It’s easy to suppose that an election campaign’s mechanics — gaffes, organizing, fund-raising, ads — determine its outcome. But political scientists typically believe that what matters most is the economy: when the growth rate is good during an election year, the incumbent party is re-elected, and when it’s not, they’re booted out. This year’s results certainly fit that pattern.
But there’s more to the story than that. In his book “Unequal Democracy,” the Princeton political scientist Larry M. Bartels found that between 1948 and 2005, real income rose more under Democratic presidents than under Republicans. And yet Republicans benefited from a curious election-year pattern. For Republican presidents, the economy was typically sluggish during the second and third years of their terms, but strong in the fourth years, while for Democrats it was the opposite. Bartels speculates that this is a result of the parties’ priorities. When Republicans take office, they worry about inflation first and slow the economy in order to deal with it; the economy then bounces back toward the latter part of the term. Democrats typically prioritize the creation of jobs, and then, worried about inflation toward the end of the term, slam on the brakes.
Of course, inflation and economic growth aren’t set by presidents alone; they’re also shaped by other actors, including the Federal Reserve, which controls the money supply. The conventional view is that the Fed generally does not respond to political pressures. But in a working paper published last year, the economists James K. Galbraith, Olivier Giovannoni and Ann J. Russo analyzed Fed interest-rate decisions in the years between 1969 and 2006 and found a pattern in which “periods of sustained, abnormally low interest rates all begin during Republican administrations. All end following an election involving a Republican incumbent or his immediate successor.” This, the authors suggest, points to “the presence of a serious partisan bias, at the heart of the Federal Reserve’s policy-making process.”