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What did this “stress test” reveal about the characteristics of the American political system? For both better and worse, much of what happened was surprisingly consistent with the patterns of politics and policy-making described in the preceding chapters of this book and in the broader political science literature. Politicians continued to be driven in significant part by their own ideological convictions; the distinctive views of affluent citizens and powerful economic interests continued to seep into the policy-making process in ways that the policy-makers themselves may not have fully grasped; and ordinary citizens responded with cautious pragmatism and a single-minded focus on their own concrete well-being.

As one might expect based on my analysis of partisan differences in policy aims and priorities in chapters 2, 5, 6, and 7, Democratic and Republican elites took sharply divergent stands on most of the specific policy issues raised by the crisis, including the magnitude and composition of an economic stimulus package, extensions of food stamps, unemployment insurance, and other safety net programs, the use of government funds to bail out struggling auto companies, the possibility of a payroll tax cut, and the question of what (if anything) to do about an escalating federal budget deficit. The partisan conflict extended to many other areas less obviously related to the crisis, such as health care reform, energy policy, and immigration. In all these cases, Democrats generally supported and Republicans consistently opposed policies that were likely to shore up the incomes and economic security of middle-class and poor people.

The mirror image of Emanuel's rather-too-transparent eagerness to leverage the economic crisis to “do big things” came a few weeks before the 2010 midterm election, when Senate Minority Leader Mitch McConnell told an interviewer that “the single most important thing we [Republicans] want to achieve is for President Obama to be a one-term president.” As with Emanuel's policy aspiration, McConnell's electoral aspiration was hardly shocking. (One journalist sarcastically referred to it as “Fall-off-your-chair political surprise No. 1,” and the White House's indignant response as “Fall-off-your-chair political surprise No. 2.”) Nonetheless, Democrats seized the opportunity “to portray Mr. McConnell's remark as the latest example of a Republican Party more committed to obstructing the president's agenda” than to “governing the country.”⁴

The fact of the matter is that Emanuel's boss did “do big things,” including some that were only tangentially related to the economic crisis. On the other hand, while McConnell and his Republican allies did not succeed in making Obama a one-term president, they did have considerable success in “obstructing the president's agenda,” significantly limiting the scope of his policy accomplishments. In both respects, the politics of the Great Recession clearly reflects the partisan ideologies—and the considerable freedom to pursue those ideologies—evident throughout this book.

Of course, nothing of the sort actually happened. Public opinion moved—insofar as it moved at all—to the right, not to the left.⁶ The public's reaction to the crisis and to the Obama administration's response was one of skeptical pragmatism. On one hand, the slow pace of recovery created significant public resistance to the president's policy initiatives; the counterfactual argument that these policies were preventing a much worse economic slump seemed to have little political traction. On the other hand, the perception that Obama and Democrats in Congress were pushing to “do big things” in a remarkable variety of policy domains provoked a reaction familiar to scholars of public opinion: slow down! The primary manifestation of mass political mobilization in response to the recession, the Tea Party movement, harnessed right-wing populism in opposition to big government, bailouts, high taxes, and public debt. The 2010 midterm election proved to be an electoral debacle, decimating Obama's Democratic base in Congress and further constraining attempts to legislate an end to the Great Recession.

Should any or all of this have been surprising? Certainly there were mixed signals before the crisis regarding the likely response of the American public to aggressive policy action. A 2006 survey of views about the “Role of Government” found substantial public support on the eve of the Great Recession for two key “things the government might do for the economy.”⁷ On one hand, the respondents favored “cuts in government spending” by an overwhelming margin of 63% to 13%.8 On the other hand, the same people favored “government financing of projects to create new jobs” by an even more overwhelming margin of 85% to 7%.⁹

To economists and policy-makers, “government financing of projects to create new jobs” and “cuts in government spending” may seem like very different—even contradictory—approaches to macroeconomic policy-making, but these ordinary citizens happily (and simultaneously) embraced both stimulus spending and austerity. This apparent contradiction is compounded by responses to another battery of questions in the same survey, which asked about spending on a variety of specific government programs. The same people who overwhelmingly favored “cuts in government spending” also, just a few minutes later, overwhelmingly favored increases in spending on the big-ticket social programs that account for most of the federal government's budget, including health (by a margin of 80% to 6%), education (84% to 4%), and retirement (65% to 7%).¹⁰

To complicate the picture still further, overwhelming public support for social spending coexisted with rather limited support for direct government action in the realm of economic redistribution. Additional questions in the same survey asked whether it should be the government's responsibility “to reduce income differences between the rich and the poor” and “to provide a job for everyone who wants one.”¹¹ These propositions referring specifically to “the government's responsibility” generated much less support than the social spending questions, with the public as a whole favoring income redistribution by a razor-thin margin of 51% to 49% and opposing government provision of jobs by a margin of 60% to 40%.

Perhaps surprisingly, these class conflicts in views about government and the welfare state were a good deal more intense in the United States than in other affluent democracies on the eve of the Great Recession. In the case of views about budget-cutting, the U.S. income gradient in figure 9.1 spanned 46 points on the −100 to +100 scale (from +8 at the bottom of the income distribution to +54 at the top), while the income gradient in other affluent democracies was essentially flat (ranging from +29 at the bottom of the income distribution to just +32 at the top). The income gradient in net support for social spending spanned 36 points in the United States but only 14 points in other affluent democracies. Support for welfare state effort (equalizing incomes and providing jobs) varied by a remarkable 86 points in the United States, compared to 57 points in other affluent democracies. Thus, as governments around the world faced the momentous choice between spending and austerity in the wake of the Great Recession, the disparate responsiveness of policy-makers to the views of affluent and poor citizens documented in chapter 8 would have much greater substantive policy consequences in the United States than in other affluent democracies.¹³

Perhaps voters were unmoved by the financial meltdown because, even after the collapse of Lehman Brothers, they still did not seem to grasp the likelihood of a prolonged recession, much less the possibility of a full-scale global depression. The American National Election Studies survey conducted between Labor Day and Election Day found 90% of the public saying that the national economy had gotten worse over the past year—but only 30% predicting that it would get worse over the coming year, while 27% expected it to get better.¹⁶

Nevertheless, Obama's historic election in the midst of an economic crisis suggested irresistible parallels with the dramatic accession of Roosevelt in the midst of the Great Depression. The cover of Time magazine pictured Obama as FDR, complete with iconic fedora, cigarette holder, and an evocative title: “The New New Deal.” A cover story by Peter Beinart argued that if Obama “can do what FDR did—make American capitalism stabler and less savage—he will establish a Democratic majority that dominates U.S. politics for a generation. And despite the daunting problems he inherits, he's got an excellent chance.”¹⁹

Notwithstanding the ubiquity of this historical parallel, the comparison between Obama and FDR was always highly fanciful. For one thing, as political scientist Theda Skocpol noted, “Roosevelt took office several years into the Great Depression, when the U.S. economy was at a nadir,” whereas “Obama took office amid a sudden financial seizure that was just beginning to push the national economy into a downturn of as-yet-undetermined proportions.” The timing of the unfolding crisis was politically inauspicious for the new administration because, no matter the policy response, ordinary Americans would still be absorbing the pain of the downturn through much of Obama's first term. As some of his aides put it, “The tidal wave was in motion, but it hadn't hit the shore.” Indeed, while Obama's economic advisers recognized that the economy “was hurtling toward a depression,” it turned out that even they greatly underestimated the actual magnitude of the economic shock.²⁰

For another thing, Roosevelt's 1932 landslide swept into office substantial Democratic majorities in the House and Senate, whereas Obama began his first term with just 58 Democratic senators. And even before Obama was inaugurated, Senate Minority Leader Mitch McConnell rallied his caucus around a plan to “deny Democrats any Republican support on big legislation.” In an era of pronounced partisan polarization, and with the filibuster having evolved “from an extraordinary expression into a routine obstructive tactic,” a disciplined Republican opposition would be able to defeat or dilute any bill the president was likely to propose.21

