Last autumn, amid intimations of economic apocalypse, a chart was circulated among the Internet’s more optimistic and market-friendly bloggers. The chart estimated American gross domestic product per capita going all the way back to the presidency of John Quincy Adams, and it showed an astonishingly steady upward climb, with every downward squiggle reversed, within a year or three, by a return to rapid economic growth.
Past results do not predict future returns, of course, but to date it’s always been a good idea to bet on the resilience of the American economy. This has held true despite wild variations in the policies our politicians have pursued. We’ve elected tax cutters and big spenders; free traders and protectionists; regulators and champions of laissez-faire.
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We’ve taxed incomes at 90 percent and thirty percent and not at all. And throughout all these swings in government policy, American GDP has kept on clicking steadily upward — almost as if what happens in Washington doesn’t matter at all.
That’s an exaggeration, obviously: Zoom in closer on the chart, and you can find periods when bad choices in Washington cost America dearly, and better choices paved the way to better times. But it’s an exaggeration that gets at a fundamental truth — namely, that the president and Congress have considerably less control over the state of the economy than pundits and voters like to think.
There’s an obvious cautionary lesson here for the Democratic Party, which is committed to the premise that George W. Bush single-handedly wrecked the economy and Barack Obama can single-handedly save it. But the potential resilience of the American economy may pose a more acute political danger for the GOP.
You wouldn’t know it from listening to Republicans these days: They’re convinced that they’re hitting their stride in opposition. True, Obama is still basking in 60 percent approval ratings, but once his spending spree fails to revive the economy, conservatives insist, voters will come back around to a message of free markets and fiscal responsibility.
The investor class, Rush Limbaugh remarked the other day, is “betting on the market continuing to go south,” and so are conservatives. “Folks, Obama doesn’t have it,” Limbaugh told his listeners. “There is nothing that is going to come along tomorrow and restore the value of your house, replenish your 401(k) and … take the Dow back to 13 on the way to 15 … not with the leadership we have now.”
If history is any guide, Limbaugh could be right about Obama’s leadership skills and wrong about the American economy. This administration could make mistake after mistake and still inherit a turnaround — because turnarounds are what American capitalism does best. And if the country’s economic indicators start heading upward, voters probably won’t care whether the stimulus and the bailouts really had anything to do with the recovery; they’ll give Obama the credit, and ignore the GOP’s critique.
It’s possible, of course, that any recovery will be too slow and sluggish to benefit Obama. In 1992, voters turned out George H.W. Bush even though the economy had already turned the corner by election time, and then they turned on Bill Clinton two years later, just as the dot-com expansion was getting underway. But Obama is considerably more popular than either Clinton or the elder Bush, and the GOP’s position — demographically and financially, as well as in public-opinion surveys — is much weaker today than it was in the early 1990s. The country may turn on this administration eventually, but Obama probably has a lot more time to show results than Republicans would like to think.
None of this means that the Republican Party is doing the wrong thing by opposing Obama’s agenda. The nation needs a principled opposition, and it’s not as if a more me-tooish GOP would be likely to earn much credit for whatever happens on Obama’s watch.
But conservatives who play up the doom and gloom need to be aware that they’ll need something to say if the current recession turns into an “Obama recovery,” as a 200-year track record suggest that it eventually will. And they need to recognize that their current strategy amounts to a bet that mistakes inside the Beltway will matter more than American capitalism’s deep capacity for reinvention and renewal.
That’s not a position that a free-market party should ever be happy to find itself in.
