A new ad by John McCain alleges we are worse off than 4 years ago. I can’t say that I disagree with that as a factual statement. Certainly my part of the economy (financial companies generally, that is – insurance to a lesser extent) is in worse shape in 2008 than it was in 2004, and recent GDP figures suggest that the economy as a whole is, too. Of course, it’s one thing to ask how the economy is doing, and quite another to ask what, if anything, government ought to do about it. Crediting politicians with booms and blaming them for busts is an age-old tradition, but that doesn’t make it accurate or fair. Yes, Carter did a lousy job on economic issues (along with practically everything else) and yes, Reagan’s fiscal policies, particularly with regard to taxes, were much better. Did that change in policy affect the move from stagflation to a booming economy? Sure, but the key word is affect, not effect. In other words, the change in policy played a role in improving the economy, but it didn’t account for all of the improvement or even most. An early Reagan Presidency likely would have left the 1977-80 economy in better shape than what actually existed in the Carter years, but it wouldn’t have brought the boom we saw in the early to mid-1980s and beyond. Most of that was the result of activities on Wall Street, not at 1600 Pennsylvania Ave. (though those helped).

Good vs. bad policy alone can’t explain everything, or even most things, about the economy. If it could, the elder Bush would have had no trouble delivering on the “four more years” pledge simply by operating on autopilot, with no need (real or imagined) to go back on his infamous “read my lips” pledge, let alone the inevitable 1990-91 recession, which Bush himself denied at the time that it occurred, and which everyone else thought we were still living in more than a year and a half after it ended. As for the younger Bush, I don’t doubt that our economy now is currently weaker than the one he defended four years ago, albeit stronger than the one he inherited four years before that. But the real question, politically, is not whether we’re better or worse off in 2008 than we were in 2004. It’s whether we are better or worse off in 2008 than we would be in 2008 if the Swift Boat Veteran Against Truth were in the White House. That’s a very different question, I think, but it’s the only question we should ask when considering the political implications of a good vs. bad economy, as opposed to merely discussing the economy as a topic in its own right.