In light of these political realities, the problems that Obama inherited were indeed daunting. According to economist Alan Blinder,

The new president had to lead the economy out of the deepest recession since the 1930s—presumably with a big fiscal stimulus package. … He also had to, first, apply multiple tourniquets to the bleeding financial system, and then nurse it back to health—using whatever was left of the hated TARP [Troubled Asset Relief Program], among other things. While doing so, he had to combat the coming tsunami of home mortgage foreclosures, which would otherwise throw millions of American families out of their homes. Then he almost certainly had to develop and propose sweeping reforms of the financial regulatory system, which had failed the nation badly, with horrific consequences. And he needed a plan for either bailing out the Big Three automakers or limiting the fallout from their demise.²²

Obama's administration moved swiftly on most of these fronts. Only a few weeks after his inauguration, Congress passed a massive $787 billion stimulus bill, the American Recovery and Reinvestment Act, providing new federal spending on infrastructure and other programs, tax cuts, and grants to state governments. As journalist Michael Grunwald put it, the Recovery Act “was a real-time test of a new administration's ability to spend tax dollars quickly, honestly, and effectively—and to reshape the country in the process.” Grunwald called it “the biggest and most transformative energy bill in U.S. history,” “the biggest and most transformative education reform bill since the Great Society,” “America's biggest foray into industrial policy since FDR, biggest expansion of antipoverty initiatives since Lyndon Johnson, biggest middle-class tax cut since Ronald Reagan, and biggest infusion of research money ever.” He quoted one adviser to Obama and Bill Clinton saying, “We probably did more in that one bill than the Clinton administration did in eight years.”²³

As the severity of the crisis seemed to ebb, the administration began to turn its attention to other issues, including health care, energy, education, and financial reform. But as journalist John Harwood observed, the new president was “racing to capitalize” on his high popularity and initial legislative success “for good reason. Political history, and some early signs this spring, suggest that time is not on his side.” A majority of the public, Harwood noted, had already begun to think that “Obama had taken on ‘too many other issues’ besides the economy.”²⁵

The partisan nature of this “new New Deal” is underlined by the pattern of congressional support and opposition to the Obama administration's major policy initiatives. The most important roll call votes in the House and Senate are summarized in table 9.2. In each case, the administration garnered strong support among Democrats but met with nearly unanimous opposition from Republicans in both chambers. Just three of 217 Republicans voted for the stimulus bill; none supported the Affordable Care Act; six voted for the Dodd-Frank financial regulations, and 11 for immigration reform. This opposition was partly strategic—as Senate Republican leader Mitch McConnell said of the health care fight, it was “absolutely critical that everybody be together because if the proponents of the bill were able to say it was bipartisan, it tended to convey to the public that this is O.K., they must have figured it out.” But it was also “rooted in a principled belief that Mr. Obama is pushing the nation in the wrong direction,” as one press account put it.²⁷

Another striking feature of the roll call votes summarized in table 9.2 is how frequently the administration's key policy victories were achieved with a bare minimum of support in the Senate. Given the willingness of the minority to filibuster anything that moved, the simple fact was that a Democratic president could only be as liberal as the 60th-most-liberal senator allowed him to be.28 It was seldom entirely clear in advance how liberal that would be, and in some cases—most notably in the areas of immigration and energy—major policy initiatives with majority support in both chambers of Congress were stymied by a failure to pull together the 60 votes needed to overcome a Senate filibuster. But when the administration and its allies did manage to construct a winning coalition, they did so without a single vote to spare. Obama's most significant legislative achievements—the economic stimulus bill, health care reform, and financial regulation—were each pushed precisely to the filibuster limit, overcoming key hurdles with exactly 60 votes in the Senate.

In each case, pivotal senators extracted significant concessions in exchange for their support. Winning a few Republican votes for the Recovery Act required substantially shrinking the size of the economic stimulus package and including hundreds of billions of dollars in tax cuts. Passing the Affordable Care Act required a completely unified Democratic caucus in the Senate, which in turn required months of haggling and the eventual jettisoning of the “public option” favored by most Democrats. Maine's Republican senators, Olympia Snowe and Susan Collins, who had bucked their party to support the stimulus bill, crossed over once again to support the White House's plan for financial regulation, but when a purist gesture by Democrat Russ Feingold of Wisconsin left the bill still one vote short, additional concessions were necessary to win a third Republican vote from newcomer Scott Brown.²⁹

Politicians on both sides of the aisle were well aware that the public's taste for ambitious policy initiatives was limited. While a substantial majority of Democrats in Congress nonetheless supported most or all of Obama's major policy initiatives, the resulting string of significant legislative achievements had a significant political price tag attached—and the bill came due in the 2010 midterm election.

Having punished Republicans for economic distress as the country slid into recession in 2008, American voters were equally willing to punish Democrats in 2010 for a slow economic recovery. In the first quarter of 2010, real disposable income per capita was still lower than it had been when President Obama was inaugurated a year earlier. The unemployment rate had increased by two full points, to 9.8%. At a Tea Party convention in Tennessee in February, conservative celebrity and former Republican vice presidential candidate Sarah Palin mockingly asked, “How's that hopey-changey thing working out for you?”30

In the summer of 2010, a follow-up to the BBC World Service poll conducted the preceding summer asked about the same three possible government responses to the crisis. The results are reported in the second column of table 9.1. Strikingly, the American public's support for all three policies was markedly lower in 2010 than it had been a year earlier. Having experienced bailouts, bank stress tests, and a seemingly massive stimulus program—and feeling little improvement in tangible economic conditions as a result—most Americans were in no mood for counterfactual arguments that these policies had “transformed what might have been an utter catastrophe into something that was merely awful.”³¹

In a foreshadowing of the postcrisis political agenda, the 2010 BBC World Service poll included an additional policy option: “taking steps to reduce the government's budget deficit and debt, by cutting some spending or increasing some taxes.” That option was distinctly more popular than any of the original three, with 52% of Americans favoring steps to reduce government deficit and debt (28% “strongly”) and only 32% opposing (19% “strongly”). When asked which of two possible approaches to deficit reduction their government should “focus on more,” the survey respondents overwhelmingly chose “cutting spending on government services, including ones you use” over “increasing taxes” (64% to 23%, with the rest choosing neither or both or something else).³²

Obama himself interpreted the election “shellacking” as primarily a reflection of economic frustration: “If right now we had 5 percent unemployment instead of 9.6 percent unemployment, then people would have more confidence in those policy choices.” However, even he grudgingly conceded that voters might have perceived his administration's responses to the economic crisis as amounting to “a huge expansion of government.” Indeed, by the fall of 2010 ordinary Americans were a good deal more likely to see Democrats and Obama as “very liberal” than they were to see Republicans as “very conservative.” Thus, to the consternation of liberal pundits who had expected the Great Recession to shift the nation's politics to the left, voters punished Democrats for having pursued—and in several cases enacted—a liberal policy agenda extending well beyond what seemed relevant and necessary to the task of economic recovery.³⁵

Statistical analyses of district-by-district midterm election results provided substantial evidence that public perceptions of ideological overreach contributed to the Democrats' midterm losses. Democratic incumbents who voted for the Recovery Act did two or three points worse than those who didn't. Supporting the Affordable Care Act probably cost a typical Democrat about five or six percentage points, and perhaps even more in swing districts. Some analyses suggested that supporting the abortive cap-and-trade energy bill and the Dodd-Frank financial reform bill may also have cost Democrats votes.³⁶

If the Recovery Act very likely “paid for itself,” even in strictly electoral terms, that was certainly not true of the Affordable Care Act, whose concrete benefits to prospective voters were both distant and uncertain. Simulations based on district-by-district analyses of the midterm vote suggested that if every vulnerable Democrat (those in districts where Obama received less than 60% of the two-party vote in 2008) had refrained from voting for health care reform, the party would have lost about 25 fewer seats in 2010, bringing the election outcome into close agreement with forecasts based on “fundamentals”—and probably preserving a slim Democratic majority.39

Sweeping health care reform had been an aspiration of Democrats for six decades, but even with a (fleetingly) “filibuster-proof” majority in the Senate, Obama and his allies lacked sufficient political support to do it quickly, cleanly, and in a way that would deliver substantial immediate benefits to their constituents. In the end, they proved to be sufficiently determined to do it slowly, messily, and in a way that left them vulnerable to substantial public backlash. Sometimes that is how significant policy change occurs.

