PAUL KRUGMAN: Policy and the fog of politics
Wednesday, Nov. 17, 2021 -- "Democracy," Winston Churchill declared, "is the worst form of government except for all those other forms that have been tried from time to time." But how bad is it? Looking at public opinion right now, it's hard to escape the impression that it's very bad indeed.
Posted — UpdatedIn principle, voters should judge politicians by their actions; they should support politicians who pursue policies that help them, oppose politicians whose policies would hurt them. To do this, however, voters should have a reasonably good idea of what policy is doing.
Unfortunately, when it comes to economic policy — which should be the easiest kind of policy to evaluate, since its effects are visible in everyone’s daily life — there are few reasons to be optimistic about the relationship between policy and public opinion.
In a sensible world, voters would have both a reasonably accurate picture of what’s happening in the economy and a basic understanding of what aspects of the economy are under politicians’ control. In the world we live in, neither of these things is true.
But other data show a huge divergence between what people say about the state of the economy, which is quite negative on average, and what they say about their own personal finances, which is fairly positive.
This divergence suggests that people’s views on the economy reflect what they’re seeing on often partisan news media and what their politics say should be happening, rather than what they themselves are experiencing.
So many voters seem to have skewed perceptions of economic reality. Furthermore, to the extent that they see genuine problems, they may not be clear about which problems politicians can solve and which they can’t.
Take the price of gasoline, which has risen about $1.50 a gallon from its pandemic lows:
Higher gas prices represent a real hardship for many Americans — and historically voters have seemed to blame the president when gas prices go up. Yet presidents have very little influence on prices at the pump.
In the current episode, what’s driving gas prices is a surge in the global price of crude oil. Here’s the price of Brent crude, that is, the price in European markets (which generally moves in tandem with prices everywhere, because oil is a globalized commodity):
Crude is up more than $60 a barrel. And since there are 42 gallons in a barrel, this means that the price of the crude oil used to make a gallon of gasoline has risen by $1.50 — basically accounting for all of the rise in the price to consumers. That is, developments outside the control of any president are driving a price rise that is surely one factor in President Joe Biden’s approval ratings.
So we’re living in a nation with many voters who seem to have both a distorted view of the state of the economy and false beliefs about what aspects of the economy politicians can affect. How is democracy supposed to function well under these conditions?
Just to be clear, I’m not condemning voters for not being economic experts. People have children to raise, jobs to do, lives to live. Expecting them to be sophisticated policy analysts is unreasonable.
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