Thursday, July 14, 2011

Politics of Default for the Cynical

. Thursday, July 14, 2011

John Sides Joshua Tucker has a post on whether political science literature would/could predict that the Republicans would intentionally sabotage the economy in order to increase the chances that Obama loses the 2012 election. It's a fine discussion, but I'd like to add a few things related to the whole idea of economic voting, while acknowledging that this is not my area of expertise so it could all be wrong.

1. There's a fundamental assumption embedded in the economic voting literature that representatives are trying to manage the economy well, or at least well enough. When one party fails at that task, voters give another party a turn. In a situation in which the opposite is happening -- in which one party is openly trying to destroy the economy while the other is trying to save it -- the economic voting literature gives no reason to expect voters to reward the saboteurs. It violates the most core assumption of the basic model, which is that voters reward good governance (or at least good outcomes that are attributed to good governance). Tucker kind of gets at this in his last paragraph, but fails to drive home the point.

2. This may depend on how obvious the sabotage strategy is, and the particular frames voters use to interpret it. In this case I think it's pretty obvious. If Congress doesn't raise the debt limit, and the economy collapses, it'll be hard for Republicans to run and hide. McConnell's quote that his #1 task was to defeat Obama in 2012 rather than govern well will be in every Democratic advert. Cantor's short position on US debt will be shouted from the rooftops, and possibly investigated. Limbaugh's quote that he hopes Obama fails would be oft-repeated. Obama can say "I wanted to keep the Social Security checks flowing, I wanted to to not blow up the financial system and increase the costs of servicing our debt, but the GOP Congress wouldn't pass a bill allowing me to do it."

3. As Tucker says, many interest groups in the GOP camp are opposed to a shutdown/default. If the Chamber of Commerce and American Bankers Association as well as every economist in the world tell the GOP leadership that default is a bad idea, and the GOP goes against them anyway, well then that could be explosive.

4. This is where the McConnell gambit comes in. The GOP may decide that kicking the can down the road, with plausible deniability ("we voted against it!"), might be their best strategy. Obama opposes this strategy. Neither Obama nor the GOP is acting like a shutdown/default -- as opposed to signaling and theater -- is in the best interests of the GOP.

5. Tucker cites the Clinton shutdown in 1995 as Tucker's co-blogger John Sides has done before, but I think a few things need to be said about that. For one thing, the economy is in a very different place. For another, while Sides has presented evidence that the shutdown didn't benefit Clinton (see the graph at the link) what I see from that time series is a relatively minor downtick in Clinton's approval that quickly reversed after the shutdown ended, after which his approval continued to grow leading up to the election. To the extent that the Republicans are less concerned about Obama's approval in August, 2011 than November, 2012, Sides' previous analysis doesn't tell us all that much. In 1996 Clinton won re-election easily, while the House GOP lost some seats. That isn't proof of anything, but while the shutdown might not have helped Clinton it doesn't seem to have hurt him either. It certainly doesn't seem to have helped Gingrich or Dole.

Update: I got posts by Tucker and Sides confused. I think they're straightened out now.


Politics of Default for the Cynical




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