Getting the Politics In Politics Right

Alec MacGillis has a long piece in the Washington Post defending the politicization of public policy; or at least the idea that it’s appropriate to consider the electoral and political consequences of policy decisions. And while I think he’s right, one point that’s often lost when we talk about this stuff is figuring out which policy questions actually matter the most politically.

No one doubts that a more robust economic recovery would have helped Obama and the Democrats substantially in 2010 and would help them in 2012. And yet, from accounts of policymaking in the Obama administration, we learn that the decision to start talking about the long-term deficit was not entirely made by the economists in the administration. Although Peter Orszag, the now-departed OMB chair, was a true-blue deficit hawk, it was the political team that, in early 2010, wanted to pivot towards austerity. Ryan Lizza’s January New Yorker piece describes their thinking:

After a year of intense policymaking and legislating, Obama’s political advisers were attempting to reassert authority over the economic team. The recommendations were heavy on public relations and attempted to reposition Obama to appear less hostile to the concerns of the anti-government right. “Democratic Presidents rarely address small businesses in their message,” they advised Obama, “but you could use the opportunity to discuss what small businesses mean for the freedom to be your own boss, to pursue your own ideas and for our spirit of innovation.”

Axelrod and other Obama political advisers saw anti-Keynesian rhetoric as a political
necessity. They believed it was better to channel the anti-government winds than to fight them.

Obama’s State of the Union speech, his aides said, “was an opportune moment to pivot to themes of restraining government spending.” They advised him to consider “freezing or cutting the discretionary budget,” instituting a senior-level government pay freeze, and cancelling some federal programs. They even noted that his government-reform efforts were “the most dramatic since Reagan’s conservative downsizing.”

So here we have political advisers who are concerned with the political consequences of what the president decides to emphasize and propose. What they got wrong, it seems, it not so much that it’s important to consider the political consequences of an administration’s policy actions, but misunderstanding what drives the president’s political standing. As we’re seeing now, and as we already know, whether or not the macroeconomy and the labor market are perceived as improving has a huge bearing on a president and incumbent popularity and ability to win elections. Not only is effective recovery and stabilization policy clearly the “right” thing to do, it’s also the thing to do even if you’re only concerned with maintaining your standing in the polls and winning reelection.

The best way for the administration to have gotten the politics right, it seems, would have been to listen to their economists. Or at least Christina Romer.