Keith Hennessy has a very interesting post on the different roles of White House economic advisers... One reason health care turned out so well for the Dems was probably that the NEC, and Larry Summers, was not in charge of it.
Matt Yglesias continues to push the Benjamin Friedman thesis, without mention the caveat which I think is the most important. That recessions tend to badly damage the party in power and help the party out of power. If the party out of power is an anti-foreigner, conservative party, then they will be emboldened. If the party out of power is led by Franklin D. Roosevelt or Barack Obama, then the anti-foreigner/race based stuff will never come into play.
Matt doesn't really provide any good explanation for why the Great Depression or the crisis of 2008 didn't result in more zenophobia (in the 2008 case, this didn't come until after Obama was sworn in). He says "Many expected racial tension during the 2008 presidential campaign, but it barely materialized." That's because the nation shifted toward Barack Obama and Nancy Pelosi and away from bankers and old conservative white guys. During the Great Depression, he says it didn't happen because 1934-1937 was the fastest period of economic growth America has ever experienced. I think this is wrong though. 1934-1937 was also a fast period of growth in Germany, what was the difference? The difference was that, in the US, the Republican Party was thoroughly discredited by the Great Depression, and the alternative, the Democrats, were much less zenophobic and against the free market orthodoxy, which meant that the nation subsequently became less zenophobic and more anti-laissez faire as the Democrats took control of government.
In Defense of the Conventional Wisdom
34 minutes ago