Meanwhile, ALNs Key Episodes in the Twentieth Century or Chapter 7 of the same book attempted to discuss the drawn out process of fiscal policy change initiatives (110). Chapter 6 basically explained how U.S. political representatives identify, understand, and support the majority while Chapter 7 detailed the U.S. Economys shift from agricultural to industrial and the corresponding increase in government spending to support denser population growth in the cities during the pre-World War U.S. economy (94-6).
Chapter 7 also suggested that voters became more conservative and legislators made an honest mistake (110) during the later part of the twentieth century as the reasons behind the slow, yet ultimately, quick trend in tax cuts, and hence, reduced government spending (100-5). The thesis of this paper is that when it came to fiscal policy preferences, U.S. constituent mood swings from conservative to liberal or vice-versa actually reflected a major transformation in the U.S. economy that ALN reasonably examined in Chapter 6 (90-1) and some parts of Chapter 7 (94-7), but failed to identify or support in Chapter 7s conclusion with regards to the later part of the twentieth century (110).
First, ALN observed that U.S. government spending was increased in the early twentieth century but was cut or reduced during the last three decades (83). ALN also observed that some U.S. states followed this trend while others did not (83). ALN called those states that followed the trend as initiative states while those states that did not follow the trend as non-initiative states (83). Majority of ALNs observations and analyses are focused on fiscal policies that increase or reduce spending or taxes versus those policies that retain the status quo. ALN pointed out that legislators or politicians that followed the trend are clearly the representatives of the majority while those that did not: voted according to their conscience believing that they know better than the majority (87).
In this light, ALN asserted that: After all, representatives who want to stay in office will try to please their constituents, and those who flagrantly ignore the wishes of the electorate will eventually be voted out of office (87). ALN also provided numerous examples on how government spending increased during the U.S. economys shift from the agricultural era into the industrial age as the rural economy became weak while the urban economy became strong (94-7).
Moreover, ALN cited as an example voters preference for increased welfare spending during a recession instead of during an economic boom (90). ALNs examples appeared to have economic explanations, and dovetailed with Roosevelts New Deal and spending economics to pump prime a sluggish U.S. economy during the Great Depression, except in ALNs discussion of the California Tax Revolt (100; 102-5), Ronald Reagan (102-3; 106; 108-9), and Bill Clinton (109). Here, initiatives for tax cuts have been simply presented and explained as constituency preferences or setting about to implement the will of the voters (103).
Second, Chapter 6 or When Legislators Get Out of Step provided insights on how legislators deliberately or unwittingly interpret or misinterpret voters preferences on certain issues that affect the speed by which fiscal policies change and vice-versa. Meaning, voters too can misinterpret the stances on fiscal policy issues of their duly elected representatives. Both ways, misinterpretations are due to a variety of reasons such as: [a] the diverse portfolio of issues that a politician supports or information overload (88); [b] the great number of politicians that need to be elected in federal, state, and local government offices (88); [c] the distinct interests of politicians compared with ordinary citizens (87); [d] limited information (89); and [e] lack of measurement tools that gauge voter preferences on selected issues (89).
According to ALN, these reasons determine the speed or slowness of a politician to adapt to a fiscal policy change that the majority of constituents prefer. Ultimately, the politician catches up with the preference of the voting majority. Otherwise, politicians get voted out of office. Meanwhile, Chapter 7 or Key Episodes in the Twentieth Century provided an insight into how a visionary initiates the process of fiscal policy change (102), how the initiative slowly gains momentum (102), and how the initiative affects the majority of the voters eventually resulting in a fiscal policy change (103-5).
However, ALNs discussion of the slow fiscal policy change did not refer to any economic explanations even though the time period graphically shown in Figure 7.3 illustrating the growth of support for tax cuts from 1968 to 1979 in California (104) can be dovetailed with major economic events that occurred during this time such as the oil crisis of the 1970s; the emerging trend in Japanese car imports; or the beginnings of offshore manufacturing plants. Essentially, the slow gain in momentum of the California tax cut that was initiated by Philip Watson could also be attributed to lack of information, both from the point of view of politicians and the voting constituency of California State. This is for the simple reason that: Watson may have had been ahead of his time.
