find another job easily in a vigorous economy. And it's more fun to get ahead by getting around the rules than by following them. I could go on and on.
Just go to any rich-old-fart cccktail party for a full selection of reasons.

Easy answer: the economy is at a stage where cooperation helps every class better than competition. Republicans haven't got (or won't get) the message.

just a guess, but I imagine the republicans will have a hard time making economic hay in this election year.

It's the relative difference in wealth that matters, not the absolute numbers.

The value of your assets is relative to those of everyone else you can transact with. If everyone else is destitute, you don't need a lot of money to live as if you are rich.

Conversely, if everyone has large piles of money, nobody has much incentive to work for your money, so nobody considers your slightly larger pile to be all that special. This has the effect of diminishing the real value of your assets.

In other words, when everyone has money the buying power of your assets declines. To maintain the relative buying power of your money you want to ensure that everyone else needs it more than you do. And the simplest way to do that is make sure that most people can't make enough money to live comfortably.

You might think the answer is that lots of working class voters vote on social issues rather than pocketbook issues — the What's The Matter With Kansas? theory. - Kevin

It has nothing to do with any issues. As Mark Penn told Al Gore. "They like your policies. They don't like you." Americans vote for Republicans because Republicans look and sound like macho football coaches. They don't vote for Democrats because Democrats look and sound like effeminate history professors. But don't worry this year. Coach Bush has failed so spectacularly, Americans will vote for Dems until he is gone.

I've seen this claim many times before, and I still think there won't be enough data points to generate a significant result. How many presidents have we had in the modern era? Sure, we could use monthly data or something to pad out the # of observations, but how many times has the presidency changed party?

Business cycles are relatively long-lived creatures too. How many tech-booms did we experience?

I know Mr. Rodrik said, "Bartels shows in his book that this difference is not a statistical artifact [...] and it is not the result of Democrats coming to power during better economic times", but I just don't see how.

Not enough time, not enough presidents, not enough business cycles. Not to mention the President/Congress assumption, or the slim marginal difference between Democratic and Republican economic policies.

But maybe it's explained fully in the book. I actually believe such an effect could exist, but it would be small, the causal mechanism subtle, and take a lot of data to tease it out.

The core of this entire discussion is the political truism that voters reward the party in power during good economic times and penalize the party in power during bad economic times.

In the political world, it follows from this that Presidents deserve credit for economic growth (and low inflation, and reduced income inequality, and other good economic things) and blame for recessions. Outside the political world, this proposition makes sense only occasionally. Jimmy Carter did not create the inflation that wrecked his Presidency; Bill Clinton was not responsible for the technology bubble, nor was George Bush at fault when that bubble burst. It is fair to give Ronald Reagan credit for resisting all suggestions that he pressure Federal Reserve Chairman Volcker to ease monetary policy in the early 1980s, something earlier Presidents had done when facing economic downturns but that no one suggests today. But this was an exception. As a rule, the business cycle ebbs and flows without regard to who is in the White House and is rarely effected in the short run by what Presidents do there.

Individual sectors of the economy, of course, can be impacted by what the federal government does. Huge increases in defense spending, for instance, during the Truman, Kennedy/Johnson and Reagan administrations had significant effects for specific groups of companies, workers and regions of the country. Right at this moment, corn prices paid to farmers in Iowa are going through the roof, following enactment of multiple mandates to increase use of fuel made primarily from corn. Also, policies pursued in one or more administrations can influence the course the economy takes much later; examples include the expansionary fiscal policies of the 1960s that contributed to inflation a decade later, and the consistent pursuit of trade liberalization by administrations beginning with Franklin Roosevelt's, which laid the foundation for the globalized economy we know today.

These, though, are issues separate from the political world's universally accepted and entirely mistaken belief that a good economy is a gift bestowed upon the nation by a wise President, while a declining economy only happens because the President has failed.

Boehner, the cryer, a macho coach? Larry Craig, toe tapper, macho coach? Mark Foley,boy chaser, tough Macho Coach? Vitter, diaper wearer, macho?

The commentators are saying that it's a coincidence. Statistics people, what are he chances of this?

