Liberal vs. Conservative Economic Ideologies - Liberalism Still Winning

The post of mine that gets searched and viewed the most is one from two years ago entitled Liberal vs. Conservative Economic Ideologies wherein I argue that liberal approaches to the economy surpass those of conservative approaches both theoretically and empirically. I find it interesting and encouraging that people are interested in making this comparison and are doing some research.

Since there are elections in the US and Canada and the economy is a primary concern, evaluating the differences between the two is as relevant a pursuit as ever. So aside from directing you back to my original post, I'll add a couple more references that continue to reinforce my argument.

BMO Chief Economist Sherry Cooper issued an article yesterday stating, "American consumers have pulled back sharply, as necessities have dominated their spending. High food and gasoline prices reduced discretionary income, yet consumers refrained from spending much of their rebate cheques (emphasis added)." Funny that, when you give money back to the people they save it when the economy is in doubt. Yet time and again conservatives flatly state that tax cuts will spur a flagging economy, and yet again we're seeing the failure of this misguided belief. Tax cuts are fine and encouraged in a strong economy, but when things are heading south, it's best to have a government flush with cash - such as when the Liberals were in power.

The second tidbit reinforces a claim I made in my original post that liberal economies outperform conservative ones. This recent article in the New York Times by Alan S. Blinder makes the case. He states, "few are aware of two important facts about the post-World War II era, both of which are brilliantly delineated in a new book, Unequal Democracy, by Larry M. Bartels, a professor of political science at Princeton." The first fact he calls, "the Great Partisan Growth Divide. Simply put, the United States economy has grown faster, on average, under Democratic presidents than under Republicans." He continues with some data, "for the whole period from 1948 to 2007, during which Republicans occupied the White House for 34 years and Democrats for 26, show average annual growth of real gross national product of 1.64 percent per capita under Republican presidents versus 2.78 percent under Democrats. That 1.14-point difference, if maintained for eight years, would yield 9.33 percent more income per person, which is a lot more than almost anyone can expect from a tax cut."

The second point outlined in the article is, "the Great Partisan Inequality Divide," which is the topic of Professor Bartels’ book. Blinder states:

"it is well known that income inequality in the United States has been on the rise for about 30 years now — an unsettling development that has finally touched the public consciousness. But Professor Bartels unearths a stunning statistical regularity: Over the entire 60-year period, income inequality trended substantially upward under Republican presidents but slightly downward under Democrats, thus accounting for the widening income gaps over all. And the bad news for America’s poor is that Republicans have won five of the seven elections going back to 1980."

So when voters in the US look at McCain/Palin to rescue themselves from Bush/Cheney, they might ask themselves if perhaps they're not exchanging one shovel for another in order to get themselves out of their hole.

In Canada, Harper clearly adheres to the modern conservative affliction of never having met a tax he couldn't cut. Canadians should look at their history and realize their country was not built on trickle-down fantasies and individual competitive spending, it was built through a strong social welfare philosophy of harnessing the combined strength of all through government. The only way Harper can move Canadians away from this history is to reject the Canada we know in pursuit of a Canada based on a failed ideology. Canadians may allow Harper to do this at their peril.