How to vote with the economy in mind? –Deseret News

Whether a local, state or national election, the economy is always an important issue for voters. And polling suggests that things will be no different for the fast approaching election in November. If you’ve listened to any political commentary over the past 30 years, you’ve likely heard the common refrain, “It’s the economy, stupid.” The expression, popularized in the early ’90s by James Carville, a political strategist who was working for President Bill Clinton’s campaign at the time, is often used to suggest that voting for the economy, quite simply, is what drives voters. The problem is there’s nothing really simple about it.

Even if you want to vote for the economy, it’s become difficult to discern which candidate will reflect your interests, as every election cycle brings us further away from campaigns based on coherent policy. Instead of platforms built on an internally consistent set of values, candidates run on collections of ideas that poll well with key constituents, resulting in an inconsistent track record on economic issues.

As a result, both the right and the left have adopted their own policy projects that clash with their historical values.

For example, Democratic Party nominee Vice President Kamala Harris’ recently announced proposal to give up to $25,000 to first-time homebuyers conflicts with the party’s populist ideals of representing “the people” rather than the elite. On its face, the benefit would seemingly help a sympathetic constituency: people struggling to buy their first home. But the reality is that the credit would likely do little more than spur inflation in the housing market by benefiting current owners and developers at the expense of future buyers who will have to face higher prices, erasing the benefit of the subsidy.

This isn’t just a Democrat problem. An example of analogous behavior on the right is continued Republican support for the mortgage interest tax deduction. This program hands government dollars over to homeowners based on the size of their mortgage. And it’s rich Americans who tend to have bigger mortgages and therefore get a bigger handout. On one hand, the mortgage deduction is in line with the Republican principle of small government and low taxes. But on the other hand, generously subsidizing home ownership financed by debt distorts the function of an entire real estate industry, undermining the long-celebrated belief that a free market can most efficiently and fairly set prices and allocate scarce resources.

When these policies are sold as being part of either a conservative or progressive agenda, it makes it harder than ever to be a principled vote on the issue of the economy. Voting along party lines might not get you as far as it used to in terms of aligning your vote with a particular set of values, especially on economics.

Both the right and the left have adopted their own policy projects that clash with their historical values.

Economics is a vast and complex field. But one simple way for voters to evaluate policy using an economic lens is to consider whether an individual or a collection of policies is intended to redistribute or grow the nation’s wealth. Progressive-minded voters tend to be more keen on policies that redistribute the nation’s wealth, whereas conservatives tend to prioritize policies that support growth. While policies can rarely produce growth directly, they can often create an environment that supports or constrains growth.

The classic and perennial example of pro-growth policy is cutting taxes. Reducing the burden of taxes on income or businesses increases the reward of working or generating profit. The assumption is that people and businesses will work harder if they are able to keep more of the fruits of their labor. It’s that “working harder” that will ultimately amount to more growth in the economy. A faster growing economy means more for the government to spend on social programs to help Americans in need.

In contrast, other voters will prefer candidates and platforms that are more focused on redistributing the wealth our nation currently generates rather than on growing the economic pie. Redistributive policies are really anything that has the government collecting tax dollars to hand back in the form of subsidies, tax credits or spending on targeted programs. That’s because the “distribution” of wealth changes as a result of these sorts of interventions. Examples of redistributive policy include spending on social welfare programs like Medicaid, which provides health care for low-income Americans, and Temporary Assistance for Needy Families and student loan cancellation.

Voting along party lines might not get you as far as it used to in terms of aligning your vote with a particular set of values, especially on economics.

Using this dichotomy of growth versus redistribution can help Americans see beyond the rhetoric and choose candidates and policy ideas that better match their own values. This exercise will be especially important in November, as neither candidate is adhering very strictly to the values historically celebrated by their party.

Student loan cancellation is supported by Harris, but student loan cancellation, a redistributive policy, isn’t about shuffling funds from the “haves” to the “have-nots.” Instead, like the mortgage interest deduction, it’s a giveaway to an already affluent population who take out loans to attend the most expensive schools. Since it will cost as much as $1.4 trillion to execute, it would require a future tax increase to cover the cost, which would also discourage growth.

Harris also supports policies to prevent what she calls “price gouging.” Her position preys on the insecurities of Americans who have endured rising prices at the grocery stores and gas pumps in recent years, but doesn’t amount to sound economic policy. Constraining businesses on the price they charge isn’t a new idea, but it’s usually one that’s historically been employed in places whose economies we wouldn’t want to emulate. (Think Venezuela, Cuba, North Korea and the former Soviet Union.) Additional regulation on prices will discourage businesses from getting or staying in the game — a development that will ultimately cause harm to consumers who would otherwise benefit from healthy competition. On net, it will discourage innovation and growth.

Republican nominee former President Donald Trump also seems to be breaking with the historical economic vision of the Republican Party in supporting a platform of isolationist policies. As described in a 16-page document outlining the party’s priorities, Trump would likely embrace policies that limit outsourcing and require, or at least encourage, domestic production of manufactured goods. There may be strong arguments for policies that sometimes restrict the movement of goods and services across borders, but they come at the expense of limiting growth. The reason outsourcing and offshoring happen in the first place is because building things overseas is often better for the bottom line. And what is good for the bottom line is also good for growing the economy.

Perhaps more concerning, from a conservative perspective, is that Trump has suggested making the Federal Reserve Board, which has historically conducted monetary policy to promote economic growth and stability independent of the political process, a political institution. While Trump claims that his monetary policy would be superior to the policy advanced by the independent Federal Reserve, he would likely be tempted to advance policy that would reflect positively on his administration rather than prioritizing long-run growth. That’s not a dig at Trump in particular. The fact that politicians are somewhat self-interested is the reason for an independent Federal Reserve in the first place.

Like me, most voters care deeply about more than one issue. So, the tradeoff between redistribution and growth might be just one small piece of a bigger puzzle that voters will face in deciding how to cast their votes this November. But at least by using this framework to evaluate economic policies, voters can get a better handle on what their candidate prioritizes when it comes to the economy and can cast their vote accordingly.

Beth Akers is a Senior Fellow at the American Enterprise Institute and a contributor at Sutherland Institute.

This story appears in the October 2024 issue of Deseret Magazine. Learn more about how to subscribe.