But with a new Republican majority in the House of Representatives, it was clear that no further landmark progressive legislation would emerge from Congress. In principle, the looming expiration of the Bush tax cuts provided Democrats with significant bargaining leverage in the lame-duck session of the outgoing Congress. But letting the tax cuts expire would be a shock to the fragile economy and, in the minds of many voters, a violation of Obama's long-standing pledge not to raise taxes on middle-class families. Thus, the president assigned Vice President Joe Biden to broker a deal with Senate Minority Leader McConnell. In exchange for a two-year renewal of the Bush tax cuts, Biden won extensions of unemployment benefits, tax credits for children, college tuition, and the working poor, and a one-year cut in the regressive payroll tax. According to one sympathetic observer, “Unemployment was way too high to walk away from a significant stimulus deal out of pique over goodies for the wealthy.” Another observer, perhaps less sympathetic, wrote that “Democrats put aside their objections and bowed to the realignment of power brought about by their crushing election losses.”⁴⁰

The next two years produced a series of similarly unedifying attempts at bipartisan policy compromise in the shadow of manufactured deadlines. Less than a month after the 2010 election, a bipartisan National Commission on Fiscal Responsibility and Reform created by President Obama and co-chaired by Alan Simpson and Erskine Bowles issued a proposal for government spending cuts and tax increases that would reduce the federal deficit by nearly $4 trillion over the course of a decade. However, seven of the commission's 18 members opposed the plan, leaving it three votes short of the support required to send it to Congress. The president gamely announced that the report “includes a number of specific proposals that I—along with my economic team—will study closely in the coming weeks.” However, even some supporters of the plan said that “they would not vote for it as actual legislation given their opposition to various provisions.” As one journalist observed, “the outcome at best sent ambiguous signals about whether the White House and Congress could reach an agreement, given the political pain behind the tax and spending decisions that are required.”41

The following year, Republicans in Congress refused to raise the federal government's debt ceiling unless Democrats agreed to substantial cuts in future spending. As the cap on government borrowing approached, Standard & Poor's downgraded the federal government's credit rating for the first time in history and the stock market tanked. Two days before the Treasury Department's deadline for paying its bills, the president and Congress agreed to a deal that would increase the debt limit by $900 billion in exchange for substantial cuts in federal spending over the following decade. A special congressional joint select committee was appointed to hammer out $1.2 trillion in spending cuts, immune from amendment or filibuster, with a fallback provision that if Congress failed to act, automatic across-the-board cuts would be made to both defense and domestic programs beginning in 2013. This “sequester” provision was intended to be so unpalatable to both parties that they would be forced to reach an agreement. Nonetheless, negotiations collapsed as “Democrats and Republicans remained far apart on major budget issues, especially tax increases on the affluent, which Democrats insist must be part of any deficit solution and which Republicans oppose. … The stalemate was the latest sign of partisan deadlock in Washington, which members of both parties do not expect to lift until the 2012 election has clarified which party has the upper hand.”⁴²

Social scientists setting out to examine the impact of economic distress on political attitudes and policy preferences have repeatedly been surprised to find much less than they expected. Sociologists Lane Kenworthy and Lindsay Owens titled their review of evidence from four decades of opinion surveys “The Surprisingly Weak Effect of Recessions on Public Opinion.” But perhaps they should not have been surprised. The general tenor of their findings was clearly foreshadowed more than three decades earlier in a book-length study of the political impact of unemployment in the 1970s by political scientists Kay Schlozman and Sidney Verba.⁴³

Kenworthy and Owens's broader survey of opinion data over four decades suggested that “recent economic recessions have had real but mostly temporary effects on American attitudes on key economic, political, and social issues.” However, they found “no indication of any increase in support for policies that enhance opportunity, support for the poor, or support for redistribution. … Economic downturns, including the Great Recession, have had surprisingly little impact on Americans' views of government, even in the short run.”⁴⁵

A narrower but more detailed study by Yotam Margalit examined changes in policy preferences using a panel survey in which the same people were interviewed before, during, and after the crisis phase of the Great Recession. Comparing responses from July 2007 and April 2009, he found some decline in public support for “an increase in the funding of government programs for helping the poor and the unemployed with education, training, employment, and social services, even if this might raise your taxes.” However, that decline mostly reflected a preponderance of support for such spending increases before the onset of the crisis; among both supporters and opponents, 75% maintained their pre-crisis positions in 2009, while 11 or 12% switched sides.⁴⁶

Among people who actually became unemployed during this period, Margalit found a significant increase in support for “funding of government programs for helping the poor and the unemployed with education, training, employment, and social services.” Given the explicit mention of “the unemployed” in the question, this effect may be seen as echoing Schlozman and Verba's finding that unemployment was associated with support for specific “policies designed to ameliorate the situation,” though not for “wholesale changes in social ideology.” Moreover, even this narrow effect was of rather modest magnitude: 59% of those who lost their jobs during the course of Margalit's panel study supported increased funding of these programs, as compared with 47% of those who kept their jobs. Even over the course of a severe recession, the number of people who lost their jobs was much too small for this shift in views to make a substantial dent in the overall distribution of public opinion.

Much of the criticism from the left hinged on the belief that, as Kuttner put it, a “potent combination of insider leadership, mobilization of public opinion, and alliance with social movements on the ground” should have allowed Obama to engineer policy changes comparable in magnitude to those produced by Franklin Roosevelt and Lyndon Johnson. Skocpol attributed the “endless political controversy and electoral blowback” of Obama's first term primarily to the “incomprehension and anxiety of everyday Americans” faced with bewildering policy debates and to “a veritable explosion of political pushback” from “business interests and many wealthy conservatives.” Nevertheless, she, too, viewed “Obama's failure to engage more consistently in high-profile public leadership on the economy” as an instance of “democratic political malpractice.” Although the president “travelled the country highlighting economic initiatives and progress in selected areas,” she argued, “such efforts lacked the galvanizing, agenda-setting effect of a major speech or sustained national communications strategy; and their fragmented focus inherently restricted the White House's ability to present a coherent economic plan.”48

Arguments of this sort put undue stock in the power to sway public opinion of the “bully pulpit”—a mythical power that has mostly failed to withstand systematic scholarly scrutiny.⁴⁹ They also fail to account for the fact that the most costly “electoral blowback” against the president's congressional allies in 2010 seems to have come in reaction not to his misunderstood economic plan but to his ambitious health care reform—the very policy domain in which, by Skocpol's account, “Obama gave major speeches and orchestrated theatrically effective issue forums at key intervals during 2009 and early 2010, displaying presidential leadership and offering framings that proved influential beyond as well as within the Beltway.”⁵⁰ If this was an example of the “bully pulpit” in action, it is hardly surprising that Democrats in Congress were not eager to stake their careers on further exercises of progressive presidential leadership.

