Daniel Gross

Age of Austerity Makes Politics More Divisive: Author Edsall

It's the economy stupid! The buzzword from the 1992 presidential campaign has resonated in ways simple and complex throughout the years. The campaign of 2012 is no different. This year's contest is set against the backdrop of an economy recovering from the hardest fall it has taken in 80 years, rising gas prices, a massive public debt, and significant questions about the future of taxes.

But the pinched era of deleveraging, slow growth, and high unemployment has effects far beyond the ballot box, according to Thomas Byrne Edsall, the author of The Age of Austerity: How Scarcity Will Remake American Politics. Edsall, one of the deans of American political journalism, argues that limited economic horizons make American politics more pinched and polarized, less generous and forward-looking. Americans aren't inherently nasty or nice, or stingy or generous—but rather the economy makes them so. As we discuss in the accompanying video, if sustained growth covers up a multitude of political, fiscal and economic scenes, so sustained slow-growth exacerbates existing tensions.

Edsall's book is a systematic inquiry into the effects of scarcity on the American political system. And his general conclusion is that the effects are quite bad. The political conflicts of the past few years highlight a political system at the breaking point, he argues. As a result of large deficits and slow growth, the longstanding compromise "between one party promoting a social safety net and the other party asserting that hard-earned tax dollars unjustly finance those benefits is no longer tenable." And that creates a "dog eat dog political competition over diminishing resources."

In Edsall's view, prolonged austerity producing greater cleavage in voting behavior between races and genders, and accounts for rising hostility to immigrants. When there are fewer jobs to go around, people tend to be more concerned about foreigners coming in and taking them away. Edsall believes it is no coincidence that Arizona, one of the states whose government and local economy were hit hardest in the downturn, has been among the most aggressive states in enacting anti-immigrant legislation. (Of course, it also shares a very long border with Mexico.)

The tendency toward polarization has other effects. Left and right today tend to adhere to a different set of facts when it comes to basic issues such as taxation, government spending, global warming, and the role of unions and management. Polarization spurs a kind of imperviousness to facts (think of the birthers, or the high percentage of Republicans who believe President Obama is a Muslim) that makes political dialogue and compromise all but impossible.

Add it all up, and it's a very pessimistic outlook. The two parties have fundamentally different approaches toward dealing with the issues raised by austerity, and lack the ability to come together to make grand bargains on the deficit or entitlements. And Edsall doesn't believe that the 2012 election will settle things — any more than the 2008 or 2010 elections did.

Edsall's argument is elegantly constructed and lavishly supported by political science references, charts, graphs, and data. But I find it difficult to buy fully into his pessimism. Many of the economic problems the U.S. faces are structural, but not all of them are. Many of the issues he raises were exacerbated by the sharp cyclical downturn the U.S. economy experienced in 2008 and 2009, and will be dealt with in part through a continued cyclical upturn. Federal revenues, jobs, industrial production, corporate profits, overall growth — all have been trending upwards since their lows of 2009 and many are continuing to gain momentum. And that's happened despite the bitter partisan warfare in Washington, not because of some grand era of cooperation. Edsall concedes that in states like Arizona that have started to bounce back from their bottoms, some of the tensions he decries have calmed down. "Just as when the economy collapsed, anti-immigration sentiments soared, when the economy eased, so too did the drive to get tough."

A few years of three percent growth won't make all the conflicts inherent in the American social and political system go away. But they will take away some of their sting and make them less menacing. As the economist Benjamin Friedman convincingly argued in The Moral Consequences of Economic Growth, it has frequently been the case that widespread economic gains lead to more generous, free, and inclusive societies — in the U.S. and throughout the world.

Daniel Gross is economics editor at Yahoo! Finance

Follow him on Twitter @grossdm; email him at grossdaniel11@yahoo.com

His upcoming book, Better, Stronger, Faster: The Myth of American Decline and the Rise of a New Economy will be published by the Free Press in May. It can be pre-ordered here, or here.

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