It's the Economy, Stupid

'It's the economy stupid'. James Carville, President Bill Clinton's successful election campaign strategist, coined his maxim to leave no doubt about what matters most to the electorate. He knew that even those voter concerns that are runner-ups to the clear winner 'The economy' are mostly also about economics anyway. Politicians are acutely aware that democratic outcomes are largely determined by economics. Good economic news generally boosts the popularity of the incumbent party in government and bad economic performance that becomes associated with a particular political party can blight its election chances for a long time. This is true even when the rival parties have near identical economic policies, as did the two main parties in the UK during the run up to the financial crisis that caused the current 'Great Recession'. Politics is a very post hoc ergo propter hoc business, but a grasp of economics helps you sort out who, if anyone, is responsible for what. Economic policy often works with time lags, so measures taken by one government may well not have effect until after the next one is in power, but the public tends to associate the party in power with the good or bad news that is in the headlines during their term of office. In this extraordinary book top economist Vicky Pryce argues that economics, good and bad, is the driver of politics and is ignored at our peril. There are the wide-ranging and huge economic questions: How should we use economics to cost in and avoid the environmental damage that could lead to catastrophe? Are austerity measures the best way to tackle recessions or do they make them worse? How can we foster economic progress for poorer countries? How will the newly rich countries change the world economy, and with it the balance of powers?