Kuttner's notion that Obama might have advanced a more ambitious progressive policy agenda through “alliance with social movements on the ground” seems even more farfetched. The most significant manifestation of grassroots activism in the wake of the Great Recession, the Tea Party movement, mobilized conservative Republicans in opposition to Obama and his policies. By comparison, the progressive Occupy Wall Street movement offered no clear policy agenda and made little dent in the views of the broader public.⁵¹

The expectation that ordinary Americans would either push or follow their Democratic president to the political left flew in the face of considerable historical evidence suggesting that the public is much more likely to react against perceived shifts in policy than to ratify and reinforce them. Figure 9.2 tracks overall trends in American public opinion over the past six decades using James Stimson's measure of “public policy mood”—an aggregation of hundreds of polls gauging public opinion on a wide variety of domestic policy issues.⁵² Liberal shifts in opinion appear as upticks in the figure, while conservative shifts appear as downturns.

The average view of citizens has generally fallen near the midpoint of this scale, with demands for more government services balanced by demands for reduced government spending. However, public preferences shifted sharply to the right between 2008 and 2012, by almost nine points on the 100-point scale. This shift seems to reflect much the same sort of negative reaction as in figure 9.2 to the activist government of Obama's “New New Deal.” As a result, the net public demand for government spending was lower in 2012 than it had been in at least three decades. Meanwhile, however, the public placed Obama even further to the left on the spending scale than they had in 2008—indeed, significantly to the left of any Democratic presidential candidate since the question has been asked. Thus, whereas Al Gore and John Kerry had been perceived as closer to the public on the issue of government spending than George W. Bush, and Obama in 2008 had been viewed as about equally close to the public as John McCain, Obama in 2012 was placed at a significant disadvantage relative to Mitt Romney—despite the fact that Romney was considered more conservative on this issue than even Ronald Reagan in 1984.⁵⁵

The massive partisan differences in assessments of TARP and the Recovery Act recorded in table 9.3 testify to the powerful role of partisan loyalties in shaping perceptions of the contemporary political world. This may be another reason why the impact of the Great Recession on public opinion was “surprisingly weak,” in Kenworthy and Owens's phrase: the increasing partisan polarization of American politics over the past three decades has probably decreased the scope for substantial shifts in public preferences on issues figuring prominently in partisan political conflict. Given the complexity of public policies and the usual ambiguity of available evidence regarding their effects, controversy among political elites is likely to provide partisans on both sides with arguments and “evidence” bolstering their pre-existing beliefs.

Of course, even in times of crisis, experts sometimes come to considerable agreement about how the world works, but their views may have little sway over people to whom they speak inconvenient truths. For example, a 2012 survey of prominent economists found strong agreement regarding the effectiveness of the 2009 stimulus package.⁵⁶ However, as we saw in table 9.3, 85–90% of Republicans still maintained that adopting the stimulus package was “the wrong thing for the government to do.”

Five years later, economist and New York Times columnist Paul Krugman provided a roughly consistent assessment, albeit from a glass-half-empty perspective. Comparing the policy responses to the crisis in the United States and Europe, Krugman argued that “Europe has done very badly, while America has done relatively well.” He cited the Fed's “willingness to step in and rescue the financial system” and the fact that, unlike the European Central Bank, it subsequently “stood fast in the face of demands that it tighten policy despite high unemployment.” Then he turned to the Obama administration:

Some of us warned from the beginning that the 2009 stimulus was too small and would fade out too fast, a warning vindicated by events. But it was much better than nothing, and was enacted over scorched-earth opposition from Republicans claiming that it would cause soaring interest rates and a fiscal crisis. Again, this is in strong contrast to Europe, which never did much stimulus and turned quickly to savage austerity in debtor nations.

Figure 9.5 shows the pattern of economic contraction and recovery in the United States and, for purposes of comparison, in other OECD countries.⁶⁰ The steep downturn in GDP in 2008 and recovery in 2009–2010 were essentially similar in the United States and in the rest of the world's affluent economies. However, GDP growth was somewhat faster in the United States than elsewhere from early 2011 through 2015, and by mid-2015 the American economy was more than 9% larger (in real terms) than it had been when the recession began in 2007; the comparable cumulative growth in other OECD countries was 7%.

Figure 9.6 provides a similar comparison of unemployment rates in the United States and the OECD as a whole over the same period.⁶¹ In the United States, unemployment doubled over the course of 2008 and 2009, from 5% to 9.9%, but declined steadily and substantially after 2009. By comparison, the average unemployment rate in the OECD as a whole increased less during the worst of the recession but also declined much more slowly in its aftermath. Whereas the U.S. unemployment rate declined by 4.5 percentage points between the end of 2009 and the middle of 2015, the OECD unemployment rate declined by just 1.5 percentage points over the same period.

While trends in income inequality attracted substantial public attention, the most shocking economic fallout from the Wall Street meltdown and its aftermath was much less discussed—a massive collapse of ordinary Americans' net wealth. Figure 9.8 summarizes Fabian Pfeffer, Sheldon Danziger, and Robert Schoeni's tabulations of changes in real wealth over three decades based on data from the Panel Study of Income Dynamics (PSID). These tabulations show that affluent households (at the 95th percentile of the wealth distribution) were wealthier in 2013 than they had been a decade earlier (though not wealthier than they seemed to be at the peak of the pre-recession housing bubble). In striking contrast, however, the median U.S. household's wealth (financial and real assets minus debts) in 2013 was 36% lower in real terms than it had been in 2003, 20% lower than in 2009, and—perhaps most remarkably—20% lower than in 1984. Even more remarkably, households at the 25th percentile of the wealth distribution had less than half as much real wealth in 2013 as they had had on the eve of the Great Recession and less than one-third as much as they had had three decades earlier.⁶³

Wolff's decomposition of household wealth into specific asset classes sheds light on what was at stake in the decision to focus government aid in the wake of the Wall Street meltdown on banks and other financial institutions rather than on mortgage-holders. In 2007, at the beginning of the economic crisis, the wealthiest 10% of households owned 82% of the financial assets whose value was most directly bolstered by the Wall Street bailout (including stocks, mutual funds, securities, trusts, pensions, business equity, and investment real estate). The wealthiest 1% of households alone owned most of that 82%. Thus, they were the biggest winners, by far, from the bailout. Middle-class households held only 26% of their wealth in financial assets, including pension accounts, and 65% in their primary residences. Thus, their economic fortunes would rise or—as it turned out—fall with the prices of their homes.⁶⁵

The catastrophic erosion of middle- and working-class Americans' net wealth following the collapse of the subprime mortgage market was the most calamitous legacy of the Great Recession. To Blinder, “Watching wave after wave of foreclosures sweep across the American landscape was like watching a slow-motion train wreck take a high human toll. But unlike most train wrecks, the government was not a helpless bystander watching an inevitable disaster unfold. It had the power to do something about it—it just didn't. … It is hard to resist the conclusion that we just didn't try hard enough.”⁶⁶

In October 2009, as the worst phase of the financial crisis seemed to be ebbing, the Associated Press published an attention-getting analysis of Treasury Secretary Timothy Geithner's telephone logs. “In the first seven months of Geithner's tenure,” the report noted,

A simplistic way to parse these contacts would be to note that Goldman Sachs, JPMorgan, and Citigroup were all among the top ten sources of financial contributions to Obama's 2008 presidential campaign (second, fifth, and seventh, respectively). But then, so were the University of California at Berkeley (first) and Harvard University (third), and no one supposes that their contributions bought spots on Geithner's speed dial. In any case, the amounts of money involved were drops in a big bucket: the $1,034,615 that Obama received from contributors associated with Goldman Sachs constituted just 0.14% of his $745 million campaign fund.⁶⁸

Economist Simon Johnson offered a more convincing explanation for the specific contours of Geithner's network:

The list of phone calls is not the largest banks, because some of the biggest are hardly represented (e.g., Wells Fargo), it's not the most troubled banks (e.g., Bank of America had little contact), and it's not even investment banker-types who were central to the most stressed markets (Morgan Stanley was not in the inner loop). … Geithner's phone calls were primarily to and from people he knew well already—who had cultivated a relationship with him over the years, shared nonprofit board memberships, and participated in the same social activities. These are close professional colleagues and in some cases, presumably, friends.⁶⁹

Johnson asked, “How can anyone build an accurate picture of conditions in the entire crisis-ridden financial sector primarily from talking to a few top bankers?”

