Leaders don’t matter as much as you think

Leaders do matter, sometimes (as with Hitler) quite a bit.  But overall I believe that leaders matter much less than people think.  It’s human nature to anthropomorphize big changes. Thus the neoliberal wave of the 1980s and 1990s, which affected almost all countries, is seen as the “Reagan-Thatcher era.”

Americans find this easier to see in other countries than our own.  Thus we understand that Switzerland will be Switzerland and Portugal will be Portugal, regardless of who is leading those two countries.  But we also talk about “Obama’s America” and “Trump’s America”.

Perhaps my claim would be easier to understand if we looked at Australia, one of the two countries that is most similar to the US:

MALCOLM TURNBULL had always seemed to be what Australians call a “small-l liberal”. Unlike many in the Liberal Party, which despite its name is Australia’s main conservative force, he was a defender of progressive causes. In 1986, as a lawyer, he successfully challenged a bid by the British government to prevent the publication in Australia of the memoir of a former British spy. He led the failed campaign in 1999 for Australia to become a republic. And unlike his fellow Liberal and predecessor as prime minister, Tony Abbott, he has no doubts about global warming.

Yet since becoming prime minister two years ago, Mr Turnbull seems to have jettisoned many of his small-l views. The most obvious reversal concerns immigration. In 2013, when a government led by Labor, now the main opposition party, sought to curb temporary work visas, known as 457s, Mr Turnbull called the visas the “heart of skilled migration”; he dismissed as “chauvinistic rhetoric” claims that they robbed Australians of jobs. Yet Mr Turnbull recently announced sharp restrictions on 457s: most recipients will no longer be able to apply for permanent residency, and the number of eligible professions has been cut by a third (actors, biochemists, detectives, metallurgists and web developers are among those who need no longer apply). To oblige immigrants to learn “Australian values”, the government wants to add questions on topics like child marriage, domestic violence and female circumcision to the test they must take before they become citizens. Mr Turnbull described all this as “standing up for Australian jobs and Australian values”. The sudden blast of “Australia First” rhetoric has left many asking what Mr Turnbull really stands for. . . .

He used to advocate a market-driven mechanism obliging polluters to cut emissions of greenhouse gases. Now he has embraced Mr Abbott’s much criticised alternative: an A$2.5bn ($1.8bn) public fund to pay businesses to curb emissions. By the same token, he used to argue that parliament should legalise gay marriage; now he wants to hold a plebiscite first, just as Mr Abbott proposed.

Notice how just as right wing nationalism is sweeping the globe, a liberal Australian leader suddenly becomes a right wing nationalist.  Sad!

I’m not saying that leaders don’t matter at all—that would be crazy (again, Hitler). Rather I’m claiming that they don’t drive the ideological waves that impact the world; rather they usually surf along the tops of those waves.  Trump’s Supreme Court pick is a bit different from Hillary’s, and his trade policy will be a bit different. His Obamacare 2.0 will be a bit different.  The new tax deal with be a bit different from the “lower corporate rates in exchange for infrastructure” deal that Hillary would have struck with Congress.  His incompetence will lead to more screw-ups, like this one, than what would have occurred under Hillary.

But in the general scheme of things not much will change.  Unless of course Trump gets us into a nuclear war with N. Korea (which I doubt).

PS.  The same is true of monetary policy.  The Fed will stick to its 2% inflation target regardless of whom Trump picks.  Bloggers (as a group) probably have more impact on monetary policy than Trump.  It’s the zeitgeist, stupid.

PPS.  The same is true of the Supreme Court—it will mostly go with the flow, regardless of who is picked.  During the liberal era of the 1960s, even GOP justices voted liberal.



18 Responses to “Leaders don’t matter as much as you think”

  1. Gravatar of Matthew Moore Matthew Moore
    30. April 2017 at 07:46

    So… Democracy works?

  2. Gravatar of ssumner ssumner
    30. April 2017 at 07:57

    Matthew, yes.

  3. Gravatar of Mark Holder Mark Holder
    30. April 2017 at 09:14

    And his appointment of an Attorney General who wants to revitalize our disastrous “war on drugs”?
    That seems like a significant and very negative development in the lives of thousands of people.

  4. Gravatar of ssumner ssumner
    30. April 2017 at 09:37

    Mark, Yes, I agree. Although of course there was a war on drugs under Obama, and we don’t yet know for sure how much will actually change out in the real world.

  5. Gravatar of Jim Glass Jim Glass
    30. April 2017 at 09:43

    “I believe that leaders matter much less than people think”

    Gee, I should have waited a couple hours instead of putting this comment in an older thread…


  6. Gravatar of Major-Freedom Major-Freedom
    30. April 2017 at 11:11

    Another fascist move by the Trump administration, shrinking the state department by 2,300 employees:


  7. Gravatar of Lorenzo from Oz Lorenzo from Oz
    30. April 2017 at 14:30

    Without disputing your general point, Malcolm Turnbull has to keep his own Party onside, and his more socially conservative Coalition partner. He was always rather down one end of both, so this can be seen as a drift to more where his support base is. Now, why his support base is there gets back to your general trends point.

  8. Gravatar of Potato Potato
    30. April 2017 at 14:34


    A strong defense of the Tolstoy-esque perspective of history. I’m not entirely convinced the rule applies in general, but it certainly applies to democracies in the modern era.


    The DEA will do what it does. These institutions have a will of their own, and largely do what they want. Due to self selection effects, the institutional internal push/drive/motivation is inherent in whatever “mission” defines the agency.

    A change in AG is less of a change than you presume. Hilariously enough (and Scott may disagree), typically the federal institution changes the person, and not the other way around. This is 1000% more true for idiots like politicians and bureaucrats (who are weak willed, average intelligence, and people pleasing conformists by Nature.


