The Sky Really Is Not Falling
Sean Evans, Chair and Associate Professor of Political Science
Nov 3, 2008
All this is done for one purpose: to get you to vote. Campaigns exaggerate the differences between the candidates to win over and mobilize voters. Unfortunately, the unintended consequence of these actions is that it raises people's anxiety over the election outcome. The fear is probably even greater this election because we have a black candidate leading the polls who has a funny sounding name and is the object of many scurrilous rumors.
However, if we keep things in their proper perspective and examine history, we can rest more easily. So since we are most likely headed toward a victory for Barack Obama and large Democratic majorities in the House and Senate, let's put some statements in their proper perspective.
First, "capitalism is dead" or "we are all socialists." Yes, the government has taken an ownership stake in banks and this is "socialist." However, while neoclassical economics, the closest thing we have to laissez-faire capitalism, believes that government involvement in the economy is unwise, it supports government intervention when there is market failure. Then, the government should step in, fix the problem and step back out.
That is exactly what the rescue package is designed to do. If anything, the greater risk of the bank rescue is moral hazard. This principle says the bailout may prevent business from learning from their mistake, which leads them to repeat it.
Second, this is the "worst economy since the Great Depression." Not even close. During the Great Depression, 5,000 banks failed, unemployment was 25 percent, GDP fell 30 percent and wages fell 20 percent. Today, 16 banks have failed, unemployment is 6.1 percent, GDP fell .3 percent in the third quarter and income has fallen 2.5 percent.
Frankly, our current economic troubles do not even compare with the economy of the 1970s when both unemployment and inflation were over 10 percent. Now, the economy is struggling and people are suffering. But the economic situation is not as dire as Democrats claim.
Third, Obama-Pelosi-Reid will move the country in a liberal direction. Liberal, yes; socialist, no. Elections have consequences, so if you oppose the United States moving in a liberal direction, vote Republican. However, the genius of our founders is that they created a separated powers system that makes it difficult to pass legislation.
Even with complete Democratic control of government, moderate Democrats and Democrats in marginal districts will not risk their seats by supporting extremist legislation. After all, only 22 percent of the public is liberal, while 38 percent are moderates and 37 percent conservative. And if Democrats move too far left, the public will punish them in 2010 like they punished Republicans in 2006 and will punish in 2008.
Fourth, a filibuster-proof Senate will ensure the enactment of liberal policy. No, filibusters are issue-specific and any cloture vote to end a filibuster would depend on the issue. For Republicans, who would be a smaller, more ideologically coherent minority, they have greater incentives to stick together to maximize their influence.
And even if Democrats pick up a moderate Republican or two, they may not be able to count on Connecticut's Joe Lieberman, a true conservative Democrat like Ben Nelson of Nebraska and several moderate Democrats.
Finally, these feelings of anxiety are not new. John Adams was so despondent over Thomas Jefferson's election that he left Washington early to avoid Jefferson's inauguration. More recently, certain celebrities promised to move to Canada if the nation re-elected George W. Bush. We did, they didn't move and the country survived.
This should reinforce the moral of the Chicken Little story: don't believe everything you hear. Because things are never as bad as they seem. Feel better?
This article originally appeared in the Jackson Sun on October 31