Time and time again, Geithner's account of his judgments and actions seems to reflect a distinctive Wall Street worldview. In the fall of 2008, for example, while Geithner was still at the New York Fed, then-Treasury Secretary Hank Paulson's draft legislation for the Troubled Assets Relief Program proposed giving the treasury secretary sole control over the $700 billion bailout fund, stipulating that his decisions “may not be reviewed by any court of law or any administrative agency.” Geithner “liked it,” though he “wasn't sure it granted Treasury broad enough powers.” Legal subtleties, it seems, could be dispensed with in a financial emergency. On the other hand, a few months later, when insurance giant AIG used TARP money to pay massive bonuses to many of the executives who had generated billions of dollars in losses, Geithner opposed any effort to claw back the bonuses on the grounds that the government “could not force a financial firm to violate a contractual obligation without unleashing a new wave of panic and uncertainty.” “The rule of law,” he wrote, “was arguably our most important anchor, especially during this limbo period when fears of nationalization and federal interference were pervasive.”⁷¹

Geithner clashed repeatedly with Sheila Bair, the head of the Federal Deposit Insurance Corporation (and a former aide to Republican senator Bob Dole, with varied experience in politics, government, and academia). When Bair allowed the failing Wachovia bank to back out of a pending government-subsidized merger with Citi in order to accept a better deal from Wells Fargo—“seven times Citi's offer, with no government help needed”—Geithner was “livid” that the government was violating its “commitment” to Citi. But several weeks later, when Bank of America CEO Ken Lewis was “threatening to abandon” a pending merger with Merrill Lynch in the face of escalating losses at the brokerage, Geithner “fully supported” an additional infusion of government aid to Bank of America to ensure that the deal would go through.72

Geithner expressed pride in the Obama administration's “focus on getting the policy right first and worrying about the politics later.” But some political pressures seem to have been more attention-worthy than others. When it became clear that the Fed and the Treasury “couldn't defuse the crisis until we recapitalized the financial system,” Paulson worried that “even mentioning the possibility of direct capital investments would have been bad politics, raising the specter of nationalization. Government ownership stakes in private firms sounded un-American.” Thus, policy-makers focused instead on “injecting capital” into failing financial institutions while limiting public ownership. Even “risky and messy deals” were “preferable to government takeovers.” Meanwhile, a separate program was constructed to “appease the demand in the financial and political arenas for some kind of government effort to buy illiquid assets.” But the “political arena” Geithner had in mind apparently did not include the substantial majority of the American public who, as reported in table 9.1, opposed “giving financial support to banks in trouble.”⁷³

Geithner's concerns about the problem of “moral hazard”—rewarding reckless behavior by bailing out the perpetrators—were similarly selective. In the case of banks, “Old Testament vengeance appeals to the populist fury of the moment,” he wrote, “but the truly moral thing to do during a raging financial inferno is to put it out. The goal should be to protect the innocent, even if some of the arsonists escape their full measure of justice.” On the other hand, when it came to mortgage relief, “our goal was not to subsidize borrowers who splurged on over-priced McMansions and vacation homes and investment properties, or took out home equity loans to buy swimming pools and fancy cars. We knew that a few outrageous stories of aid to reckless speculators and scam artists could cripple support for our entire housing program.”⁷⁴

Lawrence Summers, the director of the National Economic Council, observed that “debt crises rarely end before governments help reduce excess debt burdens.” But Geithner was convinced that “nobody had a feasible proposal for a cost-effective, well-targeted, large-scale debt reduction program for homeowners that could get through Congress.” As Blinder put it, both Paulson and Geithner viewed mortgage modifications as “economically difficult, legally problematic, and politically toxic.”⁷⁵

In retrospect, Geithner acknowledged that “our housing efforts got off to a rough start, and I set too high a bar for expanding them later on.” He admitted making frequent “empathy mistakes” in his meetings with advocates for mortgage relief,

Even in retrospect, Geithner's own account of his efforts sometimes calls into question his grasp of “terrible out there.” For example, in assessing the overall success of the Obama administration's response to the financial crisis, he noted that “by the end of 2013, our GDP was 6 percent higher than before the crisis; Japan, the U.K., and the eurozone were still below their pre-crisis output levels. After declining by $15 trillion, U.S. household wealth was also higher than the pre-crisis peak. … The stabilization of Wall Street and the rest of the financial system saved the Main Street economy from the trauma of another depression.”⁷⁷

While there is indeed much to be proud of in this record, Geithner's reassuring picture of rebounding GDP and wealth overlooked both the excruciatingly slow pace of the recovery and, even more tellingly, its remarkable unevenness. If “the Main Street economy” consisted of the top one-tenth of affluent American households, then the recovery from the Great Recession was indeed a considerable success. But for more typical American families, real incomes in 2014 were still not back to their 2009 levels, much less their 2007 levels. Even worse, the Wall Street meltdown and its aftermath had wiped out much of their life savings, leaving the median household's real net worth 20% below where it had been three decades earlier. They might be excused for feeling little gratitude.

Were the policy changes championed by Franklin Roosevelt really so much more visible and comprehensible—or, for that matter, more popular—than those pursued by Obama? A study by sociologists Katherine Newman and Elisabeth Jacobs of public reactions to government activism from the New Deal era to the present provided a useful reminder that Roosevelt, like Obama, had plenty of disappointed political supporters: “Though we remember Roosevelt today as the man who did more for the poor and dispossessed than any president before, and arguably anyone since, in his own day leftists and labor liberals often complained that Roosevelt's actions were too little, too late, and too tepid.” Four years into the New Deal, and a year after Roosevelt's landslide reelection, the editors of The Economist offered this frustrated appraisal: “Relief there has been, but little more than enough to keep the population fed, clothed and warmed. Recovery there has been, but only to a point still well below the pre-depression level. The great problems of the country are still hardly touched.”⁸⁰

The conventional understanding of the electoral politics of the 1930s is that the Democrats' success in forging a durable new majority hinged crucially on the public's assessment of the measures adopted by Roosevelt to combat the Depression. The eminent political scientist V. O. Key Jr., for example, argued that the Democratic landslide of 1936—the pivotal electoral event in what came to be called the New Deal era—“could only be interpreted as a popular ratification of the broad features of new public policy.” In fact, though, Roosevelt's political fate was probably much less dependent on voters' assessments of policies than on their ability to see and feel concrete economic progress. Christopher Achen and I showed that Roosevelt's historic landslide in 1936 was heavily concentrated in states with high income growth rates over the course of the election year—just the sort of myopic economic retrospection that looms so large in contemporary electoral politics. Indeed, our analysis suggested that if the recession of 1938 had happened to occur two years earlier, Roosevelt would probably have been a one-term president, making the New Deal era just as evanescent as the “new Liberal Order” proclaimed by Peter Beinart in 2008.⁸¹

The Great Recession brought similar political disappointment to progressives in many other affluent democracies. In 2011, prominent political consultant Stanley Greenberg found it “perplexing” that “many voters in the developed world are turning away from Democrats, Socialists, liberals and progressives. … When unemployment is high, and the rich are getting richer, you would think that voters of average means would flock to progressives, who are supposed to have their interests in mind—and who historically have delivered for them.”⁸³

Greenberg's perplexity is understandable if one supposes that voters are animated by the same ideological convictions as politicians, pundits, and political activists. But copious evidence suggests that ordinary citizens are mostly uninterested in ideological manifestos and economic theories, and skeptical of assertions about which parties “historically have delivered for them.” They are much more attentive to ends than to means, and they tend to reward or punish incumbent governments based on straightforward assessments of observable success or failure.

