Tag Archives: the economy

It’s Their Happiness, Stupid!

Source: The Economist

Gulf Shores  James Carville’s quote in the Clinton campaign “war room,” that “it’s the economy, stupid!” will be in his obit.  I’ve read one report that argued that Trump would be re-elected, regardless of his polling numbers and approval ratings, if growth was above 3% in 2020 before the election.  The notion that economics drives politics has an almost ideological weight no matter what the form of government and whether in the USA and India or China and Russia.  One could argue that in this area, inarguably, Marx was right.

What explains the support for radical, far right politicians and parties all around the world even when economies have improved?  Some now argue it’s as much, if not more, about happiness and personal perspectives on well-being, as it is about economic security and expectations.

The Economist really took on this question.  They started by referencing a study by George Ward of MIT, where he,

“…confirmed the political significance of happiness. He looked at what best explains the variation in the incumbents share of the vote in 15 European elections between 1973 and 2014.  Life satisfaction, he found, was twice as important in explaining how incumbents did as the unemployment rate and about 30% more important than GDP growth.  Ward also found that…almost half of those who were very satisfied with their lives said they would vote for the incumbent while less than a third of those who were not at all satisfied would.  Research from America suggests that happiness has as big an effect on voting patterns … as education.”

Now that’s interesting.  It aligns to some degree with the increased importance pollsters and pundits have placed on right track versus wrong track surveys of popular opinions about the direction of the country that are also decoupled from pure economics.

The Economist, being a conservative-leaning, business-supporting journal, is worried about this, especially in the face of one rightwing party after another in Europe and politicians like Trump and Ford in North America being elected despite improving economies.  Additionally, they, and others like-minded, are confused that older people rather than becoming more settled and satisfied after reaching the age of 60, are raving mad and throwing their votes into this same radical fire.

They raise the distinction between “evaluative” versus “hedonic” happiness being important.  Evaluative looks at how you view your life today.  Hedonic responds to how you felt yesterday.  Measures including the World Happiness Report see an upswing towards hedonic happiness confronting politicians that have always assumed evaluative happiness was the ticket to ride.  Some US polling indicates that the results of basketball and football scores for favored teams can alter voting patterns in this way.  In Switzerland, rain can throw governments under the bus.

Maybe this isn’t new, because the real deal may be how unhappy people feel when they feel things are getting better, but that they are being left behind, which is certainly part of what Trump is banking on.  The Economist notes that would not be new.  Seymour Martin Lipset noted the contradictory surge for the Ku Klux Klan during the boom times of the 1920s in the US.  More contemporary work from economists in the Netherlands found growing support for the radical right in Europe from those feeling slighted.

Maybe it’s not enough for politicians to just line the pockets of the rich, and then for them to tweet and Instagram their good times.  If looking differently at happiness makes politicians look at all of the folks left behind, not just the rightwing shouters, it would be a great thing for all of us on the bottom.


Foreign Aid is Minor Money, and Privatizing and Subcontracting Relief Assistance is Big Business

New Orleans   Survey after survey indicates that Americans believe that a huge percentage of the US budget and their tax money is spent on foreign aid. The Kaiser Family Foundation in a survey found the average respondent thought that more than a quarter of the national budget – 26% – was spent on foreign aid and therefore more than half felt it should be cut back.

In truth, only about 1% of the annual budget is spent on foreign aid of all types and that number relative to US Gross Domestic Product and the level spent by other countries is relatively low. Furthermore, in a detailed analysis of the foreign aid budget done by the Washington Post in late 2016, foreign aid is absolutely not some kind of welfare handout to other governments. Of about $42.4 billion in total aid, in fact almost $17 billion, in the broad category of “security” include supporting the training and development of both Afghanistan and Iraq military forces, where the country is still actively at war. Other big piles are spent to support counter terrorism, drug control, international narcotics and law enforcement and the like. Hard to believe the same American tribes that back more military expenditures would begrudge these expenditures of aid.

The other $25.6 billion falls under Economic and Development with more than half spent on global health projects, where Americans received direct benefits, and economic support, where we receive indirect benefits. In these polarized times, many get their heads screwed on wrong thinking much of it is going to help the global poor who should be bootstrapping their way forward on their own or some such. It’s actually even less. A billion goes towards the Millennium fund where the UN and a number of countries are trying to end poverty. Less than $2 billion goes to Food for Peace. $3 billion is development assistance. And, where the rubber hits the road, $2 billion is for disaster relief and $2.8 billion is for international migrants and refugees. In a $4.15 trillion budget, relatively speaking, that’s chump change.

When you look closely at those kinds of expenditures handled by outfits like the US AID, Agency for International Development, it turns out a lot of the delivery of aid has been privatized and subcontracted as well. The Economist in a study found of a half-billion in aid contracts, 70% had been handled by private companies. Nearly a quarter of all USAID spending in 2016 went to for-profit firms, two-thirds more than was the case in 2008 when Obama was elected. Most of these firms are getting their jobs at auctions, rather through grants. Much of their work is through subcontracts rather than having boots on the ground. The Economist also found that of 4500 subcontractors, a third of them were for-profits and the rest were nonprofits and governments. At the bottom line even the “softer” part of our foreign aid is often supporting American companies and nonprofits and not foreign governments, and under any circumstances its pretty miserly compared to the riches of America and a long way from a handout or welfare.