An observant friend asks a good question: “Gov. Tim Pawlenty has taken over the task of announcing job numbers in recent months. Is a voter to conclude that the gains are his doing?”
The answer to my friend’s question is no. A governor has very little to do with either the number of people who have jobs or with the unemployment rate. Even so, the current governor of Minnesota, who is running for re-election, is very media-savvy and skilled at associating himself with good news.
Historically, the Minnesota Department of Employment and Economic Development released this data in a nonpartisan press release designed to uphold the credibility of the research. The U.S. Bureau of Labor Statistics follows the same practice.
Pawlenty is hardly alone in seizing the opportunity to release good news. Elected officials of all parties try to convince voters they accomplished all sorts of things, when in fact, these accomplishments resulted from other factors. This has been the rule for decades, if not centuries.
An evolutionary perspective provides insight. Pawlenty is a successful politician. So is U.S. Rep. Collin Peterson, D-Minn., whose campaign ads imply that the Medicare drug benefit resulted solely from his efforts. If successful politicians claim more credit than is due, then it must be a winning strategy. The degree to which it is successful is in some way a measure of how badly educators and journalists have failed to inform the public.
This is not an argument that government does not affect the economy in any way or that political leadership is irrelevant in how economies perform. Nor is it an argument that individuals never play key roles in passing important legislation. It is just that such linkages usually are significantly less important than politicians claim.
The causes of economic growth and prosperity are complex. They include availability of labor and other resources, technological change, savings rates, political factors such as peace or war, the legal and institutional environment in which economic activity occurs and the centuries-old fluctuations in economic activity that we now call the business cycle. Discretionary acts by government also play a role, but it is a minor one.
Within government, central banks that control the money supply and inflation are more important in determining economic performance than the executive or legislative branches. Between these elected branches, Congress has greater influence than most people think and the president has less.
Finally, in our federal system of government, what happens in Washington is far more important in economic terms than decisions made in St. Paul, Madison, Wis., or Boise, Idaho. And within state government, legislatures remain more important than governors in terms of influencing economic outcomes.
Yes, it does take two to tango at the state and national levels. Governors and presidents can submit bills to the legislative branch. They can sign or veto legislation passed out of the legislative branch. They can use the unique visibility of their offices to influence public opinion and legislative outcomes. And they do, in varying degrees, control how policies are implemented by Cabinet-level federal departments or various state agencies.
Governors and presidents can lead legislative horses to water, but they cannot make them drink. Moreover, most of the economic effects of federal and state legislation generally work out over several years and have little impact in weeks or months.
Some of the legislation that had the greatest impact on the U.S. economy in the long run was not directly “economic” in the sense of ordinary tax and spending bills. Two such programs were the Morrill Act, which established land-grant colleges, and the post-World War II GI Bill that paid for college for veterans, among other things.
Working down the branches of private sector vs. government, legislative vs. executive and state vs. federal, the influence of any governor on job numbers or unemployment rates is minuscule.
But the influence of legislators or members of Congress on specific legislation might be more direct. A few key senators and representatives possess great power in passing or blocking legislation. Moreover, individual representatives can assert their yes or no votes on certain bills as clear evidence of how they have served their constituents.
It is also true that individuals in Congress might achieve small changes in details of a larger bill to benefit their constituents. And they can succeed in granting or withholding their votes to leverage federal spending in their districts. Democratic Sen. Robert Byrd of West Virginia and former Sen. Frank Murkowski, a Republican from Alaska, were masters of the art of rolling large barrels of pork back to their home states.
Be wary when any member of Congress claims major credit for a specific bill. Congress consists of 435 representatives and 100 senators. All can vote, but few individual votes are decisive, and most legislation gets passed as a result of the efforts of many different members.
In an election year, voters should be extremely wary of any candidate who claims significant or sole credit for any specific law or for how the overall economy is performing.
The acid test for Pawlenty will be whether he continues to announce new figures if employment levels drop or the unemployment rate rises.
© 2006 Edward Lotterman
Chanarambie Consulting, Inc.