The Economics of Politics

After just a few minutes of watching MSNBC, the phrase already started poking through as the Republican National Convention kicks off today. We all hear them but don’t really take the time to ponder all their hidden meanings, my favorite being “the party faithful,” sometimes just referred to as “the faithful.” For this 100th post, I thought I’d take a special moment to discuss the economics of politics instead of the politics of economics. So let’s look at the faithful.

Like any economy, the essence of it doesn’t lie with just a few individuals; it’s with the collective group of active minds. Our economy is powered by thousands, nay millions, of countless CEOs and small business owners. Our politics is similar: the ultimate power sits with the people that support a person, not the person himself (something Richard Nixon learned the hard way). But some CEOs are more powerful than others. The Bill Gateses and Ted Turners of the political world set the tone, the campaigners accept or reject it and everyone else (the party members and workers) produce it to be sold to everyone else. Selling policies is like selling sandwiches.

This is why there’s so much talk about the faithful; because the Convention isn’t for the voter, it’s for party members. It’s to get them rallied up for the election. It’s a retreat; the nomination, a formality; the platform, the mission statement. It’s not for us—if it were they would be held the week before the election so both sides would try to ride the boast in favor on Election Day.

But this is where the similarities turn on their heel. Politics is an all or nothing game and there’s too much at stake to try something new. You gather all the faithful and tell them what you know they want to hear to get them moving. You dare not try a new idea because the chance of it failing is too high. Corporations try new products all the time and most of the fail. But because they can grab a little bit of market share, their cut their losses. But if a politician catches 49% of the market share, he’s a giant loser (assuming majority rules). Politicians are risk-adverse—really risk-adverse—which is why I’m more likely to watch a new commercial than either the DNC or the RNC; I’m far more likely to see something new. The conventions just aren’t for me.