Jim Stimson, UNC prof and political science legend, has made his name by showing (with his co-authors) that the state of the economy predicts election outcomes with alarming accuracy. It seems too simple to be true: incumbents do well when the economy does well, and challengers do well when the economy does poorly. All the horse-race stuff that newspaper and cable tv fill space with is mostly ephemeral. Nevertheless, this single economic variable seems to explain quite a lot of democratic politics. According to Stimson, in other words, political outcomes are best explained by economic outcomes.
The recent lengthy New Yorker profile of Paul Krugman has illustrated something interesting. He thinks the opposite:
In writing his first popular book, “The Age of Diminished Expectations,” he became preoccupied by the way that inequality had vastly increased in the Reagan years. (Interestingly for an economist, Krugman believes that the political often determines the economic, rather than the other way around; he believes that the increase in inequality in the U.S. since the sixties is a product less of economic factors—the development of technology, say, leading to the greater importance of skills and education—than of political decisions about taxation and unions.
On the surface the two are not mutually exclusive; an economy could grow in aggregate even if the gains mostly accrue to the top of the income distribution. Depending on how you read the data, this seems to be exactly what has happened in the U.S. But Stimson's story is about political attitudes and behavior. If people do not view their economic station as improving, then they should vote against the incumbent party. This doesn't track Krugman's logic at all, since he views economic changes in the past 25 years as being more and more skewed against the median voter.
I've got no particular dog in this fight, although I think Stimson is right, but I just find it interesting that a revered political scientist views economic variables as the most important determinants of politics while a revered economist views political variables as the most important determinants of economics.
I'd love to get the two of them in the same room and see what comes out.