In this respect, what may be most striking about the politics of the Great Recession in the United States and elsewhere is how ordinary it looked. In times of crisis, as in good times, ordinary citizens have a stubborn tendency to judge politicians and policies not on the basis of ideology or economic doctrine, but according to perceived success or failure. In the United States, their initial response to the recession produced a (barely) unified Democratic government, while their impatience with the slow recovery produced Republican majorities in Congress and a partisan standoff. In both cases, the result had substantial implications for the course of public policy. Of course, no one may have been entirely satisfied by the outcome. Indeed, for those with a romantic view of American democracy and its capacity for epic moments, it may have been downright disillusioning.

¹ Geithner (2014, 19). The literature describing, explaining, and assessing the Great Recession is enormous. See, for example, Scheiber (2011), Blinder (2013a), Irwin (2013), and Eichengreen (2015).

² Jeff Zeleny, “Obama Weighs Quick Undoing of Bush Policy,” New York Times, November 9, 2008.

³ “A 40-Year Wish List: You Won't Believe What's in That Stimulus Bill,” Wall Street Journal, January 28, 2009.

⁴ David M. Herszenhorn, “Hold On to Your Seat: McConnell Wants Obama Out,” New York Times, October 26, 2010.

⁵ “A Liberal Supermajority,” Wall Street Journal, October 17, 2008; Kuttner (2008, 1); John B. Judis, “America the Liberal,” The New Republic, November 19, 2008.

⁶ An accumulation of dozens of Gallup polls showed conservatives outnumbering liberals in the U.S. public by 19 points in 2009, up from 15 points in 2008—and that margin remained undiminished through 2010 and 2011; Lydia Saad, “Conservatives Remain the Largest Ideological Group in U.S.,” Gallup Politics, January 12, 2012 (http://www.gallup.com/poll/152021/conservatives-remain-largest-ideological-group.aspx). Alternative measures of public opinion considered later in this chapter likewise registered a conservative shift over the course of Obama's first term.

⁷ The 2006 Role of Government survey (the fourth in a series dating back to the mid-1980s) was conducted in more than 20 countries as part of the International Social Survey Programme (http://www.issp.org/). In the United States, the questions were asked as part of the General Social Survey, a long-running national study of social attitudes.

⁸ “Cuts in government spending.” Strongly favor, 26.9%; favor, 35.8%; neither in favor nor against, 23.9%; against, 9.3%; strongly against, 4.0%.

⁹ “Government financing of projects to create new jobs.” Strongly favor, 40.4%; favor, 44.9%; neither in favor nor against, 8.0%; against, 4.6%; strongly against, 2.1%.

¹⁰ “Listed below are various areas of government spending. Please show whether you would like to see more or less government spending in each area. Remember that if you say ‘much more,’ it might require a tax increase to pay for it.” Health: Spend much more, 36.1%; spend more, 44.4%; spend the same as now, 13.6%; spend less, 4.6%; spend much less, 1.3%. Education: Spend much more, 41.2%; spend more, 42.4%; spend the same as now, 12.6%; spend less, 3.0%; spend much less, 0.8%. Retirement: Spend much more, 24.2%; spend more, 41.0%; spend the same as now, 27.6%; spend less, 5.6%; spend much less, 1.7%. Unemployment benefits: Spend much more, 10.5%; spend more, 25.1%; spend the same as now, 49.6%; spend less, 12.8%; spend much less, 2.1%.

¹¹ “On the whole, do you think it should be or should not be the government's responsibility to reduce income differences between the rich and poor?” Definitely should be, 27.2%; probably should be, 23.8%; probably should not be, 25.8%; definitely should not be, 23.2%. “On the whole, do you think it should be or should not be the government's responsibility to provide a job for everyone who wants one?” Definitely should be, 16.0%; probably should be, 23.7%; probably should not be, 34.1%; definitely should not be, 26.2%.

¹² In the case of social spending, I constructed a scale reflecting the average level of net support for four specific programs: health, education, retirement, and unemployment benefits.

¹³ For related discussions, see Bartels, “U.S. Is a World Leader in Class Conflict over Government Spending,” The Monkey Cage, April 21, 2014. The collection of “other affluent democracies” in this comparison includes the 16 countries in the ISSP's fourth (mid-2000s) Role of Government module with per capita incomes of $30,000 or more—Australia, Canada, Denmark, Finland, France, Germany, Great Britain, Ireland, Israel, Japan, the Netherlands, New Zealand, Norway, Spain, Sweden, and Switzerland.

¹⁴ According to the National Bureau of Economic Research (NBER) Business Cycle Dating Committee, “U.S. Business Cycle Expansions and Contractions” (http://www.nber.org/cycles.html), “a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”

¹⁵ Alan I. Abramowitz, “Did the Wall Street Meltdown Change the Election?” Sabato's Crystal Ball, February 5, 2009. Larry Bartels, “Obama Toes the Line,” The Monkey Cage, January 8, 2013.

¹⁶ Expectations were virtually identical among the subset of respondents interviewed in the last 30 days of the campaign, two to six weeks after the collapse of Lehman Brothers: 28% expected the economy to get worse over the next year, while 27% expected it to get better. Author's tabulations based on data from the ANES 2008 Time Series Study (http://www.electionstudies.org/).

¹⁷ Peter Beinart, “The New Liberal Order,” Time, November 13, 2008; John B. Judis, “America the Liberal,” The New Republic, November 19, 2008.

¹⁸ John Sides, “Truths and Myths About the 2008 Election,” The Monkey Cage, November 5–6, 2008; Larry M. Bartels, “Election Debriefing,” CSDP Election 2008 Blog, November 6, 2008.

¹⁹ Beinart, “The New Liberal Order.”

²⁰ Skocpol (2012, 15); Grunwald (2012, 105, 113). On the depth and duration of previous economic downturns stemming from financial crises, see Reinhart and Rogoff (2009).

²¹ Carl Hulse and Adam Nagourney, “Senate G.O.P. Leader Finds Weapon in Unity,” New York Times, March 16, 2010; Skocpol (2012), 26. Arlen Specter (R-PA) joined the Democratic caucus in late April, and Al Franken (D-MN) was seated in early July when a court finally upheld his disputed razor-thin election margin. Those additions gave Obama a short-lived “filibuster-proof” majority (including independents Joseph Lieberman and Bernie Sanders, who caucused with the Democrats) until Republican Scott Brown was elected to replace the deceased Edward Kennedy (D-MA) the following February.

²² Blinder (2013a, 218).

²³ Grunwald (2012, 18, 10–11).

²⁴ BBC World Service poll, “Global Poll Shows Support for Increased Government Spending and Regulation,” September 13, 2009 (http://www.globescan.com/news_archives/bbc2009_globalPoll-04/).

²⁵ John Harwood, “Link to Economic Crisis Is Vital to Obama Agenda,” New York Times, May 3, 2009.

²⁶ David Leonhardt, “In Health Bill, Obama Attacks Wealth Inequality,” New York Times, March 24, 2010; Skocpol (2012, 44).

²⁷ Carl Hulse and Adam Nagourney, “Senate G.O.P. Leader Finds Weapon in Unity,” New York Times, March 16, 2010.

²⁸ On the implications of the filibuster for law-making, see Krehbiel (1998).

²⁹ Grunwald (2012); Jacobs and Skocpol (2010); McCarty (2012); Kaiser (2013).

³⁰ Kate Zernike, “Palin in 2012? She Says Run Is Possible,” New York Times, February 7, 2010.

³¹ BBC World Service poll, “Governments Misspend More Than Half of Our Taxes—Global Poll,” September 27, 2010 (http://www.globescan.com/news_archives/bbc2010_economics/); Blinder (2013a, 345). The decline in popular support for the most salient policy responses to the crisis was by no means limited to the United States; support for aiding troubled banks and increasing government spending declined from 2009 to 2010 in every one of the countries included in both surveys. The average decline in net support was 16 points for increasing government spending and 18 points for supporting troubled banks. Changes in support for increasing government regulation were more mixed, with big declines in Australia and the United States, but increases in Germany and France.

