I read the following headline this week:
I didn’t need to read any further because the entire idea is based upon a false premise.
I don’t know who’s more delusional — the politicians who assume that their policy ideas and regulations will be able to make everything perfect for everyone or the voters who assume that a politician will be able to solve all of our problems.
If only my candidate were elected…
If only everyone came around to the ideas of my political party…
If only those idiots on the other side would just go away…
I’m all for people having a belief system, but far too many people act like the political versions of the perms-bears and perma-bulls. Plus, it’s amazing to me that the clowns in DC think that they can control the markets or business cycle enough to prevent recessions or market crashes from occurring. Everyone mocked the Chinese when they attempted to do away with stock market crashes (and failed miserably), but people here are very quick to believe the economic promises of politicians who know next to nothing about how the markets or economic cycles actually work.
Presidential candidates pull GDP growth numbers out of thin air and use them as a target without first considering whether or not it’s even within the realm of possibilities. 4% GDP growth sounds good; let’s go with that. They talk about doing away with business cycles like that’s just something that they can make a reality. They want to prevent the stock market from crashing or bubbles from occurring like they can control human nature.
I understand why candidates play this game. A few might be delusional, but really they’re just trying to do or say whatever will get them elected. They’re just giving the people what they want — easy solutions which don’t really exist for complicated problems.
One of my favorite parts about the Netflix show House of Cards is when Kevin Spacey’s character Frank Underwood offers a monologue to the audience to tell us all the truth about how things really work in Washington. Here’s how the current crop of presidential candidate would likely have to say if they were being completely honest with the American people, Underwood-style::
There’s no way I can possibly deliver on everything I’m promising to do in my campaign speeches. But if I make enough extreme statements I’ll be sure to get more voters who agree with me. Most of what I say comes from my team of advisors, consultants, donors and focus group research. My message will change many times between now and the election depending on how things develop. My biggest screw-ups come when I go off script and get out of character. I don’t actually believe half the stuff I’m saying. Most of the time I’m just trying to keep everyone happy and tell a large enough majority exactly what they want to hear.
If I do become president, I’ll get far too much blame if things go wrong with the economy. And if things go well, I’ll get far too much praise. Luck and where we happen to be in the business cycle when I take over will be the most important determinants of economic success under my administration.
I may have the ability to make things marginally better (or marginally worse) in the markets or the economy through some of my policy ideas, but I don’t have nearly as much control over the economic machine as most of you assume I do. If I do pass any regulations, they’ll be watered down and focused on fighting the last crisis, not the next one. And I honestly have no idea what the unintended consequences would be if we somehow were able to implement all of my ideas. No one really thinks that far ahead because we know it’s a pipe dream.
The most important person in terms of economic policy right now is not the president — it’s Fed Chair Janet Yellen. But that’s not going to stop me from pretending that I’m the great and powerful Oz, with the ability to sit behind the curtain pulling the strings on a multi-trillion dollar economic powerhouse.
How else would I get elected?