Monday, July 20, 2015

Partisanship overcomes voters’ economic self-interest

Published in Standard Examiner, Ogden, Utah, June 30, 2015

Guest commentary

A significant number of Americans faced severe hardships during the recession of 2007-08 due to loss of jobs and homes. Many also suffered from the loss of their employer-based health insurance. Among those who have been lucky enough to find full-time jobs, many are not getting well-paid jobs and are facing stagnant growth in wages and benefits. There is also a trend in the labor market to hire contract workers, which are on-demand. The Economist labels them as “Workers on tap.” Such workers must make themselves available to provide services to different employers, and neither workers nor employers who use their services have any long-term commitment to each other.

These technologically driven on-demand jobs undermine work, family and locational stability, trust and allegiance to a particular employer, and perhaps ultimately productivity and growth. Even though Americans are concerned about their economic future and issues such as health care, income, wealth inequality and minimum wage, they do not seem to elect political representatives who support economic policies that benefit them. Therefore, the question is why do Americans elect such representatives?

One possible answer may lie in the psychological theory of cognitive dissonance. George A. Akerlof and William T. Dickens in a paper, “The economic consequences of cognitive dissonance” (American Economic Review, June 1982), present three propositions of this theory. First, people have preferences over different outcome scenarios in the economy but also over their beliefs about those outcome scenarios. Second, given information people can control their beliefs by making choices, as well as “manipulate their own beliefs by selecting sources of information likely to confirm ‘desired’ beliefs.” Third, the choices they make on beliefs tend to persist over time.

It is apparent from these propositions that American voters, while voting for their candidates, are governed by their belief system that is confirmed and proliferated by their political parties, their leaders and the sources of information chosen by them.

This partisan divide has been documented in a study, “Fear and Loathing Across Party Lines: New Evidence on Group Polarization,” June 2014, by Stanford University political scientist Shanto Iyengar and Princeton University researcher Sean Westwood. Iyengar and Westwood show that voters belonging to a party not only have ingrained hostility against the opposite party (out-group), but “party cues exert a powerful effect on non-political judgments and behavior.” This divide has worsened since 1980.

Iyengar and Westwood (IW) also find that partisans are poorly informed about policy positions of the party leaders, thus it is not surprising that they trust their party position even though it goes against their own economic self interest. In such a partisan environment there is hostility to economic policies advanced by the other party, even though there is agreement on the sources of problems and its solutions. IW find that, in the current partisan divide, animosity towards the out-group sends a disapproval signal to elected representatives who are willing to work across party lines. They risk being considered “appeasers.”

Leadership has to emerge to stop the vicious circle of partisanship. Leaders in both parties must forego their self-interest of being elected in order to promote self-interest of the country. Even President Ronald Reagan, who is admired by conservatives on the right and who was vocally against big government, worked with the Democrats in raising taxes, simplified the tax code, implemented temporary fix to Social Security and reform of the immigration system.

Conservatism and liberalism do not require believers in their own principles to be partisan. Leaders in the Congress have to learn to engage in the art of compromise and work across party lines to enact laws that maximize the welfare of all Americans, conservative and liberals alike. Unless leaders demonstrate through their actions that they are willing to work cooperatively with the other party to deal with the nation’s pressing issues, the general electorate, guided by their economic interests, should vote against such leaders to break the vicious circle of partisanship.

President Reagan once remarked in a speech, “Freedom is the right to question and change the established way of doing things.” I am sure voters are familiar with the gridlock in Congress on party lines on immigration, tax reform, health care, budget etc. Perhaps voters should heed President Reagan’s advice to change the status quo while exercising their freedom to vote.

Mathur is former chair and professor of economics and now professor emeritus, Department of Economics, Cleveland State University, Cleveland, Ohio. He resides in Ogden.  This is online version in  Read Print version, July 2, 2015

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