It is not surprising that the rich do well under Democrats, historically the stock market has done well under Democrats. The amazing thing is that 95% of stockholders are convinced of the opposite. No amount of data can convince them.

And the posters who say its the relative wealth, not the absolute size of it that determines social status and power. How could Neal Diamond be "having a time with a poor man's woman", if she wasn't deseperate for his cash.

If it is really policy that drives these graphs, this leads to the question: "Why do Dem policies persistently bottom out in election years?"

A three year old post is fascinating? I'm missing something. Besides, that chart only goes up to the 95th percentile. 96 thru 99 have some serious weath that might explain why we get saddled with R's, and ought to be shown. What if that chart was weighted for the wealth owned by the percentile, how would that look?

"Why do Dem policies persistently bottom out in election years?"
Posted by: But Why

Because Republicans control the Fed, Wall Street and most of the other levers of economic power and Republicans are not stupid. They are willing to throw a bone to regular Americans every four years.

Eric's right.

Greenspan jacked the interest rate up in 2000 to slow the economy so that Bush would win. Then right after the election he lowered the interest rate to levels not seen since the 50's to head off the recession.

Since the economy runs on demand and 70% of demand is consumption, the consumers had to increase spending. The only source of money was rising home values, so the fed kept the interest rates low, encouraged refinancing even if it was reckless (Greenspan - get ARMs) and the economy lived off the housing bubble. until Bush was reelected.

Immediately after the election Greenspan and his fellow Republician Bankers at the fed started kicking up the interest rate to head off the damage they had done in 2001-2004, but it was too late, and we now live with the consequences. Bush reelected and the worst economic downturn since the Depression.

The Explanation

The thing is, Bankers live in the financial economy, not the real economy. They make fortunes banking and managing other people's money, but do nothing to build the economy itself.

Building the economy means making the workers more productive. That's the sole legitimate value of management - making an organized group of workers more productive than the same number of separate individuals. That's the only value of corporations - or government for that matter.

But bankers see the economy in the same terms as an accountant, and accountants cannot accurately account for the productivity of labor. Professor Likert - who invented the well known Likert scale - spend the last decades of his life trying to develop an accounting system that accounted accurately for labor, and he failed.

Give a banker - or an economist for that matter - a choice between using accounting data to make a decision and using qualitative data (experience, knowledge, even when confirmed in large groups) the banker or economist will choose the accounting data over the qualitative data. Management researchers have confirmed this. But they have also done research that confirms that managers who use both quantitative and qualitative data perform better than those who use only quantitative data.

Bankers and Republicans stick with accounting data and Democrats also recognized the qualitative data that gives the human side of things.

The real economy is made up of important factors that are measured in both quantitative and qualitative terms, but the financial economy is a man-made creation in which quantitative factors dominate everything. I wouldn't expect finance people to be especially good at managing a productive operation in the real economy.

Republicans ignore the factors that qualitative data says are important. They have to. That was the basis of the arguments used by labor and socialists. I would expect Democrats to make better decisions on the average over the long run. They have a better understanding of the qualitative human factors that make an economy - and a society - work.

if Democrats produce better income results for everyone, and particularly for the more numerous lower-income groups, why do they not always win?

The Republicans put alot of money into studies of how to play on peoples emotions and bias. The dowside is that it creates organized hypocrisy. And the people are wising up to their tricks.

Norquist shrieks about smaller government, yet it grew under Bush.

The rail against government spending, yet Bush has outspent LBJ. 7 of the 9 trillion of debt was created by Republican leadership.

It's certainly interesting for the Democrats to have a better plan in Kansas. Should we be saying, "Dorothy, we're not in Kansas anymore?"

How about these amusing omissions from the Clinton Library Files:
http://ladycatherinebedamned.blogspot.com/2008/04/what-was-in-clinton-library-redactions.html

The charts could be explained by looking at what the Fed does with interest rates during election years.

Bingo! What really matters to the wealthy is that the rest of society doesn't catch up. So, given that their income growth is the same under both Republicans and Democrats, they benefit from the spread in income growth between themselves and the rest of us in the labour class. If the bottom 95% is catching up through higher wage growth, then they will eventually have more competition in capital markets through the savings growth in the bottom 19/20, which, all things being equal, reduces returns on capital, and thus the income growth of the top 5%.

