OF POLITICS AND ECONOMIC REALITY: The Art of Winning Elections with Sound Economic Policies

From a research project at Harvard Business School, Bhide (now at McKinsey & Co.) got the idea that we've got it all wrong: ""Irresponsible economic policies"" are not ""good politics."" Specifically, ""the public does not want politicians to incur deficits rather than vote for higher taxes."" It's not true, either, ""that easy money--ample credit and low interest rates--wins elections."" And ""while politicians may find it useful to promise protection to get elected, it makes no sense to keep that commitment once they are in power. Barring miracles, the votes of workers from declining industries are more or less lost. . . . There is no percentage, for an incumbent, in. . . interfering with the majority's freedom to choose between domestic goods and imports."" Even social security shouldn't be considered sacrosanct: ""politicians will have to create and exploit differences within the seemingly solid bloc of the elderly."" Rampant contrarianism apart, what's going on here? Well, Bhide regards himself as a ""populist""--which he equates with what's ""popular"" with the majority of people. Not that they understand politics or economics; but they do ""vote their pocketbooks, even if they can't understand."" According to this analysis, if you gain some votes by favoring a special-interest, you lose the votes of those who don't benefit: there are no ""free votes."" If you lose some special-interest votes, correspondingly, you gain more voters-at-large. This theory, of course, allows for no issues but pocket-book issues, no concern but the economy--and no doubt even on economic issues like ""free trade."" Most particularly, it refuses to see the complexity of the American body-politic, and the trade-offs among special interests that keep it in dynamic balance. In that B-school study, Bhide was impressed with the ""efficiency"" of certain ""tough-minded (and not always democratic) Eastern regimes"" like Japan, Korea, and Singapore, as compared with ""the performance of Western welfare states."" His qualifier, ""not always democratic,"" should at least suggest to Bhide that a heterogeneous ""grass-roots"" democracy functions differently. For economic efficiency in a Western, social-democratic context, see Robert Kuttner's The Economic Illusion (p. 734); for a democratic/ conservative consensus on economic policy, see Kevin Phillips' Staying on Top (p. 743).