Larry Summers says there’s hope for American democracy yet, if not, perhaps, for the economy.
On Wednesday morning, following a better-than-expected showing for Democrats at the polls, Summers weighed in with what amounted to a congratulatory message for the White House.
I highlight it here not so much because it comes from one of the most recognizable names in the macroeconomic universe, but rather because it emanates from one of the most fervent critics of the Biden administration’s handling of the US economy.
Let’s be clear: Republicans should’ve swept every competitive race this week. Headline inflation is 8%. And, as Summers has spent the last two years explaining, it’s eminently plausible to suggest a direct link between inflation and Democrats’ spending package.
Seen in that light, there’s a sense in which Summers did everything he could to show Republicans the path to midterm glory, and while the GOP did, in fact, put a lot of emphasis on inflation, that message might’ve been muddled by incessant allusions to the poisonous culture wars.
With all of that in mind, Summers had the following to say about Wednesday’s “purple mud,” as I called the election results. I include a chart for context.
It looks like you have to go back to JFK to find a Democratic president whose first midterm election went as well as [Joe Biden’s] did last night.
This should confound doomsayers in both parties. Given all the concerns voters had, it is hard not to see the election as a repudiation of MAGA extremism. The center held.
A small Republican majority in the House risks being a hot mess on economic policy as the nutcase minority within the majority may thwart whatever instinct for responsible governing there might be.
This risks dangerous uncertainty and paralysis on the debt limit and other economic policies at a very fragile time in the markets.
Ultimately, as with the extremists in the House class of 1994, it may be a political gift to Democrats. The Biden Administration has a historic opportunity, even in the midst of current challenges, if it can skillfully implement infrastructure, technology and green economy measures that have already been approved.
Most important for the future, the election showed that even in this fevered atmosphere, the American people can detect and reject demagogues.
I feel better about the future than I have in some while.
Interesting to see if the Democrats try to pass something in the lame duck session. A big package of Ukraine aid will, I hope, be high priority.
I agree with Summers pending the final results of the Senate. A slight Republican majority in the house leaves room for a few Republicans to cross the aisle for things like Ukraine aid and not holding the government hostage should things really turn sour in the economy. Trump got a decent number of election deniers elected, but most of them are in inconsequential states (i.e. states that would be solidly in Trump’s camp anyway).
If Democrats can hold the Senate, we also avoid judicial gridlock which is no small thing. Let’s just hope Biden didn’t piss Manchin off too badly to the point where he flips. I’d love to see Dems run the table in Nevada, Georgia, and Arizona so Manchin doesn’t blow the whole thing up.
I rarely (and did not) vote a straight ticket. In my first round of analysis, I eliminated all crazies on either side, anyone who is pro-life and any die hard Trumpers. Based on who is remaining- I make my voting decision.
I’m now curious, who’s a “crazy” on the Democratic side of the aisle?
I too feel somewhat “better”. Hope for our democracy remains
me too.
It does look like the democracy held. I was concerned a couple of days ago you swore off politics, I’m glad you made an exception for the midterms.
No, no. I didn’t swear off politics. I just described the evolution of my editorial approach to domestic political coverage. Over time, I’ve learned that the best approach is to fold it into macro coverage, so that all readers can appreciate the relevance — i.e., “Well, I don’t necessarily agree with his stance, but I certainly see why he’s incorporating it here, and I appreciate him bringing the issue to my attention and explaining why it’s relevant for the macro or the prevailing market zeitgeist.” That’s what I want people to think when they read my domestic political coverage, because that way, everyone feels like the time they spend here is time well spent even if they might not agree with me on every single domestic political issue.
If you’re referring to my remark about how my approach might change if the US transitioned into a Orban- or Erdogan-style autocracy, that’s just me telling it like it is. If the US gets into that kind of situation, and particularly if the autocrat is litigious and commandeers the courts, the situation can become very inhospitable. In an outright autocracy (e.g., a Saddam-style regime), then obviously people like myself have to make really tough decisions, but I don’t think that’s where the US is headed. An Orban-style system is eminently possible, though. And in that scenario, you’d see the tone of almost everything change. Wall Street research included. Outlets like WaPo would be run out of business, not by brute force, but by endless litigation, sham DoJ proceedings, etc.
One way or another, though, my ongoing efforts to professionalize the site are a win-win for everyone. The more professional it is on every front, the less open it is accusations of bias, etc. from any side of the political spectrum and, more importantly, the more helpful and enjoyable it is to look at and read, even if some readers miss the satire from yesteryear.
I do too (feel better) …maybe there’s hope for peaceful sanity?