For the purpose of this paper, it can be conjectured that Watson may have had seen, evaluated, or assessed economic events that were unfolding during his time that eventually resulted in the trend of tax cuts and reduced government spending. For instance, U.S. consumer preference for more fuel-efficient and cheaper Japanese cars could have had a positive externality that politicians would initially favor for the sake of the bigger majority of consumers. However, the same situation has a negative externality in the sense that U.S. car manufacturing jobs will be greatly affected when demand for Japanese cars rise while those for US-made cars plunge.
Due to the multiplier effects of the US automotive industry on the US economy, tax cuts would essentially counter the side effects of cheaper, Japanese automotive goods such as: [a] lost jobs from direct and indirect automotive industry businesses; [b] lesser US worker and business income due to international competition; and [c] lesser demand for other US goods due to reduced purchasing power of US workers and businesses.
On the contrary, since tax cuts would basically reduce government spending due to lesser government funds, major US businesses and US workers could be negatively affected by these tax cuts. Cause and effect-wise, politicians initially favoring the preference of the majority of consumers could eventually be doing a disfavor to the majority of constituents who have had lost jobs and reduced income. In this sense, ALN appeared to have had ignored the cause and effects brought about by the economic externalities on the US political landscape.
Third, ALN tried to tie-up several theories on voter preferences and the will of the majority in Chapter 6 with the California Tax Revolt story (100; 102-5) in Chapter 7 to illustrate how voters became more conservative (86) and how politicians make honest mistakes (87). ALN basically explained in Chapter 6 how US politicians identify their supporters and voters to win an election; how they understand voter preferences; and how they support the majority of their constituents. In Chapter 7, ALN explained how the voting majority of the early twentieth century changed from rural into urban citing the change in economy as the main reason behind such change in fiscal policy.
ALN noted the mass migration of the rural population into the cities albeit political structures initially favored the rural population that eventually became the minority (94). In time, city dwellers gained stronger political influence and hence had greater say in US government. One point that appears to have been left out in ALNs discussion is the nature of initiative states and non-initiative states. It can be postulated that initiative states appear to be states with highly urbanized majorities while non-initiative states appear to have highly rural majorities.
This is an area that has not been thoroughly explored to explain the fiscal policy gaps between initiative states and non-initiative states. This crucial point could explain why fiscal policy change in non-initiative states are slower or appear to favor the status quo. A conjecture is that the dominant economy of a particular non-initiative state may be less affected by major economic transformations compared with initiative or highly urbanized states, or those with highly developed economies. In another light, ALN seemed to have succeeded in recognizing the following: [a] a change in the aggregate economic environment can alter the electorates views about the desirability of government programs; and [b] preferences also change as people learn about the consequences of policies; (90).
However, even though economic transformations and externalities have been recognized in the latter, ALN did not offer any economic explanations as to why voters became more conservative in the later part of the twentieth century, specifically in favoring and voting for a tax cut. It would have been more reasonable if ALN explored the tie up of voter preferences with economic transformations and externalities rather than simply stating that voters became more conservative in the later part of the twentieth century.
The said statement appears to imply that fiscal policy can change on the mere whim of the majority, or a visionary, when in fact policy changes start due to changes in the economy as ALN reasonably observed but insufficiently supported for the tax cut and reduced government spending. On the contrary, ALN successfully tied up the same premise for increased government spending in the early part of the twentieth century.
The idea that changes in fiscal policy reflect the changing nature of voter preferences could be more in line with the argument that voter preferences change with a corresponding change in the general economic condition. Economic changes are basically brought about by improvements or innovations in technology that affect how people make or earn their living as ALN correctly observed. It is also noteworthy that policy changes trigger a corresponding effect that could either be positive or negative. Initially, the political intention or cause might be for favoring the majority but due to some unexpected effect, the welfare of the majority becomes compromised.
This could explain why some politicians appear to be slow in immediately discerning the preferences of the majority. The arguments here have already shown that favoring the preferences of the majority could in fact have unintended side effects that could eventually disfavor the majority. When the capacity of constituents to make a living becomes threatened or is at risk, it becomes relatively easy to recognize that: when it came to fiscal policy preferences, U.S. constituent mood swings from conservative to liberal or vice-versa actually reflected a major transformation in the U.S. economy.
Authors Last Name, Authors First Name, Authors Middle Name Initial. Key Episodes in the Twentieth Century. Title of Book. Year of Publication.
”. When Legislators Get Out of Step. Title of Book. Year of Publication.