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Economic policy affects the economy

By Dylan Matthews

Though I'm glad to see the president of the United States acknowledging that elections are primarily driven by economic factors, it's weird that he thinks this constitutes a defense of his administration:

President Obama said in an interview broadcast Sunday night that he views last week’s mid-term Congressional elections as “a referendum on the economy” rather than a referendum on him, his policies or the Democratic Party.

While he said he should be held accountable for the economy as the nation’s leader, he did not accept the suggestion that he pursued the wrong agenda over the last two years, and he focused blame on his failure to build public support for what he was doing or to change the way Washington works.

This is borderline incoherent. The reason the president should be held accountable for the economy is because his policies influence it. Calling the election a referendum on the economy but not his policies only makes sense if the two have nothing to do with each other.

Now, it's possible that nothing Obama could have done would have put unemployment in a place where voters would be satisfied. Kevin Drum made a convincing case a few weeks back that even a much bigger stimulus would not have cut unemployment by enough to make any electoral difference, and financial-crisis-induced recessions usually have slow recoveries. But insofar as some action of Obama's – like proposing a bigger stimulus, or not renominating Ben Bernanke as Fed chair – could have reduced unemployment further and in turn limited Democratic losses, the extra losses created by not taking that action are a result of his policies.

Dylan Matthews is a student at Harvard and a researcher at The Washington Post.

By Dylan Matthews  | November 8, 2010; 9:50 AM ET
Categories:  Barack Obama  
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Comments

I believe the point is this - Presidential actions do affect the economy, but the effects are not immediate. Insofar as the economy today is the result of Presidential action, it is the result of past Presidential action (not current).

Posted by: Levijohn | November 8, 2010 9:56 AM | Report abuse

Proposing a bigger stimulus would have done nothing unless a bigger stimulus would have been enacted, and the evidence clearly indicates that it would not have been.

Bernanke is one of several members of the FOMC, and it seems at this point that his actions are being constrained by the other members of the committee. Appointing someone less worried about inflation might have alienated even more members of the committee.

Posted by: JonShields1 | November 8, 2010 10:46 AM | Report abuse

While I agree that "nothing Obama could have done would have put unemployment in a place where voters would be satisfied" it's equally true that there are things the Obama/Pelosi Regime did that took money away from voters at a sensitive time. For example, due to new requirements of the Obama/Pelosi PPACA, just over 60 million voters received notices of increased health insurance premiums on the Saturday before the election [which was one month after the initial implementation of the PPACA]. The Regime could have at least better timed its activities.

I'd be curious about the interpretation of the result of VA-9. Obama had visited the SW VA area frequently, the incumbent was a long-time member of the House (its 23rd longest-serving member), had voted against the PPACA, was relatively moderate, was certainly not a firebrand, and the race wasn't even considered competitive... yet the incumbent Democrat lost (to an opponent who doesn't even reside in the VA-9 district). What does this mean? Was it simply a rejection of the prevailing Democrat brand?

Posted by: rmgregory | November 8, 2010 11:37 AM | Report abuse

I agree with Matthews. Look how long it took to get in this mess. And there will have to be more drastic actions to get us out; however, it is not going to happen over night. It's going to take time to see the results of President Obama's actions, and see whether or not they took effect.

Posted by: chellebrough_05 | November 8, 2010 12:26 PM | Report abuse

It's time to face reality. Neither President started, engaged, or joined the economic problem. What we need to do is look into the mirror and look at the likely culprit. S/He is in there.

Greed and gluttony were the cause. Yes there were politics involved, but I don't recall the President, the politicians, or anyone holding a gun to our heads to force citizens into overspending, over-pricing, and in many cases price-gouging our neighbors. It continues today in the midst of the recession.

At some point we need to hold meetings much like AA and get on with life. We need to assess where we are and where we are going. Looking behind only leads us to source of the stink. We need to put one foot in front of the other, and move ahead.

We need a serious financial diet prescribed and that is not addressed by either business, government, or the citizens.

Posted by: jbeeler | November 9, 2010 10:15 AM | Report abuse

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