It will be interesting to read the inevitable Bobo/Jim Manzi/McArdle push-back on this:
Financial cycles of boom and bust are as old as finance itself—a fact that has led some observers to infer that human nature may be a fundamental cause of financial cycles. But “politics” also influences financial cycles by way of government policies and regulations. I argue that policies and regulations vary predictably with the partisan character of the government, creating a partisan-policy financial cycle in which conservative, pro-market governments preside over financial booms while left-wing governments are elected to office after crashes. My sample consists of all bank-centered financial crises to hit advanced countries since World War II, including the current “Subprime” crises—a total of 27 cases. I find that governments in power prior to major financial crises are more likely than the average OECD country to be right-of-center in political orientation. I also find that these governments are more likely than the OECD average to be associated with policies that predict crises: large fiscal and current account deficits, heavy borrowing from abroad, and lax bank regulation. However, once a financial major crisis occurs, the causal arrow flips and government partisanship becomes a consequence of crises. I find that the electorate moves to the left after a major financial crisis, and this leftward shift is associated with changes in government partisanship in that direction
jeffreyw
Shorter: The Republicans spill the milk and then cry all the while the Dems are mopping it up. Maybe they should mop naked like Mr Cole.
El Cid
CLEANUP ON AISLE “POST-REPUBLICANISM”! WHO’S ON DEMOCRAT DUTY TODAY?
JGabriel
It will be interesting to read the inevitable Bobo/Jim Manzi/McArdle push-back on this …
Shorter Likely Pushback:
They care far more about looking macho than governing responsibly. I wonder why that is.
.
IM
Well, in the UK Labour governed during the boom. Of course New Labour may not count any longer as a left-wing party.
neill
So Dickwad Greenspan is right, twice:
He and his cronies couldn’t see the crash coming ’cause he’s an ultra-conservative, and the new research shows they don’t see these things.
Or, he did see it, but because he and his cronies are ultra-conservative, according to the new research, they were just doing their jobs.
Bulworth
Does any of this mister high fallutin academic squishy “research” take account of the fact that conservatives are locked out of academia and Hollywood and affirmative action? Also, too.
gnomedad
@jeffreyw:
zomg, that’s perfect! Now stealing …
dmsilev
@jeffreyw:
Consider the typical Republican member of Congress. Consider what they likely look like unclothed. Please reconsider this suggestion.
dms
jl
@Bulworth:
Not sure your comment is serious, but let’s stipulate that it, just for fun.
Conservatives are ‘locked out’ of economics and finance departments?
I guess that is why economics and finance academics agree on everything.
Glen Tomkins
Why wait
No sense waiting around for these folks to respond. Herewith are the two elements, in shorter version, of their eventual responses:
1) Conservatism/Libertarianism cannot fail, it can only be failed. The rightwing govts in question will be shown, to the author’s satisfaction, to have failed in some crucial aspect to have actually enacted the Conservative or Libertarian policies to which they gave lip-service.
2) Socialism is what fails. What dun the dirty deed of financial crisis will be demonstrated, again to the author’s utter satisfaction, to have actually been lefty policy prescriptions implemented by Conservative-in-name-only govts. So there!
You should know better than to imagine that people capable of not laughing Liberal Fascism straight out of town, will ever be at a loss in the deflective arts.
Bulworth
@jl: Snarking is hard work these days.
jeffreyw
@dmsilev: It would ne Dems doing the mopping, but I take your point.
Linda Featheringill
Well yes. Because the unregulated “invisible hand” will lead to boom and bust. Period.
Zifnab
Nonsense. This is just more liberal academic partisan left-wing fearmongering yellow journalism. The Bush Administration presided over one of the biggest economic booms in the last 100 years. It wasn’t until Democrats took over Congress in 2006 that the market crashed.
Nancy Pelosi and Harry Reid caused the crash of ’08 by increasing the minimum wage. Wake up SHEEPLE.
What’s more, you’ll notice how the market hit an all time low in January of ’09. Far too soon for Obama’s policies to take effect, but not too late for the sunsetting Bush Tax Cuts to reach their zenith. The climax of the Bush Tax Cuts, combined with the conservative reforms in energy and spending throughout the ’00s were the only thing spared us from a far more destructive economic collapse. If John McCain had been in office, we would be back to ’05 stock market levels and everyone would have a job and a free pony and we’d be winning in Iraq again and Osama Bin Laden would be captured and we wouldn’t be hiding our grandparents in the attic to protect them from the roving leftist death panels.