³² It is tempting to interpret this public support for budget-cutting as a reflection of Americans' deep-seated suspicion (at least in the abstract) of big government. However, the public sentiment in favor of austerity seems to have been widely shared throughout the developed world. At least slight pluralities in all five of the other affluent democracies included in the survey favored deficit reduction measures, with cutting services always substantially more popular than increasing taxes.

³³ A roundup of nine different forecasts available several weeks before the 2010 midterm election suggested that Democrats would probably lose 30 to 50 seats; analyses incorporating poll results were generally more pessimistic than those relying solely on economic indicators and structural political factors such as the number of seats being defended by each party. John Sides, “Midterm Forecast Update,” The Monkey Cage, September 12, 2010.

³⁴ Thomas M. DeFrank, “Midterm Election Results Show Voters Unhappy with President Obama's Leadership,” Daily News, November 3, 2010; Kimberly Schwandt, “Boehner's Election Night Speech,” Fox News Politics, November 2, 2010.

³⁵ “Press Conference by the President,” November 3, 2010 (https://www.whitehouse.gov/the-press-office/2010/11/03/press-conference-president). A fall 2010 survey found 31% of the respondents rating Republicans as “very conservative”; 41% rated Democrats as “very liberal,” and 43% rated Obama as “very liberal.” Tabulations based on data from the ANES 2010 Panel Recontact Study (http://www.electionstudies.org/).

³⁶ Just a week after the election, Eric McGhee estimated that congressional Democrats who voted for the American Recovery and Reinvestment Act (ARRA) lost 2.8% of the vote, other things being equal, while those who voted for the Affordable Care Act (ACA) lost 4.5% and those who voted for the cap-and-trade energy bill lost 2.1%; Eric McGhee, “Which Roll Call Votes Hurt the Democrats?” The Monkey Cage, November 9, 2010. A subsequent analysis by Brendan Nyhan and his colleagues (2012) put the effect of supporting the ARRA at 1.7%, the cost of supporting the ACA at 6.5%, and the cost of supporting cap-and-trade at 1.7%. A study by Gary Jacobson (2011) limited to 44 Democratic incumbents in Republican-leaning districts estimated that a vote in favor of the stimulus package cost them 3.0% of the midterm vote, while a vote in favor of health care reform cost them 4.9% and a vote in favor of the Dodd-Frank bill cost them 3.7%.

³⁷ A Washington Post/ABC News poll conducted a month before the midterm election found 68% of the public saying that the money the federal government spent on the economic stimulus had been “mostly wasted,” while only 29% said that the money had been “mostly well spent.” “Washington Post/ABC News Poll” conducted September 30–October 3, 2010 (http://www.washingtonpost.com/wp-srv/politics/polls/postpoll_10052010.html); David J. Lynch, “Economists Agree: Stimulus Created Nearly 3 Million Jobs,” USA Today, August 30, 2010.

³⁸ My estimate of the impact of the stimulus package on real GDP growth is based on a widely circulated report by economists Alan Blinder and Mark Zandi (2010, table 7), discussed later in this chapter. My estimate of the impact of real GDP growth on the election outcome is derived from a cross-national analysis of elections in OECD countries in the Great Recession era (Bartels 2014a); estimates derived from historical analysis of U.S. midterm election outcomes are in the same ballpark.

³⁹ Nyhan et al. (2012, 862).

⁴⁰ Grunwald (2012, 404); David M. Herszenhorn, “Congress Sends $801 Billion Tax Cut Bill to Obama,” New York Times, December 16, 2010.

⁴¹ Jackie Calmes, “Obama Sets Up Debt Panel,” New York Times, February 18, 2010; Jackie Calmes, “Obama Offers Hope for Debt Panel's Plan,” New York Times, December 3, 2010.

⁴² Robert Pear and Catherine Rampell, “Lawmakers in Both Parties Fear That New Budget Panel Will Erode Authority,” New York Times, August 1, 2011; Eric Lipton, “Lawmakers Trade Blame as Deficit Talks Crumble,” New York Times, November 20, 2011.

⁴³ Kenworthy and Owens (2011); Schlozman and Verba (1979).

⁴⁴ Schlozman and Verba (1979, 351, 349, 330, 332).

⁴⁵ Kenworthy and Owens (2011, 198, 216–217, 204).

⁴⁶ Margalit (2013); see also Owens and Pedulla (2014).

⁴⁷ John B. Judis, “The Unnecessary Fall: A Counter-History of the Obama Presidency,” The New Republic, August 12, 2010; Robert Kuttner, “Unequal to the Moment,” The American Prospect, February 9, 2011.

⁴⁸ Kuttner, “Unequal to the Moment”; Skocpol (2012, 44–45, 37–38, 36).

⁴⁹ George Edwards's (2003) book on presidents and public opinion is entitled On Deaf Ears: The Limits of the Bully Pulpit.

⁵⁰ Skocpol (2012, 35).

⁵¹ On the Tea Party movement, see Zernike (2010). Chapter 10 provides a more detailed assessment of the Occupy Wall Street movement and its political impact.

⁵² For explications of the statistical analysis underlying this measure and more detailed descriptions of the policy questions it encompasses, see Stimson (1998) and Erikson, MacKuen, and Stimson (2002, chap. 6). Updated data (through 2014, as of this writing) are available from Stimson's website (http://stimson.web.unc.edu/data/).

⁵³ Wlezien (1995).

⁵⁴ “Some people think the government should provide fewer services, even in areas such as health and education, in order to reduce spending. Other people feel that it is important for the government to provide many more services even if it means an increase in spending. Where would you place yourself on this scale, or haven't you thought much about this?” The endpoints of the scale are labeled “reduce spending a lot” and “many more services,” respectively. The tabulation of citizens' views presented in figure 9.3 excludes the 14–20% of ANES respondents in each year who said that they didn't know or hadn't thought much about the issue. The tabulations of perceived candidate positions exclude an additional 2–15% who placed themselves but said that they didn't know where the candidates stood.

⁵⁵ The ANES surveys also asked about the positions of the Democratic and Republican Parties on the spending scale. Results for the parties are generally similar to those for their presidential candidates. In 2012 the Democratic Party was placed about two points to Obama's right on the 100-point scale, on average, while the Republican Party was placed less than one point to Romney's right. Using data from the 2012 Cooperative Campaign Analysis Project survey, John Sides and Lynn Vavreck (2013, 203–205) found that Romney had an even greater “proximity” advantage over Obama with respect to positions on a general liberal-to-conservative ideological scale.

⁵⁶ The survey was conducted in February 2012 with 41 “distinguished experts with a keen interest in public policy from the major areas of economics” as part of the University of Chicago Business School's IGM Forum. Thirty-three of these experts agreed that the unemployment rate at the end of 2010 was lower than it would have been without the 2009 stimulus package, while only two disagreed; 19 agreed that “the benefits of the stimulus will end up exceeding its costs,” while five disagreed. IGM Forum, “Economic Stimulus,” February 15, 2012 (http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_cw5O9LNJL1oz4Xi).

⁵⁷ HuffPost Pollster compiles findings from several dozen polling organizations. Figure 9.4 summarizes the results of 1,169 separate opinion surveys in a moving average of the 20 most recent poll results at each point in time (through early December 2015). See HuffPost Pollster, “Poll Chart: Party Identification” (http://elections.huffingtonpost.com/pollster/party-identification).

