How do we destroy the myth that politicians control the economy?

Politics & Elections
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Last night, which showed (not surprisingly) that the economy was first or second on people’s lists of concerns, triggered this post.

I know, I know, economics make most people’s eyes glaze over. But politicians, especially the president, impact the economy mainly at the margins. Sure, it’s critical to select a good Fed Chairperson. Tax policy is likewise important, as is monetary policy. And stimulus packages may be necessary if the economy drives into a ditch. A truly idiotic president can tank the economy through tariffs.

But beyond that, the best a president can hope for is to blunt the severity of inevitable economic downturns (Harris’s proposals were filled with such proposals). For the most part, the business cycle is going to do what the business cycle does. Busts follow booms, ad infinitum.

There are 33 million small businesses in the U.S, countless larger corporations, and mega-corporations, all in a Byzantine web of supply chains, business relationships and local regulations—that inextricably intertwined with a global economy with similar players and complexities. No one completely understands it, and certainly no one controls it. Certain impacts are predictable—e.g., supply chain shocks following a pandemic that lead to inflation. There’s no magical incantation the president can recite to prevent this.

And yet, people still blame the president for the price of eggs.

Two important factors here (IMO). One, people are stupid—possessing the critical thinking skills of toddlers, reducing complex situations to emotional reactions, intellectually incurious. Two, as surely as a candidate says, “Listen guys, I can’t make the business cycle do what I’d prefer,” the other guy will promise economic prosperity. Combine these two, and you help get last night’s results.

So, I’m not hopeful, but is there any way, any messaging, that can make this myth evaporate, so that the electorate—the majority of whom will still be dopes—doesn’t make its voting decisions based on nonsense?

Anyone who feels compelled to point out that people will believe what their gut tells them, facts be damned, can refrain. My very question acknowledges that. The question is, can this be changed with regard to the belief regarding the president’s control of the economy?

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A post was merged into an existing topic: Everlong88 Cornfielded Posts

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Perception is reality

Democrats missed the narrative.

They should have blamed Trump’s handling of Covid that triggered and prolonged the inflationary period.

They should have pointed out that the Trump tarrifs were a huge component of the inflationary period, and he wants to do more.

The lost the Senate and couldn’t gain control of the House.

I expect some nonsense horseshit like consitutional amendment to lift the term limits for POTUS!!

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This.

Plus pointing out what happens to the US economy if China takes over Taiwan, as is liable to happen if we let Russia take Ukraine.

G’bye cellphone.

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This turned into a wallet election. People talk about the economy, but they really mean their spending. If they can find jobs and pay their bills without stress, times are good. In the past four years bills meant stress, from the price of groceries to the price of housing to the price of schooling. (Gas prices actually fell but that stopped making news.)

In a wallet election, nobody cares if the stock market is going up. No rational economic arguments work. Promises do. Cut taxes. Cut spending. Bring back jobs. Eliminate job competition.

Politicians can do some of these things, although their real-world effects might diverge from the rosy scenarios that people create in their minds. As long as enough of them watch and listen to media that shouts the undoubted success of the promises, there’s no reason for minds to change.

We’re not going to get honest politicians. We should hope for honest media.

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I do agree with this. I don’t recall a single journalist or analyst this election ever push back on the idea that presidents are wizards who conjure up the mojo that gooses the economy. Candidates may disabuse people of this notion at their own peril. Journalists and analysts have no excuse.

That doesn’t guarantee they’d convince a single soul. But it would be nice to hear it once in a while. I guess that’s the essence of my question. Is there any messaging that could chip away at the credulous embrace of politicians’ bullshit promises of prosperity?

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In a world where people still believe in Bigfoot and UFOs, you can’t.

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But they do control the economy…just not on a granular level.

As has been mentioned there are all sorts of things the government can do. Taxes and tariffs and subsidies and bailouts and corporate welfare and interest rates and so on.

They can’t set the price of eggs but they can affect the input costs to make an egg and getting it to market.

We know companies used the cover of COVID and general inflationary pressure to raise prices well outside of what market forces were mandating. Government did nothing but tut tut over it.

Companies are consolidating like crazy but there is no effort at antitrust efforts to stop that. Fewer companies, less competition, higher prices.

