The right allows financial crises, the left handles financial crises

[ProSense]

The right allows financial crises, the left handles financial crises

Or so argues political scientist Lawrence Broz in a new paper (pdf):

Financial cycles of boom and bust are as old as finance itself -- a fact that has led some observers to infer that human nature may be a fundamental cause of financial cycles. But “politics” also influences financial cycles by way of government policies and regulations. I argue that policies and regulations vary predictably with the partisan character of the government, creating a partisan-policy financial cycle in which conservative, pro-market governments preside over financial booms while left-wing governments are elected to office after crashes.

My sample consists of all bank-centered financial crises to hit advanced countries since World War II, including the current “Subprime” crises -- a total of 27 cases. I find that governments in power prior to major financial crises are more likely than the average OECD country to be right-of-center in political orientation. I also find that these governments are more likely than the OECD average to be associated with policies that predict crises: large fiscal and current account deficits, heavy borrowing from abroad, and lax bank regulation. However, once a financial major crisis occurs, the causal arrow flips and government partisanship becomes a consequence of crises. I find that the electorate moves to the left after a major financial crisis, and this leftward shift is associated with changes in government partisanship in that direction

Broz left part of this cycle out: Once the left takes power, the right unburdens itself of any sense of responsibility for the crisis and begins relentlessly attacking the left for both the drastic measures necessary to repair the financial sector and the devastating economic aftereffects of the meltdown.

[Peacetrain]

1. Exactly... we always have to clean up their financial messes!

[ShortnFiery]

2. There's no LEFT in today's America.

Only one CORPORATE duopoly with two branches. Our branch throws "the little people" a few straps time and again. :(

[ShortnFiery]

3. IMO, it's RIGHT vs. CENTER if we are talking about the Present Time Period. eom

[ProSense]

4. IMO, it's left vs. right and kooks. n/t

[ShortnFiery]

5. Neither the Clinton Administration nor the Present one is "Left" in any way, shape or form.

Hell, we don't even have a Labor or Social Democratic party in this country.

Sorry, President Obama's Administration is by all varieties of objective definitions, Centrist.

[ProSense]

6. Well, you keep waiting.

Progress is being made, and I love it.

[Zoeisright]

7. Who the hell is unreccing this? Are there some Wall Street leeches on the board?

God.

[Cha]

9. Must be some repuke lurkers.

[Cha]

8. We handle all their messes. nt

[StopTheNeoCons]

10. See related thread: RNC makes mess of its finances.....nt