Much of the media have committed malpractice this campaign by, as usual, focusing on polls, personalities and the horse race. This brings at least two problems. It fails to illuminate the issues and hold candidates accountable for their records and stands. And it can actually dampen turnout if voters for the side the polls predict will lose don’t bother to vote.
But if the polls are correct and Republicans take control of the Senate, one economic outcome is certain: There will be a doubling down on austerity. Here’s how it’s been working so far:
With the GOP in control of the House, where appropriations must pass, in a blocking position in the Senate, and setting the national conversation, federal spending has plummeted. Yet private consumption and corporate spending haven’t made up the gap in demand. No wonder the economy remains slow, so many millions are unemployed and underemployed, and wage growth is nil.
Here’s how Ronald Reagan and Tip O’Neill handled the aftermath of the 1981-82 recession, the worst downturn since the Great Depression — until the Great Recession:
And lest you think most of the spending was the Reagan defense buildup, there’s this context:
Austerity is a terrible idea and the root of much of voter dissatisfaction over the economy. But if the polls are correct, we’re about to double down on more. Next up: New threats to shut down the government and default on U.S. debt.
Today’s Econ Haiku:
Come on in, the tech is fine
And move to the core