It's not just the economy!

Governing parties and leaders have crashed across the OECD countries in the prolonged and unfinished aftermath of the 'Great Recession,' and if Larry Bartels is right, the state of the economy explains everything. If you want to know how much vote share an incumbent party will lose, just look at the GDP growth in the two years before the election, particularly the last year. Everything else is noise. Indeed, growth had to average about 4 per cent a year for an incumbent party to be spared the voters' wrath. That leaves a pretty exclusive club of Estonia, Finland, Sweden and the Slovak Republic.

Bartels' analysis predicts Obama will get exactly 50 per cent of the vote, down from 53 per cent in 2008, while David Cameron will certainly not be comforted with the need to achieve 4 per cent growth in the last two years of this government to get into the elite club of survivors. In such times, I think we can count on Messrs Cameron and Clegg doing everything possible to avoid early elections.

Even though I will dispute the conclusion that economic performance is everything and its implications for Labour in Britain and the Democrats in the United States, I come away from Bartels' important work and similar research on US presidential elections awed by the power of the economy, especially in this period of deep economic stress. The economy has taken down virtually every major leader. There is nothing more important, that is clear.

There are, however, areas where I take a different point of view.

Bartels is critical of my analysis of the period after the Great Recession on two issues: that the left has faced greater voter wrath than the right; and that other factors, like the party's ideological positioning, affect electoral outcomes. He quotes an article titled 'Why Voters Tune Out Democrats', which I wrote for the New York Times, that stated that I found it 'perplexing' that 'many voters in the developed world are turning away from Democrats, Socialists, liberals and progressives'. I was writing before the full scale of the electoral carnage unfolded but I still think the evidence supports the left taking a disproportionate hit and still have good reason for my perplexity about why voters have not turned to progressive parties in times like this. Let me explain why.

How the left has fared worse

The empirical evidence does not suggest that the right and left are hit equally by the economic downturn. On the contrary, it points to the left faring worse. Bartels' calculations in his full essay show left incumbent parties lost four or five points more vote share than right parties off their previous run (6.8 per cent to 2.2 per cent) - but taking into account that left governments faced worse economic conditions, the gap narrows to three or four points. But because of the small number of cases in the study, he concludes 'the standard errors of the parameter estimates are too large to attach much significance to this difference'. It is striking that Bartels decides to ignore this difference, and conclude that 'there is surprisingly little evidence of any systematic electoral shift in favour of either left-wing or right-wing parties'.

One of the pioneers of this work, Professor Ithiel de Sola Pool at MIT, would ask seminar participants including myself this: if you were betting on the election and had access to only one piece information - a survey with one candidate enjoying a statistically non-significant four-point lead (52 to 48 per cent) - where would you put your money? For perspective, had Labour's vote in 2010 only fallen in accordance with Bartels' model, they would have formed the government.

Why ideology still matters

What I really found perplexing in my New York Times article was not that the left seemed to fare somewhat worse than the right in this period, but that in this financial crisis voters did not favour parties of the left. 'When unemployment is high, and the rich are getting richer,' I wrote, 'you would think that voters of average means would flock to progressives, who are supposed to have their interests in mind - and who historically have delivered for them.'

That produced Bartels' critical response: 'Greenberg's perplexity is understandable if one supposes that voters are animated by the same ideological understandings that are commonplace among political elites, including most journalists and activists.' Voters are 'mostly inattentive to ideological manifestos' and inattentive as to who, historically, has 'delivered for them'.

Yet, unfortunately Bartels' own analysis disputes this dismissive conclusion. Yes, the economy is the biggest factor by a lot, but his own evidence shows the factors people are 'mostly inattentive' to can make the difference between winning and losing. 'Mostly' is not 'entirely' and in a tight race, that matters.

