"'It's the economy, stupid' was a phrase in American politics widely used during Bill Clinton's successful 1992 presidential campaign against George H.W. Bush. For a time, Bush was considered unbeatable because of foreign policy developments such as the end of the Cold War and the Persian Gulf War. The phrase, coined by Clinton campaign strategist James Carville, refers to the notion that Clinton was a better choice because Bush had not adequately addressed the economy, which had recently undergone a recession."This phrase has been running through my mind, and I understand the context, but I've never understood the economy, which makes me feel just a little stupid since it's the issue that pollsters believe matters most in the election.
To me, and I suspect to most Americans, "the economy", how it all works, how tax cuts, increases, subsidies, rebates, interest rates, new jobs, productivity, the unemployment rate, etc. all factor into how financially secure we all feel is a big black hole of voodoo. Consequently, the surface level sound bites on what each candidate plans to do don't mean much without a little education.
Last night I read an article by David Leonhardt wrote for New York Times Magazine, called How Obama Reconciles Dueling Views on Economy. It was published on August 24th and it's fourteen printed pages long, but it's the best primer I've found on the economy, the history of how recent administrations have approached and impacted it and Barack Obama's economic plan. The author discussed Obama's plan with the candidate at length and consulted with leading economists. The McCain plan is also addressed, although the author felt it didn't have a sufficient level of detail for an in-depth analysis, beyond stating that it will be a fairly similar approach to the current administration's.
"As Barack Obama prepares to accept the Democratic nomination this week, it is clear that the economic policies of the next president are going to be hugely important. Ever since Wall Street bankers were called back from their vacations last summer to deal with the convulsions in the mortgage market, the economy has been lurching from one crisis to the next. The International Monetary Fund has described the situation as “the largest financial shock since the Great Depression.” The details are too technical for most of us to understand. (They’re too technical for many bankers to understand, which is part of the problem.) But the root cause is simple enough. In some fundamental ways, the American economy has stopped working.
The fact that the economy grows — that it produces more goods and services one year than it did in the previous one — no longer ensures that most families will benefit from its growth. For the first time on record, an economic expansion seems to have ended without family income having risen substantially. Most families are still making less, after accounting for inflation, than they were in 2000. For these workers, roughly the bottom 60 percent of the income ladder, economic growth has become a theoretical concept rather than the wellspring of better medical care, a new car, a nicer house — a better life than their parents had.
Americans have still been buying such things, but they have been doing so with debt. A big chunk of that debt will never be repaid, which is the most basic explanation for the financial crisis. Even after the crisis has passed, the larger problem of income stagnation will remain. It’s hardly the economy’s only serious problem either. There is also the slow unraveling of the employer-based health-insurance system and the fact that, come 2011, the baby boomers will start to turn 65, setting off an enormous rise in the government’s Medicare and Social Security obligations.
Most of these problems aren’t immediate, which helps explain why they have gone unaddressed for so long. And the United States remains a fabulously prosperous country, relative to almost any other country, at any point in history. Yet Americans seem to realize that something has gone wrong. In recent polls, about 80 percent of respondents say the economy is in bad shape, and almost 70 percent say it’s going to get worse. Together, these answers make for the most downbeat assessment since at least the early 1980s, and underscore that the next president will be inheriting a set of domestic problems as serious as any the country has faced in a long time.
John McCain’s economic vision, as he has laid it out during the campaign, amounts to a slightly altered version of Republican orthodoxy, with tax cuts at the core. Obama, on the other hand, has more-detailed proposals but a less obvious ideology.
Well before this point on the presidential calendar, it’s usually clear where a candidate fits within the political spectrum of his party. With Obama, there is vast disagreement about just how liberal he is, especially on the economy. My favorite example came in mid-June, shortly after Obama named Jason Furman, a protégé of Robert Rubin, the centrist former Treasury secretary, as his lead economic adviser. Labor leaders recoiled, and John Sweeney, the head of the A.F.L.-C.I.O., worried aloud about “corporate influence on the Democratic Party.” Then, the following week, Kimberley Strassel, a member of The Wall Street Journal editorial board, wrote a column titled, “Farewell, New Democrats,” concluding that Obama’s economic policies amounted to the end of Clintonian centrism and a reversion to old liberal ways.
Some of the confusion stems from Obama’s own strategy of presenting himself as a postpartisan figure. A few weeks ago, I joined him on a flight from Orlando to Chicago and began our conversation by asking about his economic approach. He started to answer, but then interrupted himself. “My core economic theory is pragmatism,” he said, “figuring out what works.”
This, of course, is not the whole story. Invoking pragmatism doesn’t help the average voter much; ideology, though it often gets a bad name, matters, because it offers insight into how a candidate might actually behave as president. I have spent much of this year trying to get a handle on what is sometimes called Obamanomics and have come away thinking that Obama does have an economic ideology. It’s just not a completely familiar one. Depending on how you look at it, he is both more left-wing and more right-wing than many people realize."
You may need to subscribe to the NYT online to read the article in its entirety, but it's well sourced and it was well-received by experts who commented on it.
Since the economy is arguably the most critical issue facing all of us, I hope all of us try to become as informed about the subject as possible.
Am I alone in feeling ignorant about economics? Please tell me I'm not!
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I've resigned myself to including posts about the election and the issues on this formerly apolitical blog, but my intent is to share information I believe is worthy of discussion, not to preach to the unconverted.
This week, the sum total of writing I managed to get done was only about 700 words, and I didn't read (for pleasure) nearly as much as I usually do. Finding a way to refocus on my writing is proving to be newly difficult. I had almost found a way to divorce myself periodically from the internet, but ever since the conventions, I have been sucked into the vortex of election news.
How many of you are in this quandry? As important as my writing is to me, I almost feel self-indulgent when I abandon research on where the candidates stand on human rights, health care or foreign policy in order to sink back into my own world. How does my obligation as a citizen to be an informed voter weigh against my obligation to myself not to lose momentum on my novel?