When comes the political reckoning?

As the Covid-19 pandemic hits the economy with full strength in the second quarter of this year, one has to wonder if politicians have to pay a price for inept leadership during this crisis. While the leadership in the UK, Germany and other countries in Europe has generally been up to the task and did all they could (and sometimes more) to help the healthcare system and its populace, there has been a significant lack of leadership in other countries, most notably in the United States, where the Federal government has stepped up very late to the plate and state governors were basically left alone for a long time to deal with their issues. Yet, the approval rating of Donald Trump has risen in recent weeks.

Approval rating of Donald Trump

Source: FiveThirtyEight.com

There have been many studies about the effect of economic crises on voting behavior but when it comes to the question if a crisis is helpful or not to the incumbent, the results are mixed. A review of the impact of economic shocks on voting behavior published in the Annual Review of Political Science found that there is only a mild effect on voting behavior and even that seems transitory. The closer the shock to the election, the bigger the impact. 

Now, we do have a Presidential election coming up in the United States in November and the question everyone seems to ponder is if this will impact the re-election chances of Donald Trump. David Runciman, a politics professor at Cambridge University, has a highly recommendable article in the London Review of Books where he lays out the arguments in favour and against an impact of the Covid-19 pandemic on the Presidential election. 

Personally, I think that politics has become so tribal in recent years (a result that has been borne out by many studies) that voting for the candidate of the other party has become something that many voters would never do. It is more important to preserve one’s sense of identity. Thus, there is a smaller and smaller group of voters that are willing to switch sides, which is why approval ratings remain stuck in a narrow band, no matter what happens.

There are voters that will be influenced

But there is a small, but important group of voters that will be influenced by the current crisis: young voters. There is a series of studies that looked at the impact recessions and other economic shocks had on people during different times of their lives. Giuliano and Spilimbergo were the first to document that experiencing a recession during the impressionable years (age 17 to 25) does not lead to a shift in political affiliation, but it creates a significant loss in trust in government and a significant shift in favour of redistributive policies and the need for government to help the poor. This is something we have witnessed already after the global financial crisis of 2008 and now the next generation of people experience a similar economic shock.

Preference for redistribution policies and GDP growth during impressionable years

Giuliano and Spilimbergo (2014). Note: Birth year is given for each cohort in the chart.

Thus, just like the late baby boomers and the early Gen X who experienced the low growth era of the 1970s gave rise to a renewed appeal for social democracy in Europe as well as the original green movement, we should expect topics like Universal Basic Income and other redistributive policies to become more mainstream in the coming decade.

In the United States, this drift towards a bigger role for the government to help the poor has interestingly not happened in the United States during the 1970s and 1980s. One reason may be that the US does not have the same public safety net as European countries. A recent study by Anja Neundorf and Stuart Soroka showed how attitudes towards government redistribution changed with the introduction of the NHS and other social safety nets after World War II. Examining the social attitudes of almost 55,000 Brits they found that people born between 1916 and 1949 have a higher preference towards redistribution if they experienced good economic times during their youth, while the relationship dramatically shifted for people born after 1949. The argument is that before the introduction of a government-sponsored social safety net, the moral code in society was that rich people have an obligation to help the poor. After the introduction of social safety nets, this moral obligation was shifted to the government at which point people who were more fortunate in life could abandon their duty to help poorer people and people in need. As a result, the people who experience hardship and difficult economic times in their youth have to rely more on social safety nets and experience first hand their value – and then become more of a champion for the expansion of these safety nets. 

Given that in the United States this is now the first crisis materialising after the introduction of the Affordable Care Act (ACA) that provided access to health care for a large portion of the population, we should expect the cry for universal healthcare in the United States to become very loud indeed. Politicians who jump on that bandwagon or have done so already will be the winners of the coming political shift in the United States.

Attitude towards government redistribution

Neundorf and Soroka (2018).