Bartels recognises that the Democrats ran worse in the US off-year elections than would be expected from the state of the economy alone, but does not regard this as a significant challenge to his overarching analysis. His view is that this result is not because of their ideological orientation but because of 'policy choices largely unrelated to the economic crisis.' Citing studies that looked at votes cast by members and the results in their districts, he found that a Democratic incumbent lost 2.8 per cent vote share when he or she supported the $787 billion stimulus (partially offset by the economy's better performance from the actual stimulus), lost 2.1 per cent for the cap-n-trade energy bill, and 4.5 per cent for the new healthcare reform law.

That is an odd conclusion, dependent on these 'policy choices' being considered separately from the members' ideological orientation. But understand that Democratic candidates paid a major electoral price in this analysis for supporting the signature policies of a progressive government in the United States, policies that that defined the government's worldview. It is pretty hard not to conclude in the US that Democrats, though hurt most of all by the economy, were also penalised for their ideological orientation in the 2010 elections.

If the losing Democratic members took back those votes on these three parts of the Obama agenda, Bartels reports, Democrats would have gained back 32 of the lost seats and held their majority in the House of Representatives. No Tea Party victory.

To underscore the notion that the economy trumps ideology in national elections, Bartels challenges 'the conventional belief that the 1936 election constituted a referendum on the role of the federal government in the American economy and society'. His analysis underscores the role of the improving economy in the years leading into the 1936 election, but it ignores the fact that the 1936 result affirmed electoral shifts that were in formation from 1928. Those shifts produced a coalition of voters that called themselves 'Democrats' because the party supported 'the working man' rather than 'the [plutocrats]' and governed from 'the bottom up,' in Roosevelt's terms. This coalition endured for three decades, giving Democrats congressional majorities and hegemony in ideas that led Republican Presidents Eisenhower and Nixon to expand entitlements programs, public investment and regulation.

If you accepted Bartels' analysis, furthering your political project would recede in favour of getting the growth right. That would have proven dangerous for Conservatives and Labour in Britain and Republicans and Democrats in the United States.

Why electorates have not turned to left parties

For my part, it is even clearer now that the left has to address why it has not produced the parties of choice in the aftermath of the 'Great Recession'. A clue is likely in the essential cause of my perplexity - that the Democratic party was supposed to be a party for working people that governed on their behalf. But left parties in nearly all OECD countries before the financial crash were actively modernising labour markets and freeing up financial services to some extent - policies that I often worked to advance. In the United States, the nexus of Wall Street and Washington, campaigns awash in money and the expanded role of lobbyists seem to deny that government worked for average people. In Britain, similar patterns are playing out, with the MPs' expenses scandal and now the phone-hacking scandal obscuring politicians' work on behalf of people.

When the financial crisis threatened to take down the economy, the banks were bailed out in many countries, while ordinary mortgage-holders struggled everywhere.

And before the crisis in most OECD countries, governments lived with stagnant or declining incomes and increased inequality without stopping the merry-go-round. Elites appeared to promote globalisation and economic integration, while not examining the effects on working people. The inattentiveness of governments to national borders was most apparent on immigration where governments of left and right seemed to lose control of the character of the country, as voters saw it. Anti-immigrant and anti-Islamic parties surged at the expense of the mainstream left and right parties in France, Austria, Italy, the Netherlands, Sweden and Norway.

In the UK, I learned from independent focus groups I conducted during the 2010 election and a post-election survey that it is hard to understate the level of anger about immigration - immigration and benefits, immigration and public spending, immigration and crime. In voters' view, Labour on its watch over many years had lost control of immigration, with major consequences for the country and living standards of working people.

'Government operates by the wrong values and rules, for the wrong people and purposes,' I wrote when exploring my perplexity over voters' response to the economic crisis. 'Government rushes to help the irresponsible and does little for the responsible. Wall Street lobbyists govern, not Main Street voters.'

It is the left that pays more of the price for not getting government right. That is the political lesson of the 'Great Recession'.

Stan Greenberg is a leading Democratic pollster and political strategist. He advised Bill Clinton, Tony Blair and Gerhard Shr?der and continues to work for Democrats and centre-left parties around the world, including in the UK. His latest book, It's the Middle Class Stupid!, co-authored with James Carville, was released last week.