So the easy was is to make sure their employees like Alan Greenspan trip up Democratic adminstrations and support Republican ones.

*

jussumbody @ 4:15 is right to ask whether the graphs would look different if the top 1% (or even the top 0.1%) were represented separately.

SUPPOSE it were true that the top 0.1% (by income or by wealth, take your pick) usually do better under GOP presidents than under Democratic ones. And imagine that advertising works: imagine in other words that it can convince some people in the bottom 99% of the economic distribution to vote against their own economic ineterests. Why should anyone find the outcome paradoxical?

-- TP

Rick B provided a really good insight above, but mhr's sucked as usual. Mhr: you neglect that welfare payments to people not working is not a very minor piece of transfer, dwarfed by things like subsidies to agribusiness, the effective subsidy of paying CEOs huge amounts of money for no better work than their kind did years ago for 1/100-1/10 less, the Republican-driven subsidy to breeding like the $1,000 child tax credit etc. Almost everyone has less than they could (under say Democrat policies) for reasons of the sort enabled by Republicans than lose due to Democrat practices like classic "welfare." Not realizing that is why voters vote Republican. I just wonder, do you really not know any better, or are you a deliberate snow-jobber?

BTW, Kevin, why no comments showing at the original post on May 9, 2005?

mhr, when you get going with your speechifying and motive ascribing, I hear the fife-and-drum, like on Green Acres, when Oliver would talk about the seedlings shoosting up out of the soil.

Also, the speculations above regarding Greenspan maybe helping Bush by manipulating interest rates reminded me about giving more power to the Fed in the "reform" plan offered essentially by the Bush administration. We should be highly suspicious of any plan that puts more power into the hands of the private, secretive, heavily foreign-invested Federal Reserve, which isn't very well controlled by democratic mechanisms. Not conspiracy stuff from Alex Jones, just plain common sense and self-defense.

Rick B: they have also done research that confirms that managers who use both quantitative and qualitative data perform better than those who use only quantitative data

"Not everything that can be counted counts, and not everything that counts can be counted."

-- a sign in A. Einstein's office

I dare say that Albert wasn't afraid of quantitative thinking, but was smart enough to know that it wasn't the be all and end all.

The Fed's doing a lot to help McCain.
And if the stock markets keep rallying after today, McCain wins in a walk.

The GOP always knows how to prime the pump.

So, how come the GOP almost always has the advantage using the Fed? Don't Democratic presidents get the same opportunity to appoint Heads? Carter appointed Paul Volcker, but that couldn't get Carter reelected. Are only the Repubs are willing to use this power in a sneaky way?

McCain just asked spewing radio talk show host Hugh Hewitt to be his Press Secretary.
That's what's wrong with Kansas.

"And if the stock markets keep rallying after today, McCain wins in a walk." - mikeel

And if the stock markets keep rallying after today, I will be able to retire in 5 years at 55 as I had hoped to be able to do just around 1999.

Just gotta keep clicking those red shoes together!

Although many Americans do not consider economics a zero sum game, many others do, and they incorporate economic zero sum games into larger cultural ones with less quantifiable measurements. Character played a larger role than economics in the 2000 presidential election. Americans offended by the sexuality of President Clinton could find no redeeming character qualities in Gore. For too many Americans, Republicans had positive character attributes and Democrats did not. The occupation of Iraq played a larger role than economics in the 2006 Congressional elections. For many Americans the Democrats were the party to solve the Iraq problem and Republicans were not. As someone up thread mentioned, many Americans are happy to have larger incomes but do not want everyone else to. If everyone is better off, who will they compare themselves to know their lives have improved? They want it all. Sharing may be the best way to improve the lives of everyone, but one thing economists understand about human behavior is most individuals would rather take everything available rather than share it. Voting Republican is a way of expressing selfishness, not only economically but in every way.

Two things:

How have oil companies fared under the Dems and Repubs?

And, maybe some prefer to be rich in a country of desperate workers than to be a little more rich in a country of independent citizens.

And if the stock markets keep rallying after today, McCain wins in a walk.