God damn, but 2010 can’t come soon enough. Then we can finally elect Sarah Palin to be President.
Alan
Clash of the Titans: Obama vs. Goldman’s Reaganomics
Uloborus
@Zifnab:
This is the story the liberal media won’t tell us.
Mark S.
FT weighs in:
Wow, what bullshit. Did Reagan or Bush II cut any spending? Also, isn’t it usually pretty stupid to cut spending when you’re in a recession?
Kevin
I think I created this theory about 14 years ago after the Conservative government in Ontario once again drove the province into the crapper with their fiscal policies. Really, this is probably the most provable theory with ample evidence and only requires common sense to figure out.
Captain Goto
Kevin–one of your namesakes was hammering on this at least 20 years ago.
PeakVT
isn’t it usually pretty stupid to cut spending when you’re in a recession?
Yes, which is why conservatives are for it.
Shortest J. M. Keynes: Government spending should be counter-cyclical.
ThatLeftTurnInABQ
@Mark S.:
The FT is a little more Euro-centric. They are thinking of left vs right comparisons in Britain, Germany, France, etc., not just here in the US. The US right wing is something of a freak even by the admittedly rather relaxed standards of other right wing movements in the rest of the 1st world, particularly when it comes to fiscal policy.
matoko_chan
Big White Christian Bwana never has to wonder if God is on his side…thus, his actions are always correct.
Such interesting correlations…positive–>right of center political orientation and selfprofessed christianity…..negative–>religiousity and IQ.
matoko_chan
And ekshually……you can expect Manzi to be gulagged anytime now.
BombIranForChrist
What the Monkey Cage, if that is its real name, doesn’t understand is that this is GREAT NEWS FOR JOHN MCCAIN. Why can’t you hippies get that through your thick, thick skullz.
Brien Jackson
@matoko_chan:
He posted it at The Corner too.
corner.nationalreview.com/post/?q=OTMzMTY2ZmU2ZGY1YzQ3N2Q0MWY4M2M4OTMyZGRjMjY=
I obviously don’t agree with him that often, but I think Manzi deserves credit as being a good faith actor with a center-right viewpoint willing to engage in serious argument and thought. He definitely doesn’t deserve to be lumped in with lazy, sloppy, buffoons like Brooks and McArdle, IMHO.
Remember November
Of course, forgetting the obvious fact of post-Cold War Superhero Reagan’s defeating the evil empire being followed by Poppy Bush’s recession , also a Republican. Oops, kind of blows that generalised unsupported theory outta the water now don’t it.
elm
@matoko_chan: I was genuinely impressed by that Manzi piece. So impressed that I went back to reevaluate my (harsh) opinion of him.
Then I looked at In Defense of Robert Wright against Jerry Coyne which put my opinion of him right back where it was. A load of technically-true statements + a bunch of lies of omission and false syllogism creates something that looks honest but doesn’t withstand scrutiny.
matoko_chan
@elm: No, Manzi is only good on climate control.
You do unnerstand he is in the process of writing his OWN epistemic closure teatard blockbuster called “Keeping America’s Edge”, in which he offers deregulation, recycled supply-side economics, and school vouchers to maintain the Glorious American Exceptionalism.
Manzi is an intellectual whore……he is a faux-scientist that puts a gloss of “sciencism” buzzwords on teatard mythologies like creationism and vouchers.
My absolute favorite was when he tried to recycle free market capitalism by saying theory of cooperation as a new social cohesion model would keep the bankstahs from cheating,……all the while studiously ignoring the fact that cooperation benefits only accrue in-group.
elm
@matoko_chan: Yeah, Keeping America’s Edge was my introduction to Manzi and the source of my original disdain for his writing.
I ultimately did track down all the sources he referenced in the original article plus his two rebuttals but that wasn’t a terribly rewarding experience. It satisfied some of my own curiosity, but was unnecessary to demonstrate the mendacity of his arguments.
Per-capita PPP GDP growth rates for the past 3 decades are not very different among the U.S., Japan, the EU15 taken as a whole, the individual members of the EU15, and the EU27 as a whole. That’s apparent in every data set available on the subject, yet Keeping America’s Edge assumes the contrary. All the rest of Manzi’s (impressive) factual and rhetorical gymnastics can’t change that.