Liberals and Economic Growth


Mike Konczal and Matt Yglesias scoff at the notion that the economy will suffer unless the president constantly massages the egos of sensitive businessmen, a sentiment I share profoundly. Matt goes on to note that, in any case, regardless of what the business class thinks, economic growth is usually better under Democrats than Republicans:

The fact of the matter is that businessmen like conservative politicians….Economic growth was better in the 1990s than in the 2000s, but businessmen liked George W Bush better than Bill Clinton. Growth was better under FDR than under Eisenhower, but businessmen liked Ike. And that’s fine, businessmen are free to like or dislike whomever they want. But their subjective view of politicians doesn’t cause or hamper economic growth.

….I really do think progressives need to try harder to claim the mantle of growth for ourselves. Conservatives like to talk about the importance of economic growth, but they’re not only bad at delivering it in practice, they’re remarkably hostile to the idea of boosting growth….

I agree that liberals ought to do a better job of persuading the electorate that liberal policies are friendly toward economic growth, but it’s worth a pause to say that even if we do this successfully it won’t affect the business community’s view of us at all. Despite what they say, business executives don’t care much about economic growth. They should, but they don’t. What they care about is low taxes, light regulations, firm anti-union policies, robust corporate profits, and a sense that the bureaucracy of the government is sympathetic to their needs. Liberals are just never going to give them that other than narrowly and briefly (as with financial deregulation, for example, which was great for the Democratic Party but turned out to be not so great for the economy).

As for the broader electorate, they don’t care much about generic economic growth either. They care about their own paychecks. This means that if Democrats want to win them over, they need to support policies that support economic growth and channel that growth largely toward the working and middle classes. Those are separate challenges, but without them both an agenda dedicated to economic growth won’t really do us much good.

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