The government is far from helpless when it comes to inflation.

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Generally, the impact of the government on the economy is overblown or, more commonly, the impact comes too far down the road for it to be correctly associated by the average person to the actions taken by the government.

But, for example, imagine nuclear winter. Within a day or two, the economy isn’t just down - it’s just plain ol’ gone.

A wise government’s impact on the economy is subtle, nuanced, and is liable to make the current president gain the glow (or, in the case of Trump and tariffs, the black miasma) that was generated by his predecessor. A sufficiently stupid one’s impact could be anything from non-existent to immediately disastrous.

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They can and should prosecute price gouging—and predatory pricing, monopolies, insider trading, etc. I’m not at all suggesting the government has zero influence. And as I said in the OP, Harris had several proposals that were reasonable reactions to economic pain.

But none of this will eliminate inflation. It may blunt the severity of it, but the business cycle will do what it does, and there’s fuckall anyone can do about it, except at the margins. And, yes, as I pointed out, an idiotic leader can tank the economy, for example with massive tariffs. But none of them can stand in front of the tide of the business cycle and stop it. They just can’t. But they all promise they will.

Yeah, gas prices were lower under Trump. And he didn’t have a fucking thing to do with it.

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Even if the Federal government as a collective entity made up of the three branches and all the Federal agencies has a lot of ways that it can nudge the economy, it’s not something the President has all that much power to do (at least historically; who knows going forward).

And @Stratocaster is right that the economy is basically something akin to an emergent property or behavior caused by the aggregate of millions of little business transactions. Governments can only do so much to directly affect that, and often what they can do comes with consequences that people don’t like.

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Fortunately there’s no way they would get 2/3s of both the House and Senate to approve that. Plus 75% of states need to ratify, 40% of state houses are controlled by Ds.

That’s not to say that any number of Trump ass-kissers won’t introduce an amendment every week or so.

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The presidency is the power of the bully pulpit. E.G. The president could ask business to pull it back some or they will get the DOJ trust busters fired up. Or propose some new taxes. Or propose some new regulations. Or promise some new subsidy or tax break. Etc.

It is weird to think the president and the government overall has only a minimal effect on the economy. They set the policies the economy operates under and while that is not direct control it is control.

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OK, now how exactly do they affect an avian flu that devastated layers and is, almost certainly, the actual reason for egg prices.
And one might want to look up egg prices and be surprised to learn that egg prices have been remarkable stable for nearly half a century.

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It was meant to be a generic example. Make it widgets or gizmos if it helps.

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Again, no one would suggest the government has zero influence on the economy.

But whatever they do, whatever new rules or oversight they impose, the business cycle will chug along within that new-and-improved context the way it always has—busts following booms following busts, etc., ad infinitum. If the government could make it go the way they’d prefer, via tax or monetary policy, via more or less regs, via magical incantations, they would.

They can’t.

They consistently overpromise on the campaign trail. They can help with economic pain. They can smooth the contours of the free market. They can blunt the severity of downturns to some extent. But the economy is an indecipherable matrix of billions of entities and trillions of transactions, all with direct and indirect effects that ripple outward. “I can make it right!” is a lie, whoever says it.

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Well, there are measurable things, like the results of yestereday’s election boosting the Dow Jones index +1500 points, for no particular reason at all, other than who will be president. That sort of thing.

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Agreed with your point. Russia taking Ukraine, plus Latvia, Estonia, Lithuania and possibly Moldova if they want are pretty much a given at this point.

But I think Trump and the GOP will at least squawk about Taiwan if China moves on it. Probably not engage militarily but at least pitch a hissy fit.

None of this will be good for our economy.

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I think we agree overall.

The government can make a difference (a big one) but it is a slooooow process. Like driving an oil tanker. You can turn the wheel but it takes a long time for the ship to respond and fine control is basically impossible.

Government policy can certainly have profound economic effects but it takes months or even years to trickle through. They can’t change the price of a widget on the shelf on a day-to-day basis.

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Latvia, Estonia, and Lithuania are all members of NATO. I know Trump hates NATO and perhaps would junk the NATO treaty for them, but the other European nations would rather allow cheap grape juice to be called Champagne than not defend member nations.