Why Is That?
It is one of the things that you can see in the record if you look back, but it doesn’t really make any logical sense. Paul Krugman has been discussing this for some time and his latest installment is Bartels bash.
What is under discussion is the fact that the market does better and the income gap between rich and poor narrows under Democratic Presidents, but there is no real reason why it should. Presidents don’t obviously have a lot of power over the economy in general, but the data says this happens.
I’ve known for a long time that the stock market does better under Democratic Presidents, but that’s counterintuitive. The market insiders support Republicans, which the numbers say is betting against themselves. The statistics say there has to be a reason, but no one can find the link.
It is of note that the party of Congress doesn’t seem to make any difference, only the party of the President.
19 comments
Republicans let the market insiders get away with more?
That may be true, but they make a hell of a lot more money in a bull market, and that only explains their voting preference, not why the economy acts like it does.
i think michael’s onto something. once you have as much money as the robber barons do, i suspect it’s the heady atmosphere of fewer regulations and greater income inequality that adds a certain extra spice that –yawn– mere dollar signs cannot.
I don’t doubt that income inequality is behind the political choice of the individuals, but the real question is why this difference in the economy occurs. The numbers says there’s a correlation, but what can a President do that makes a difference and produces the results – that’s what we don’t know?
embroidering my guess a bit: presidents appoint cabinet members, and those appointed by republicans play fast and loose with the rules. those businessmen who would be regulated [more or less] by republican regulators thrive [emotionally, because they are at heart predators] in the wild west environment. they don’t make as much as money in total as they would if let those lower down the food chain prosper too [the more money the lower classes have, the more they can spend on stuff the higher classes want to sell them], but the competition amongst themselves, and the feeling of superiority over the hoi polloi, are too rewarding for the robber barons to see past that.
an imperfect analogy: wolves in zoos are probably safer, healthier, and longer-lived than their cousins in the wild, but if you gave the wolves in zoos their druthers, i bet most of them would rather live like their wild cousins.
That certainly has to be part of it. It has to be regulation, because that is something that Presidents do control, as you point out.
as did michael. i just extended it to the rest of the government. epa, fda, fema, some others leap to mind when you consider this administration.
I think the SEC, FTC, IRS, Treasury, and Commerce would be the really important ones on the regulatory front.
true. but i’m a treehugger, and i’d like for my food and medicines to not kill me, not to mention the possibility that this place could be strewn with furry little dead bodies if there’s another pet food fiasco, so you file those under the aforementioned some others, i suppose.
I tend to concentrate on the financial side trying to figure out what’s going on to produce these results, because I’m looking at the money movement and markets on a mass scale.
On the social and human side, I think publicly hanging a few CEOs would probably improve safety regulations immensely, although I would probably settle for a few “criminally negligent homicide” convictions.
It has always baffled me that if I go out and give someone poisoned food and the person dies, I would be charged with at the least manslaughter (depending upon whether it can be proven that I deliberately poisoned the food), but if a multi-billion-dollar corporation poisons thousands of people, nothing ever happens other than a fine. If CEO’s are getting $6 million dollar paychecks, they should also get the subpoena for the manslaughter charge if their food ends up killing someone. I mean, what *else* are they getting those big bucks for?
As for the notion “a boss should not be responsible for what his subordinates did”, bull fuckin’ shit. It’s called “command responsibility”. But oh, I keep forgetting, “responsibility” is a dirty word when you’re talking Rethuglicans…
The idea of corporations as persons with rights at all is ridiculous. Corporations cannot be imprisoned, they cannot bleed, they cannot feel pain, they never die. They can make unlimited profits and limit their liability. Truly, how could an ordinary human being compete?
We prosecute the heads of crime families, so why not the CEO? The top-down structure is the same. The capo rarely directly orders a hit, but you can still prosecute them. Charge corporate malfeasance under the RICO laws and start sending people to prison. The CEO is the individual that profits the most from the “corner cutting” that results in these deaths, so they are responsible.
Michael, you’ll get no argument from me on corporations. I had to compete against them, and the “playing field” was definitely not level. I had to have bonds when they didn’t; I had to meet payment schedules when they didn’t; I had to provide all kinds of evidence of capabilities that were not required of corporations. Hell, in many states, no matter how badly they screw up, a court isn’t allowed to force them into bankruptcy. Corporations have no place in capitalism.
those examples were the ones that leaped to mind [solely because of my own biases] as illustrations of just how easily a president’s actions, without any help from congress or the supreme court, can subvert the mission of a regulatory agency. i didn’t really mean to imply that subverting those particular agencies is necessarily responsible for the phenomenon that krugman was talking about.
I realized that, Hipparchia, but wanted to expand on my thoughts. Regulations and executive orders can affect a lot of things, but trying to figure out how they affect the economy isn’t easy to figure out, unless it is simply the psychology of feeling that things are getting better which overtakes the consumers.
Hipparchia made the point before, income inequality is what the rich benefit from more than anything else. If two people have comparable incomes, neither can hire the other.
Actually, Micheal, it is the norm in many small businesses for the owners to make the same or less money than their employees. The business may generate the income, but the average small business owner doesn’t take more from the business than is necessary, using the excess for expanding the business.
During the start-up phase, most owners are living on their savings, not on any income from their business. This is one of the reasons true capitalists hate the corporate model and the CEO pay structure – the management isn’t willing to “bet” its salary on its decisions.
Bryan, small business is irrelevant to my point. We’re talking about people who can buy and sell you a hundred times before breakfast, and disparity of wealth is the measure of that.
Leaving aside the point that I have never been for sale, basically because money doesn’t interest me all that much, the problem is how the President can affect the overall economy. Regulation has to be key, so what regulations and by what agencies?
My interest is in systems, concepts, and ideas. Money can be a useful tool, but its accumulation is a pointless goal. The real question is what you do if you accumulate it, otherwise, you are no different than a dog chasing cars, i.e. a pursuit without a reason.