Imagine if Mitt Romney were president right now.
Imagine if, 722 days after winning the election, President Romney were presiding over an economy growing at five percent a year, an unemployment rate dipping beneath six percent, and gasoline that was less than $2-a-gallon.
This is, after all, what Romney promised. Hell, it's more than Romney promised.
"I can tell you that over a period of four years, by virtue of the policies that we’d put in place, we’d get the unemployment rate down to six percent, and perhaps a little lower," he told Time during the campaign. December's tumble to 5.6 percent unemployment is, thus, two years ahead of schedule.
As for the five percent growth rate and the sub-$2 gas — that's more than Romney dared ask the electorate to expect. Tim Pawlenty — remember him? — promised to nudge growth to five percent and was roundly mocked for his troubles. And to find anyone promising $2-a-gallon gas, you need to dig up Michelle Bachmann's campaign lit (even Newt Gingrich didn't dare predict gas under $2.50, and he wanted to use space mirrors to light highways).
If Mitt Romney were president right now, he would be seen as the second coming of Ronald Reagan. There would be parades in the streets. The kids would have "severely conservative" tattoos. Men would be saying "gosh."
This is the problem with how Washington — Democrats and Republicans alike — interpret economic news. If Mitt Romney was president right now the economic numbers would be seen as proof that he was a remarkable success. They would appear to show that his agenda — repealing Obamacare, cutting taxes, deregulating the economy, greenlighting the Keystone XL pipeline — was precisely what had been needed to unleash the awesome growth engine that is the American economy. Conservatism would be ascendant. Liberalism would be discredited.
But Barack Obama won the election. The Affordable Care Act hasn't been repealed. Taxes were raised in 2013. Regulation has proceeded apace. The Keystone XL pipeline is no closer to being built. And yet the economy is roaring. The ambitious economic promises the GOP field made for their conservative policies have been achieved despite the continuation of liberal policies.
There is an easy liberal interpretation here: President Barack Obama is great. Liberalism is great. And it's simply entrenched media narratives and the GOP's relentless resistance to giving Obama credit for anything that has left his approval rating stuck at 44 percent.
But I come not to praise President Obama. I come to bury the lazy economic thinking that infects American politics and, particularly, political campaigns.
Washington tends to think of itself as the cause and everything that subsequently happens in the world as the result. A booming economy is proof that Bill Clinton is a genius, or that Ronald Reagan is a genius. A crappy economy is proof that Barack Obama is a naif, or that George H. W. Bush can't govern. It's a view of causality usually found in five-year-olds, but it is pervasive in American politics. It is also false.
Policy matters, of course. And, particularly in 2008, 2009, and 2010, it was, arguably, the driver of our economic fortunes. But, for the most part, the economy is driven by much beyond what happens in the White House and the Congress (caveat: the Federal Reserve is an immensely powerful actor, but come campaign time, politicians tend to pretend it doesn't exist).
It'll be some time yet before we know whether the economy is truly beginning to roar or the engine is about to sputter out. But the $2 gas that's left economists so optimistic isn't the fault of anyone in Washington; it's a mixture of technological innovation leading to more supply, falling global demand leading to yet lower prices for that supply, and Saudi Arabia refusing to slow production because it wants to choke America's nascent shale-gas industry (Brad Plumer has an excellent look at the causes behind the cheap gas here).
The reasons unemployment has fallen below six percent are varied, and some of them are problematic (like the reduction in labor-force participation). Government policy has played a role, and my read of the evidence is that premature austerity, particularly at the state and local government level, did a lot to slow the recovery. Nevertheless, anyone suggesting that the job gains over the last two years are the clear result of anything Congress did, or didn't do, is fooling themselves.
It's an unhappy fact of political life that the direction of the economy tends to decide elections even though it isn't actually driven by political decisions. Politicians tend to get around that by pretending otherwise: they take more credit than they deserve when the labor market is doing well, and they receive more blame than they deserve when it's flagging.
By the normal rules of politics — the rules we would be playing under if Mitt Romney had won the election — the recent economic news proves Barack Obama is a magnificent leader and liberal policies an economic boon. But the normal rules of politics, at least when it comes to interpreting the economy, are dumb.