  9. Gravatar of Benjamin Cole Benjamin Cole
    30. April 2017 at 19:18

    Bloggers vs. Trump on the Fed.

    Interesting toss-up. Verily, the Fed is ossified, and dead-set on a 2% inflation target, which is probably a ceiling.

    On the other hand, were Trump lucid and capable of sustaining a thought for several minutes, he could pack the FOMC with his picks in the coming two years.

    Ronald Reagan packed the FOMC with four votes and they actually outvoted and over-ran Paul Volcker on one occasion, voting for easier monetary policy.

    Matters come to head in February 1986, when the four recent Reagan appointees on the Fed board voted to cut the discount rate, despite and over Volcker’s heated objections.

    Volcker—by then, the very icon of monetary stability—consequently threatened to quit, and the Reaganauts beat a hasty retreat, not wanting the PR mess.

    Though Reagan lost that round, the lesson for Trump is obvious: Trump should similarly pack the Fed board, and remember that Chair Janet Yellen has not the stature of Volcker, and her term expires
    in 2018 anyway (along with Stanley Fischer’s, the vice chair).

    Trump can appoint a pro-growth Federal Reserve, if he puts his mind to it. It may be the most important aspect of his Presidency, if he can pull it off.

    Sheesh, now even Lars C. says the Fed is too tight.


    And Gauti Eggertsson, Neil Mehrotra, Jacob A. Robbins say the Fed’s interest rate should be now…negative!

    Not for any reason he knows, Trump today is justified in proposing larger federal deficits, and strong-arming the Fed into submission. Trump should appoint four wild-eyed money-printers to the FOMC. He should exhume Arthur Burns and make him the Fed Chief.

    As maintaining negative interest rates is a dubious proposition when there is $4,500 in paper cash in circulation for every US resident (and rising rapidly), the Fed should ponder either QE or helicopter drops.

    Or, the Fed can not change, and can target 2% inflation and asphyxiate the global economy.

    See David Beckworth on the Fed as monetary superpower.

    Richmond Fed scholars say the Fed has been getting tighter and tighter ever since Arthur Burns…


    The Richmond guys are probably roughly right. After all, what has happened to inflation, interest rates and real economic growth since the 1980s?

    I hope Trump installs a printing press in the lobby of the Fed with the meter set on “High: Red Hot!”

  10. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    30. April 2017 at 19:40

    For a real leader who makes a difference;


    Venezuelan President Nicolas Maduro hiked wages and handed out hundreds of free homes Sunday amid his efforts to counter a strengthening protest movement seeking his removal.

    On his regular television show, “Sundays with Maduro,” the president ordered a 60 percent increase in the country’s minimum wage starting Monday. It was the third pay increase the socialist leader has ordered this year and the 15th since he became president in 2013.

    It is small solace to workers who seen the buying power of their earnings eroded by a sinking currency and the world’s highest inflation – forecast to accelerate to 2,000 percent next year, according to the International Monetary Fund.

  11. Gravatar of Cooper Cooper
    1. May 2017 at 13:51

    Turnbull is forced to accede to the demands of his nationalist flank in order to keep his coalition together. He controls only 76 of 150 seats, the smallest possible majority.

  12. Gravatar of Major-Freedom Major-Freedom
    1. May 2017 at 14:37

    Leaders don’t matter much? They have to be a Hitler before they have an impact?

    How about Obama defrauding and stealing billions of dollars from Fannie and Freddie investors, in order to keep his pathetic socialist “Obamacare” disaster afloat for the next administration to clean up?


  13. Gravatar of Major-Freedom Major-Freedom
    1. May 2017 at 14:46

    The DNC is trying to bury a class action law suit against them regarding them undemocratically favoring Hillary Clinton during the primary:


    My favorite:

    “The DNC has now stated in a court of law that there is no enforceable obligation to run the primary elections of this country’s democracy in a fair and impartial manner”

    In other words, the democratic party views itself in no way beholden to voters’ interests whatsoever.

  14. Gravatar of Benjamin Cole Benjamin Cole
    1. May 2017 at 16:34

    Three Australia. From what I see the Reserve Bank of Australia should cut interest rates to boost flagging growth and inflation. Yet the RBA publicly frets about financial instability, and the average price of a house in Sydney now tops $1 million.

    House prices again!

    We see the Boston Fed President, Eric Rosengren, again talking about real estate prices.

    Of course, both Australia and the United States run large current account trade deficits, which results in soaring house prices in any market where supply is constrained.

    Central bankers and macro economists need to further study the relationship between property zoning, trade flows, and monetary policy

  15. Gravatar of Major-Freedom Major-Freedom
    2. May 2017 at 16:16

    “Leaders don’t matter as much as you think”

    Well just how much are people being straw manned in what they think here?

    It is a vague, essentially meaningless statement

  16. Gravatar of ssumner ssumner
    3. May 2017 at 08:57

    Lorenzo and Cooper, I agree, and that supports my point.

  17. Gravatar of C8to C8to
    7. May 2017 at 14:10

    The trouble with the term right wing nationalist is that it’s pretty broad and most people assume the worst.ok he’s on the centre right party and extremely centre and he’s a nationalist in the sense he runs the Australian government. It sounds laughable though to describe mt as a right wing nationalist.

  18. Gravatar of Mark Holder Mark Holder
    25. October 2017 at 08:23

    I’m just chiming in again with a link about the “war on drugs” ( https://www.vox.com/policy-and-politics/2017/10/24/16534812/trump-sessions-war-on-drugs ) in reply to ssumner’s point about not knowing whether there will be much of a change relative to the Obama admin.

Leave a Reply