Could the jobs problem be a function of businesspeople who fear massive new regulations because Barack Obama is president? Because, after all, even if there aren’t massive new regulations or a real threat of them, conservative alarmists convince the sorts of people who make hiring decisions in private business that those new regulations are just around the corner?
The latter from Will Wilkinson, who I think of as a fairly sensible libertarian, and it’s plausible — plausible enough that Kevin Drum doesn’t rule it out.The only problem? Hey, we all know Steve Benen’s job charts, and it’s really hard to see the “scary Democrats” effect. It’s worth also pointing out that the last two times that the White House shifted from Democrats to Republicans a recession struck in the very first year, which isn’t exactly consistent with Wilkinson’s theory. To get more big-picture, the general but contested scholarly view is that the economy has grown better under Democratic presidents, with the dissenting view, if I’m understanding it correctly (and I’m very much not an expert on this literature) looking better for Republicans because it ascribes the first year of presidencies to the previous administration — a view which is not consistent with Republican managers and small business owners all freaking out every time a Democrat is elected.
Now, we live in a multivariate world, and as I said I’m not really well enough versed in the literature to know whether jobs in particular, as opposed to economic growth in general, has the same effects. Still, while I agree that the theory isn’t nuts on the surface, I’m going to say that readily-available evidence (you know, the last 18 years) speaks strongly to the idea that there’s no such significant effect. Very strongly. Strongly enough that Wilkinson (and Drum) should have realized there can’t be much, if anything, there.
What’s really going on? People are absolutely terrible at self-diagnosing the reasons for their own actions. Here’s my guess: it is actually very likely that the medium-sized business owner whose anecdotal evidence started all this truly believes that he’s hesitating to hire because he’s afraid of a massive increase in taxes or regulations next year, but in fact what’s really going on is that every time he things the economy is improving, it levels off. In other words, if demand for his product was actually very strong, he’d be moving ahead despite his Fox-induced fears; since it isn’t, he’s hesitating, and blaming it on those fears. No, I can’t prove it, but I’d bet that’s what’s happening.
[Cross-posted at A plain blog about politics]