Back in August, this NYT piece took some arguments from Bartel’s book “Unequal Democracy” (reviewed at the Daily Kos) and makes into an outrageous conclusion:

“an Obama victory in November would lead to faster economic growth with less inequality, while a McCain victory would lead to slower economic growth with more inequality. Which part of the Obama menu don’t you like?”

How did he get here? The main argument is correlation between party in power and economic growth:

“Data for the whole period from 1948 to 2007, during which Republicans occupied the White House for 34 years and Democrats for 26, show average annual growth of real gross national product of 1.64 percent per capita under Republican presidents versus 2.78 percent under Democrats.”

Dems x Reps in economy

Dems x Reps in economy

Slate also jumped to conclusions based on a correlation, taking with it lots of bloggers:

“what these numbers show almost beyond doubt is that Democrats are better at virtually every economic task that is important to Republicans.”

But, as Mankiw and generations of statisticians have pointed out, correlation is not causation.

A more reasonable explanation has to do with cyclic economy and public dissatisfaction. As the usual, germaine business cycles fluctuate over the years, periods of contraction will necessarily be followed by periods of expansion. During the economic contraction, with jobs market reduced, people’s dissatisfaction translates into a voting pattern: to elect the “other” party. After a party switch, the economy naturally recovers and the new party finds itself owner and author of the exuberance.

Notice how the change in unemployment during the last 18-24 months before a election is the key for a party switch:

Unemployment rate x Party in power

Unemployment rate x Party in power

[Source: BEA]

Nixon was re-elected with unemployment down from 6% to 5.1%. Carter won when unemployment went up from 7% to 7.8%. Reagan won with unemployment up from 5.9% to 7.4%, and got re-elected with the rate down from 10.6% to 7.3%. George H W Bush kept the Republicans in the White House when unemployment went down from 7.3% to 5.5%. Clinton won with unemployment up from 5.5% to 7.5%, and was re-elected when the rate went down to 5.5%. Even George W Bush was re-elected after the rate went down from a high 6.2% to 5.5%.

The exception was the election of 2000, when Republicans won even when the 18-month unemployment change was narrowly down. But we all remember that election.

So why would Slate and the NYT ignore common sense and end up with such a partisan conclusion? Slate’s article begins with “If you’re wondering why a formerly honorable man like John McCain would […]”, and the NYT analysis (sic) quotes the populist theme in “Mr. McCain wants more tax cuts for the rich; Mr. Obama wants tax cuts for the poor and middle class”.

And I’m not the first to notice that.

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