Jewish World Review August 22, 2002 / 14 Elul, 5762
http://www.NewsAndOpinion.com | What will be the political impact of the sluggish economy on the 2002 elections? None.
As Bush polishes his economic image and Democrats lie in weight to hang the blame for rising unemployment around his neck, both parties are confusing the elections of 1992 with those of 2002.
In 1992, the economy was the key issue in Bush's defeat. (Although, even then, it was more Perot's role in siphoning off 19% of the vote that likely crippled the incumbent Republican). But we have learned a lot, as a nation, since then.
In the past ten yeas, politics and economics have gotten divorced from one another. Voters have come to understand that the basic economic decisions in Washington are made by Alan Greenspan not by George W. Bush. Throughout the world, it is global bankers, economists, and bureaucrats who set the economic framework for the markets, not presidents, prime ministers, or chancellors. Economics, for one hundred years the decisive factor in whether politicians live or die, has lost its hold on the political process.
Why did Al Gore lose despite a good economy? Why is Bush popular despite a bad one? Because its not the economy, stupid. Its social or security issues like education, health care, environment, immigration, crime - and now, of course, terrorism -- which control electoral outcomes.
Voters never gave Clinton much credit for a good economy. His political strength came from his ability to blunt the GOP offensives on crime, welfare and fiscal discipline while opening up large leads on the traditionally Democratic issues of education, environment, Medicare, and Social Security. Clinton's ability to occupy the White Hosue while the private sector created jobs always seemed more coincidental than causal to the typical American voter.
Even now, the trends in closely watched Senate races around the country reflect the absence of economic issues driving voters. Republicans are poised to defeat incumbent Democrats in Missouri (because Jean Carnahan is totally without qualifications), Minnesota (because Wellstone is too liberal), and New Jersey (because Toricelli is a crook). Democrats are leading incumbent Republicans in New Hampshire (because Smith briefly left the GOP in 2000) and in Arkansas (because Hutchison divorced his wife of 29 years to marry his young staffer). Nowhere is the economy dominating the dialogue.
Abroad the political impotence of economic issues is even more clear. Five years ago, thirteen of the fifteen European Union nations had left leaning governments dedicated to reducing income inequality and creating jobs. Now, in eight of these nations, center-right parties have taken their place, winning on platforms far more focused on crime, education, health care, and immigration than on economic issues. In France, the Socialist, Lionel Jospin, didn't even make the runoff with his message of reducing the income gap between the rich and the poor. Instead, two rightists, Chirac and Le Pen fought in the runoff over the issues of crime and immigration.
The issue of corporate responsibility, on the other hand, has a great deal of political relevance. How the SEC regulates publicly held companies, what Congress does to eliminate conflicts of interest in the accounting industry, and how the Justice Department enforces laws against corporate fraud are all important political issues, likely to carry great weight in the 2002 elections.
But the ups and downs of the business cycle are about as politically important as those of the thermometer. Indeed, with global climate change so obviously causing disturbing storms, droughts, fires, and such, weather might be a politically more actionable issue than the economy.
There is some question about whether anybody in or out of government really controls the economy. We like to think that central banks have a decisive effect with their interest rate and money supply adjustments, but the evidence, in Japan for example, is less than convincing. There, miniscule interest rates have had no impact on a decade long recession.
But voters clearly understand that elected officials throughout the world
have little impact over the business cycle.
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08/09/02: As America unites, Gore goes divisive