⁵⁸ Blinder and Zandi (2010, 1–2). Blinder and Zandi's assessment of the economic impact of fiscal stimulus policies is consistent with that of the Congressional Budget Office, which estimated that the Recovery Act increased 2010 real GDP by 1.5–4.2% and created between 1.3 million and 3.4 million additional jobs; CBO, “Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from January 2010 Through March 2010,” May 25, 2010 (https://www.cbo.gov/publication/21492). Later, Blinder (2013a, 345) wrote that “real GDP in 2011 was $1.8 trillion higher than it would have been without all the rescue operations. With that much more output, there were 9.8 million more jobs, and the unemployment rate was 6.5 percentage points lower. These are huge effects that transformed what might have been an utter catastrophe into something that was merely awful.”

⁵⁹ Paul Krugman, “The Not-So-Bad Economy,” New York Times, December 7, 2015.

⁶⁰ OECD Quarterly National Accounts, Historical GDP—expenditure approach, volume estimates, fixed PPPs, seasonally adjusted. Since the United States accounts for about one-third of the total GDP of OECD countries, I subtracted the U.S. figure from the OECD total for purposes of comparison.

⁶¹ OECD Key Short-Term Economic Indicators: Harmonized Unemployment Rate. According to the OECD, U.S. unemployment increased from 5% in the first quarter of 2008 to 9.9% in the fourth quarter of 2009, falling back to 5.4% in the second quarter of 2015. Unlike in figure 9.5, the OECD unemployment rate in figure 9.6 includes the United States.

⁶² Saez noted that 2012 incomes for the top 1% of income-earners might be artificially high due to income-timing intended to avoid higher top tax rates beginning in 2013. His subsequent analysis showed that the income share of the top 1% did indeed dip in 2013 before beginning to increase again in 2014 (Saez 2015).

⁶³ Pfeffer, Danziger, and Schoeni (2014). For the same authors' more detailed analysis of wealth trends through 2011, see Pfeffer, Danziger, and Schoeni (2013).

⁶⁴ Wolff (2014, 49, 51).

⁶⁵ Ibid., 56, 55.

⁶⁶ Blinder (2013a, 321, 342).

⁶⁷ Matt Apuzzo and Daniel Wagner, “Mr. Geithner, Wall Street Is on Line 1 (Again).” USA Today, October 8, 2009.

⁶⁸ Simon Johnson, “Too Politically Connected to Fail in Any Crisis,” The Baseline Scenario, October 8, 2009 (http://baselinescenario.com/2009/10/08/too-politically-connected-to-fail-in-any-crisis/).

⁶⁹ Center for Responsive Politics, “Barack Obama: Top Contributors, 2008 Cycle” (http://www.opensecrets.org/PRES08/contrib.php?cid=N00009638).

⁷⁰ Geithner also worked in Henry Kissinger's consulting firm for a few years between government jobs. That connection, too, seems to have left a mark on his social network. Geithner attended a dinner party at Kissinger's New York apartment on the evening before the crucial congressional vote on TARP, reassuring the assembled guests that “we're going to fix this” Geithner (2014, 328, 336, 219).

⁷¹ Geithner (2014), 208–209, 316.

⁷² Ibid., 222, 255.

⁷³ Ibid., 266, 224, 324, 255, 285.

⁷⁴ Ibid., 9, 301.

⁷⁵ Ibid., 302; Blinder (2013a, 323).

⁷⁶ Geithner (2014, 384–385).

⁷⁷ Ibid., 494, 496.

⁷⁸ For a similar argument, see Blinder (2013b).

⁷⁹ Skocpol (2012, 44, 42).

⁸⁰ Newman and Jacobs (2010, 15); Editors of The Economist (1937, 147).

⁸¹ Key (1958, 578–579). Achen and Bartels (2016, chap. 7). As one might expect based on my analysis of voters' myopia in chapter 3, spectacular income growth in 1934 and 1935 seems to have had no discernible effect on Roosevelt's 1936 vote; only income growth in 1936 mattered.

⁸² Blinder and Zandi (2010, table 4).

⁸³ Stanley B. Greenberg, “Why Voters Tune Out Democrats,” New York Times, July 30, 2011.

⁸⁴ On the dominance of retrospection over ideology in electoral responses to the Great Recession in OECD countries, see Bartels (2014a). Nor is there any evidence of consistent ideological shifts outside the context of elections. For example, comparing data from 20 countries in the 2006 and 2010 European Social Surveys (http://www.europeansocialsurvey.org/) reveals an almost imperceptible average shift to the right of 0.04 points on a ten-point ideological scale—and no apparent relationship between the (usually quite modest) shifts observed in specific countries and the severity of their economic downturns.

TABLE 9.1
Public Support for Government Actions, 2009 and 2010
“In our current economic conditions, do you favor or oppose the [COUNTRY] government doing each of the following?” Net support ranges from +100 (“strongly favor”) to −100 (“strongly oppose”).
	United States		Other affluent democracies
	2009	2010	2009	2010
Giving financial support to banks in trouble	−31	−42	−19	−38
Increasing government regulation and oversight of the national economy	−1	−18	+17	+19
Significantly increasing government spending to stimulate the economy	−6	−22	+10	−5
Taking steps to reduce the government's budget deficit and debt by cutting some spending or increasing some taxes	—	+14	—	+9
Source: BBC World Service poll, conducted by GlobeScan. The entries for “other affluent democracies” reflect averaged responses from Australia, Canada, France, Germany, and the United Kingdom.

TABLE 9.2
Congressional Support for Major Aspects of the Obama Legislative Agenda, 2009 and 2010
Independents are grouped with their party caucuses.
	House		Senate
	Democrats	Republicans	Democrats	Republicans
American Recovery and Reinvestment Act (conference)	246–7	0–176	57–0	3–38
	February 13, 2009 (vote no. 70)		February 13, 2009 (vote no. 64)
Patient Protection and Affordable Care Act	219–34	0–178	60–0	0–39
	March 21, 2010 (vote no. 165)		December 24, 2009 (vote no. 396)
Wall Street Reform and Consumer Protection Act (conference)	234–19	3–173	57–1	3–38
	June 30, 2010 (vote no. 413)		July 15, 2010 (vote no. 208)
Immigration reform (DREAM Act)	208–38	8–160	52–5	3–36
	December 8, 2010 (vote no. 625)		December 18, 2010 (vote no. 278)
Source: GovTrack.us.

TABLE 9.3
The Public's Verdict on the Troubled Asset Relief Program and the American Recovery and Reinvestment Act, 2012
	Total sample	Democrats	Republicans
The Troubled Asset Relief Program created a $700 billion fund to purchase assets and equity from banks and other financial institutions in order to strengthen the U.S. financial system in the midst of the subprime mortgage crisis. Do you think this was the right thing or the wrong thing for the government to do?
Right thing	43.4%	67.8%	16.1%
Wrong thing	56.6%	32.2%	83.9%
N	1,444	636	560
The Troubled Asset Relief Program created a $700 billion fund to purchase assets and equity from banks and other financial institutions in order to strengthen the U.S. financial system in the midst of the subprime mortgage crisis. The program was approved by Congress in 2008 at the urging of President Bush and his treasury secretary. Do you think this was the right thing or the wrong thing for the government to do?
Right thing	37.2%	53.6%	24.7%
Wrong thing	62.8%	46.4%	75.3%
N	1,482	663	584
In early 2009, the president and Congress adopted a $787 billion economic stimulus package, the American Recovery and Reinvestment Act. Do you think this was the right thing or the wrong thing for the government to do?
Right thing	50.2%	82.6%	9.6%
Wrong thing	49.8%	17.4%	90.4%
N	1,450	639	566
In early 2009, the president and Congress adopted a $787 billion economic stimulus package, the American Recovery and Reinvestment Act, which included new spending on health care, education, aid to low-income workers and the unemployed, energy and infrastructure projects, and $288 billion in tax cuts. Do you think this was the right thing or the wrong thing for the government to do?
Right thing	55.3%	90.6%	15.9%
Wrong thing	44.7%	9.4%	84.1%
N	1,489	661	595
Source: 2012 CCAP Inequality Module.