How Mature Democracy Harms Economies

I will begin by cleaning up the obvious reactions to the title. First, I recognize that what we are actually speaking about are republics not democracies. Technically when voters choose representatives rather than vote directly on the issues one has a republic. Second, given the rhetoric of those running for office mature appears to be a dubious term. Here I am referring to republics that are well developed in that when the party in power changes the change occurs relatively seamlessly. Finally, despite the title and what one reads below, I am not calling for the end of democracy.

As the United States moves toward its mid-term elections one cannot help but notice the lack of depth in the candidates’ positions. Candidates feel no obligation to explain how they will finance their expenditure projects or precisely where they will cut expenditures to finance their tax cuts. It is left to the voter to reason that the expenditure increases or tax cuts will so increase national income that the corresponding additional income tax revenues will pay for those policies. More importantly, however, the public does not demand an explanation. The result is that technical matters are completely avoided and the average campaign amounts to telling the electorate that the candidate should get the job, not because they have wonderful, practical, and well thought out policy prescriptions, but rather because the other candidate is bad in one way or another.

If once in office that behavior was cast aside in favor of hard work and thoughtful policy making, one could simply write off the former problem as one stemming from dealing with a poorly informed, poorly educated, too busy, or too lazy electorate. Society could be assured of hard working representatives whose goal would be to make society as well off as possible. Unfortunately, politicians never stop running and appear to have rewritten their job description to read that the only objective of the Representative is to be re-elected.

What that means for economic policy, is that politicians latch on to phrases and “uber” statements that often have no merit or are employed completely out of context. Serious policy making is reduced to catch lines and grandstanding before the omnipresent press. In the United States the country has become so divided that grid lock and ill will has spread throughout Congress and the State legislatures and into the public domain.

The adage that stood for wisdom in the past was that politics is the art of compromise. One got the idea that politicians in the end had the best interest of the country at heart and that they could pull together to do the imperfect but right thing. One gets no such impression anymore.

The world is facing an economic crisis. It is time for politicians in democratic nations to “mature it up”. Forget about the electorate whose inappropriate grasp of economic reality you have cultivated. Get busy fixing the problem. Make progress by creating expenditure and tax incentive policies that will spur on the industries of the future and draw risk capital back into the market place. Contrary to the misinformed rhetoric, there is no burden on future Americans from running large deficits, even if foreign citizens hold that debt, as long as the economy grows overtime faster than does the debt. So spend and tax incentivize wisely. That should be one of your most important goals.

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