Many on the right and center indicate that in order to restore the economy, President Obama needs to do more to cater to the whims of rich businessmen. Many on the left feel that this is exactly wrong and that in order to restore the economy, President Obama needs to do more to stick it to the rich and dispossess them. History suggests that both are wrong. Economic recovery would be good for business, but businessmen who may be good at running businesses are extremely bad judges of macroeconomic policy. Consider, for example, the Great Depression, and the monetary stimulus that economists from Milton Friedman on the right to Christina Romer on the left now agree ended it.

The Depression was not good for big business. Nor was it good for banks and large financial institutions. Ending the Depression required stepping on some toes, but fundamentally the Depression was a negative-sum experience and everyone was better off when growth returned. But here’s a couple New York Times articles from June of 1933 — “Plea” from June 2, “Return to Gold” from June 4 — showing the business community’s intense hostility to the expansionary monetary policy that eventually saved all their skins:

The fact of the matter is just that running an economy is not the same as running a nationwide network of big box retailers, or a diversified conglomerate, or a large bank, or an innovative electronics company, or any other successful business. People generally understand this in reverse. Nobody ever said “Bill Clinton was a good president, so he’d be a great replacement for Bill Gates when he steps down at Microsoft.” But it’s true the other way ’round as well. Businessmen have certain kinds of prejudices about economic management that neither reflect reality nor their own self-interest. You have to ignore them, and create the conditions where, in practice, there’s enough demand for them to expand their activities.

Corey Robin has a historically informed piece in the London Review of Books that manages to overthink the American public’s aversion to taxes and spending:

And here Democrats like Obama and his defenders, who bemoan the stranglehold of the Tea Party on American politics, have only themselves to blame. For decades, Democrats have collaborated in stripping back the American state in the vain hope that the market would work its magic. For a time it did, though mostly through debt; workers could compensate for stagnating wages with easy credit and low-interest mortgages. Now the debt’s due to be repaid, and wages – if people are lucky enough to be working – aren’t enough to cover the bills. The only thing that’s left for them is cutting taxes. And the imperialism of the peasants.

Compare to the actual structure of public opinion:

Recall that Barack Obama didn’t negotiate his debt ceiling deal with the American voting public. He didn’t even negotiate it with the median member of the U.S. House of Representatives. He negotiated it, primarily, with John Boehner acting as leader of a party cartel that controlled the House. The cartel in question is deeply committed to avoiding tax increases, so a deal was struck that avoided tax increases. But the public’s resistance to higher taxes doesn’t require explanation — there’s nothing to explain.

Survey data tends to support Robin’s observation elsewhere in the piece that most people seem unenthusiastic about “the state” because they don’t perceive it to be doing much to deliver services for them. But as we see here in the poll, programs that people do perceive as benefiting them — like Social Security and Medicare — are very popular. These are also, in fact, the two largest federal domestic programs. So again, on the issues, I don’t think there’s anything mysterious happening here. If we held a referendum purely on the question of tax hikes and entitlement spending, we’d get some very left-wing answers. The American political system just doesn’t operate that way.