I noticed a link by Tyler Cowen:
A few days ago Paul Krugman argued (Times Select, or here is a Mark Thoma summary) that it matters a great deal which political party rules in the United States. Republicans tend to bring gilded ages, Democrats tend to bring greater income equality.
Cowen gives some discussion and links to other comments by Andrew Samwick, Greg Mankiw, and Matthew Yglesias, along with this overview by Brad DeLong.
Anyway, I think all these people should take a look at Larry Bartels’s recent paper on income, voting, and the economy. Here’s Larry’s graph:
I won’t repeat my summary of Larry’s paper here and my further comments here except to say that, yes, sample size issues are a concern but Larry has a coherent and interesting story. Definitely worth looking at if you’re interested in the topic, whatever your political perspective.
Didn't Paul Krugman argue in that same article that Clinton shouldn't be counted as Democrat for the purposes of looking at income inequality because he governed too centrist or center-right?
There are lots of ways to explain Larry Bartel's results. One way is to say that (recently) middle-class voters have been more likely to favor redistribution when times are good but lower taxes on capital (in favor of growth) when times are bad. Larry threw out year one of the presidencies– but it looks like he only credited presidents with years two through four, and noted that Democrats have a better 2-3 but a worse 4, whereas Republicans have a worse 2-3 but a better 4. What happens if the next President's year 1 is included in the previous President's tally?
Also, many of these things are leading indicators. I don't really agree with your economic analysis. It's entirely possible that focusing on inflation hurts short-term results while helping the economy in the long run, and redistribution provides an immediate short-term boost but hurts the economy in the long term. It's also possible that (middle class, net taxpaying) voters are more likely to favor redistribution when times are good, but favor tax cuts when times are bad, and that it's really that Democrats and Republicans are *elected* at different points in the business cycle.
John,
I agree that Larry does not have an open-and-shut case, and that with this sample size, an open-and-shut case is not possible. I do think he has a coherent story, however (along with some data analysis), and so I thought his article would be a good starting point for people who are reacting to Krugman's op-ed.
Regarding the business cycle hypothesis, Larry did discuss this point, and he tried to address it by comparing first-term to second-term presidents. Sample size is even smaller here, of course, but again, he did think about some of these issues.
oh…. groan, when will we learn!!!
Statistical tables need many more than three legs to stand up, and just one simply isn't enough. Has anybody looked at the change over time??? It's not that I'd doubt that income swings and political swings have some alignment, but the story is about the unprecedented structural shift in the economy that occurred around 1970, with wealth continuing to grow at a clip and incomes stagnating. What you have is clear evidence of a long standing system of balances coming completely unglued. Yes, it's happening on the republican watch, you might say, but more with the reverse cause and effect it clearly seems to me. Think about the power relationships that change when wealth triples and incomes are frozen.
I'd be happy to offer anyone a well worked out discussion on the missing physics of growth.
Phil,
I understand your skepticism, but with historical data, we have to do what we can. I recommend you take a look at Larry Bartels's paper; there's a lot more to it than just that one graph.