Thursday, May 03, 2007

Governing Trends

Tonight on Kudlow and Company, Larry Kudlow and a legion of commentators discussed the 2008 election. One of them, John Fund from the Wall Street Journal, expressed concern that many voters haven't experienced a true economic downturn (only corrections and short-run recessions). Thus, they are more likely to vote Democratic.

It makes a lot of sense because it's easy to forget that good times won't last forever and more government can undo economic growth in an instant. Democrats, who are more likely to grow the government than Republicans (especially with a Democratic Congress) can hamper the very growth that got them elected.

I've often said that from the mind of the voter, government is a luxury good. All things being equal, a wealthy society is more interested in growing the government than a poor society. While wars and other crises confound this rule, in general people are much more willing to see the government grow when they are making a lot of money themselves. It's a dangerous trend because it's easy to get trapped in: governments are easy to grow and difficult to shrink.

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