Category Archives: Election

It’s Families Stupid

In Nate Silver’s recent post “What Do Economic Models Really Tell Us About Elections?” he argues that it’s not much. All in all I agree with his conclusions, but for different reasons. He takes a look at GDP growth and the margin of victory/loss in a presidential election, and shows when you take away inflation, 43 percent of incumbents win reelection. He admits these numbers don’t go into why, but that’s where I come in.

The fact is GDP doesn’t measure what voters really care about and can miss a lot of important aspects to a families quality of life. Pollster’s never ask how many people know how much the economy grew in the last quarter. Instead they ask how they feel it is going, and since the majority of voters aren’t economists, the only reference they can refer to is themselves. So they think about if they are able to pay the bills, put food on the table, and have healthcare for the members of their family. The reason why Nate’s formulas are so off is because GDP, like most macro data, doesn’t cover these things. Even basic data like average incomes still don’t tell you the whole story. Take a look at the average income for individuals:

Whether incomes have gone up or down, it hasn’t lead to a President, or his party, keeping the White House. This was the case in 1976, 1992, and 2000. While there wasn’t much change between 2004 and 2008,  there was a drop in 2009 because of the Great Recession, and we all know who won that year.

While pollsters try and figure out what’s on people’s minds, economists need to try and start doing the same thing. A Washington think tank called the Economic Policy Institute came out with a report titled The Rising Instability of American Family Incomes, 1969-2004. The authors point out that “Part of the reason why family economic instability—sometimes called “income volatility”—has not been extensively examined is that aggregate economic statistics have been relatively stable and favorable. Neither the 1991 nor the 2001 recessions were particularly deep, and inflation and unemployment have remained historically low. Yet.. these broadly stable and favorable aggregate indicators mask many signs of declining economic security among American families.”

The report came out in May of 2008, before the Great Recession, but some of the findings might surprise you. It turns out 15 percent of American’s saw their salaries decrease between 1969 and 2004, causing serious strain within the family. Right at the turn of the century, levels of family income were extremely violent, where over half of American families saw their earnings drop.

Just because incomes were rising and unemployment was low, didn’t mean all families were living the high life. Health care costs soared way over inflation, so even if there were two breadwinners per household, there was still a good chance they couldn’t afford health insurance. Not to mention most people received coverage through their job. And future problems are becoming apparent. As the price of food has gone up, it will eventually start affecting a large amount of families.

The unemployment numbers that came out last week weren’t good. And yes those and other macro indicators can show politicians where the state of the overall economy is right now. But if politicians want to actually do something about it, they need to look at the root causes of high unemployment, why food prices are rising, and figure out why the cost of health care has been rising. But they can’t do this without getting the right information. If a politicians job is to get reelected, they will start demanding the information that will show them how to help their constituents, and economists will start figuring out ways to calculate it.

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Filed under Economics, Election, Families, Political Economy, Politics, Public Policy, Think Tank, Unemployment

Election In Sudan

The new year is meant to be a fresh start and a chance to look to the future. It is a time where it is possible to leave all the bad things that happened last year behind, and decide where you want to take your life.

The people living in southern Sudan will have an opportunity to do this on January 8th. For decades, the conflict in Darfur has been documented by reporters such as Nick Kristoff, and stories have been told through the organization Lost Boys of Sudan. But a new chapter will be written once the coming elections takes place.

After years of civil war, and treaties that promised peace that never came, the President of Sudan, Omar al-Bashir, said that he would accept whatever the results of next Saturday’s elections. But this is the same person who is wanted by the international criminal court for the genocide that took place in 2003. It is expected that the south will vote to secede, but there have already been problems with the international organizations which are trying to help. While the United Nations has managed to raise billions of dollars to help those who have been displaced, a lot of that money has not been properly accounted for. A large portion of the money was meant to be used to re-integrate members of the military into society, but it was recently reported that most of the money was spent on staff equipment, salaries, and vehicles instead.

However, the State Department has reported that all the ballot and voter registration drives were completed without hindrance, and at this point the vote is expected to be credible.

The Civil War in the country has displaced millions of families. Leaving people hungry and homeless. This also burdens border nations, and the rest of the continent, where these people migrate to because they have nowhere else to go. If this strife continues to happen, it can create instability for the entire continent. With the world becoming more and more integrated every day, it is important for the international community to help Sudan stabilize and grow its economy, no matter what the results of the election may be.

If the election is deemed to be a fair process, and the south votes to secede, the international community will have to put pressure on President Bashir to make sure they are allowed to do so peacefully. But Bashir has every reason to keep the north and south together. The southern regions of Sudan are where most of the oil in the country is located. Without that, the north will not nearly have as strong of an economy. And if the people in the south vote not to secede, steps need to be taken to make sure what happened in 2003 never happens again.

According to The Brookings Institution, strengthening the rule of law is a key element to helping the Sudanese who have been displaced. Economic opportunities are not the only reason The Lost Boys and millions of others without a home will want to go back. They left because Sudan was not a safe place to live. The Sudanese in the south have lost their trust in the north, and with good reason. But with a strong new and independent government, policies can be implemented to make sure that the people living in southern Sudan are safe.

If the people vote to secede, and Bashir goes back on his word, corporations can divest from the country, and sanctions can be imposed by the United Nations. This will tighten Sudan’s belt and put pressure on the north and force Bashir to implement policies that will stop the atrocities that continue to plague the country.

While the Obama administration has had a lot on its plate the last couple of years, it has only talked, and not implemented policies which can help bring about peace in a region where the children have known nothing but war. This is an opportunity for the international community to come together and create a place that is not only able to help those living today, but for the future as well.

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Filed under Africa, development, divestment, Election, north, Oil, President Bashir, President Obama, south, Sudan, United Nations