According to the great sage Robert Zuccaro, the Dow will hit 30,000 some time this year. Of course, other people think the world will end in May, so it'll have to be quick.

Karl Marx's economic theories predict better overall ecnomic performace when lower classes have better than subsistance wages. And, of course, J.K. Galbraith emphasized that the growth of a huge American middle class with disposable income helped the U.S. economy shine like no other.

how come the GOP almost always has the advantage using the Fed? Don't Democratic presidents get the same opportunity to appoint Heads?

The fed isn't run by the fed chief. The chief is influential, but the Fed is run by a series of boards, staffed by bankers. It is also structured to be independent of political party, so the politics they play are personal, according to their culture. And guess which party most bank executives belong to?

While that may not be all bad in a central bank (professionalism in banking is generally more important than political views - probably), it is a very strong argument against consolidating all banking regulation into the Federal Reserve, and it also is a likely explanation for the pro-Republican interest rate manipulations during Presidential election years.

The political manipulations of the interest rate are a cultural thing in the culture that is the source of Federal Reserve board members.

I'll support the comments upthread that many of those at the high end need to feel like they have a larger slice of the pie, even if it is a smaller pie.

I'll suggest that voting is based on perceived benefits rather than real benefits. In other words, you hire a rain maker to make rain. If it rains at other times you write that off to chance. The Republicans claim to be beneficial for investors and would be investors so they get the attention of those groups. Things may go well under Democratic presidents but they don't get recognition for that.

Another aspect may be that many voters don't like the medicine that produces good economic results. Republicans have been making hay with deregulation and tax cuts, especially for the rich. However, taxes are actually investments in our infrastructure and our education system and our public health and safety. Short sighted people complain about the cost but they reap the benefit of a clean environment, healthy populace, stable currency, security from invasion, etc.

The stock market rally doesnt help McCain, he knows little about the economy and has done nothing to help said rally.

The reason for the rally is because the FED stepped in and bailed out the market, again, to save it from itself.

I'll wait until the book comes out before believing that the issue of sample size has been adequately addressed. This theory has always struck me as akin to arguments which claim the phenomena of "clutch hitting" exists, based on similarly tiny sample sizes.

I can give one part of the answer, Kevin.

People in the top end tend to get more of their income from investments, which act according to the market - and the market reacts irrationally excessively to news like what the president's position or polling is.

Therefore, when there's news they may have to share their pie, or growth will be slow - the market reacts highly negatively. When there's news of a small (unexpected, like politics) increase - the market reacts highly positively.

That's the reason for the election-year skews. Lots of psychology.

Kevin, Kevin, Kevin -

The essence of republicans is not "wanting to fare well" but rather "making sure other fare badly".

To those of you who think that wealth is all relative, I suggest you take your life savings and move to Somalia, where you'd be a relative billionaire.

The sooner we face the facts that these people are just trying to fuck us the better off we'll all be.-Gandalf

I know this is quoted from another thread, but it seems to fit even better here somehow.

The reason Democrats don't always win is because rhetoric sometimes trumps results.

Some Bible-thumping Christians have a saying: "God doesn't give you what you WANT, he gives you what you NEED."

Democrats are like God. ( :) .) They give the people--including rich people--not what they want, but what they need to become more prosperous as individuals, as communities, and as a nation.

Republicans are not like God. They give people what they want--low taxes, which is not what they need to become prosperous as individuals, etc., etc. But the rhetoric sounds good, so people fall for it.

Case in point: Bear Stearns and the credit crunch/housing meltdown. Bush and the Republicans gave Wall Street what it wanted--reduced regulation--rather than what it needed, namely, controls to keep the financiers from taking on too much risk. But what Wall Street wanted has resulted in disaster for Wall Street and, perhaps, the nation.

Will we ever learn to be satisfied with what we need, and cease lusting after what we want?

Never; until paradise is established upon earth, at which time we'll not need politicians of any party.

ferd,

And, maybe some prefer to be rich in a country of desperate workers than to be a little more rich in a country of independent citizens.

Bingo. That is indeed one of the aspects of an authoritarian personality type. They can't help it. It is innate. We need to recognize them and keep them from supporting and influencing anyone in a position of power.