Re: Let's discuss which variables are important. Here's a partial list. -- SPEAK UP

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Date Posted: 14:09:39 10/31/02 Thu
Author: Kafka
Author Host/IP: gatekeeper.ngrid.com / 192.146.145.219
Subject: Re: Let's discuss which variables are important. Here's a partial list.
In reply to: Richard 's message, "Let's discuss which variables are important. Here's a partial list." on 13:34:48 10/31/02 Thu

>But I think it would be better to look at who controlled
>the Congress as well.

True. However, I avoided that for a couple reasons.

First is that I honestly believe that the executive is more important in practice (though certainly not in theory) than the legislative. Since Congress is almost always divided ROUGHLY 50/50 (that is, closer to 50/50 than to a veto-proof, fillibuster-proof majority by one party or the other), it often cancels itself out. Meanwhile, the executive gets control over all the agencies, most aspects of foreign and military policy, and judicial appointments. The executive can respond MUCH more quickly than Congress, with its executive actions, and is often the only game in town, if Congress is in gridlock. Especially with Congress having shifted much of its potential power to regulatory agencies (which respond to the administration's pressures), we now have a very strong presidency.

For example, just compare the mid-to-late 1990s to the 1980s. If you look to the legislature, the 90s were a conservative time while the 80s were liberal. However, look to actual policies: in the 90s, we had the biggest single-year hike in the minimum wage in history, and defense spending that slid substantially (especially as a share of GDP). We also had no meaningful tax cuts, a fair amount of environmental action, and a mild resurrgence in union power. In the 80s we had a stagnant minimum wage, rapidly climbing defense spending, and monumental tax cuts. Meaningful environmental legislation was rare, and unions tumbled hard. In other words, the 80s and 90s looked just like Reagan and Clinton, respectively, not like the makeup of the Congress.

The other reason I didn't look to the Congress is simply that it's so hard to characterize a Congress as "Democratic" or "Republican", no matter who happens to be in charge of each house. There's just such an enormous difference between very liberal and very conservative Democrats, in Congress, that merely counting them as Democrats can be deceiving (there's also a gap between very conservative and very liberal Republicans, but they have a MUCH greater tendency to vote as a party, so it's less important).

So, for example, a Senate with 50 Democrats tending towards the Wellstone/Feingold/Kennedy end of the spectrum may make for a more "Democratic" Senate than one with 60 Democrats tending towards the Breaux, Miller, Lieberman end. That's not a total obstacle in analyzing the effects of Congress, on a party basis, but it does make it a whole lot more difficult.

To your list of measures of the economy, I would add poverty. I would clarify that GDP should be real GDP change. I would ask that Per Capita Income be measured as Median Real Wages (since Per Capita Income could go up if the top 1% got a lot richer, even if the other 99% actually ended up worse off). Also, I think inflation is only a meaningful item outside of a certain range. Between about negative 1% (deflation) and 5% inflation, there's little serious hardship for most Americans associated with inflation. Since most of us are in debt, with the bulk of that debt being a fixed-rate mortgage, mild inflation erodes our liabilities about as quickly as our incomes... and our incomes soon catch up. Only when we move towards hyperinflation (or serious deflation) does it become an issue for most Americans. I'd also add the change in the deficit (or surplus), since increasing use of deficit spending can artificially push the other numbers in a desired direction, with the bill coming due later.

Also, there's the issue of how to account for non-traditional measures of economic performance. For example, if my real wages decline $5000, but, at the same time, I get $10,000 worth of valuable government benefits, aren't I better off? Or, for another example, if I'm plunking away $350/month on individual healthcare, and then the government steps in and provides it as a free benefit, that amounts to increased prosperity for me, doesn't it? How do we account for increased and decreased government benefits? If I were in charge and I could cut government services such that the GDP went up but most people ended up much worse off, I wouldn't do it.

>But the war was not a 'policy'. Rather it was one of those
>uncontrolled elements like the weather in our analogy.

How so? It sure looks like a policy to me. Certain wars have been more or less beyond our control (like WWII, where we were inevitably going to be drawn in, and did, in fact, get attacked), but with most others our involvement is a policy decision.

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Replies:

OK, we're making progress -- Richard, 10:05:45 11/01/02 Fri
- Re: OK, we're making progress -- Kafka, 17:17:51 11/01/02 Fri