Bartels revisited

In the blogospheric discussion of Larry Bartels' argument about the partisan political dimensions of economic inequality, Alex Tabarrok makes some interesting but problematic points. First, he points out that political economists have long been aware of the phenomenon Bartels analyzes, only they call it partisan business cycle theory.

I'm not familiar with the PBC literature but it would be interesting to take a look at it and see how it relates to Bartels' thesis. To what extent does the PBC literature look at distributional effects?  The tables in Tabarrok's post don't; they just look at GDP growth. I assume, though, that macro policies that are more concerned with reducing unemployment, such as the Dems' tend to be, would be better for economic equality, since lower unemployment would (in theory anyway) put workers in a better bargaining position and thus drive up wages.

Tabarrok also points out that "when we consider Presidents there aren't many data points." This is undoubtedly true. I meant to mention this before in the context of this debate, but I've often said that a problem with making causal inferences from presidential elections or presidential administrations is the small n problem. The sample size is limited enough that variables that you may believe are causal may not be, and the results may instead merely be the result of chance. And this is particularly true when you  restrict your sample to, say, post-World War II presidents.

Tabarrok concludes that the reason the PBC impacts inequality is "sticky wages and the business cycle and not some nefarious story about taxes, oligarchies and political conspiracies." Now that is a cheap shot, and unworthy of him. It may well be the case that the business cycle is driving the result, but the other factors Bartels mentioned -- such as tax policy, social spending, business regulation, and the minimum wage -- are not "conspiracies." They are public policies which have a distributional impact.

Progressive taxation, workplace regulations, the minimum wage, etc., all tend to benefit employees at the expense of employers, and the poor at the expense of the rich. Republicans tend to fight those policies tooth and nail, because business interests and the rich, which strongly oppose them, are a powerful part of the Republican constituency. There's nothing conspiratorial about it -- all it amounts to is certain groups organizing politically to protect their self-interest.

Finally, in my post from the other day I referenced Tyler Cowen's argument that the macro policies that Democrats favor may be better for economic equality, but  they also drive up inflation, which is bad for the poor in the long run. However, commenter Tom Geraghty pointed out that "inflation hasn't been any higher Democrats than Republicans."

Comments

[Alex Tabarrok]

It's good to know that I have finally found the G spot!

Do note that oligarchies and (vast right wing) conspiracies are how much of the left explains the changing wealth distribution. Paul Krugman, for example, calls it the Republican oligarchy and he has often talked of how Republicans misdirect, misinform, and disenfranchise in order to increase the wealth of the rich. Thus my comment.

To be clear, I think Bartels is a fine political economist, I've been an admirer of his work for some time, and I'm looking forward to reading his book.

[Noni Mausa]

"...The sample size [of presidents] is limited enough that ... the results may instead merely be the result of chance. And this is particularly true when you restrict your sample to, say, post-World War II presidents...."

Not so.

"cactus", over at the Angry Bear blog, has been tracking presidential performance since Ike (or more strictly, what economic things happen during each president's reign). Despite the apparent paucity of data points, the overall picture is remarkably consistent in all areas he studied. There are lots of charts.

He has written a book, and it is approaching publication. http://www.presidentialperformance.com/