How Does the Economy Shape Policy Preferences?∗

How do changes in the economy translate into shifts in aggregate preferences for a more or less activist government in the U.S.—a construct referred to as “policy mood”? Existing theories pose alternative explanations based on either a Maslow Hierarchy of Needs model, where citizens prefer an activist federal government to expand the social safety net when the economic future looks bright (Durr 1993), or a Phillips Curve model (Erikson, MacKuen, and Stimson 2002), in which the objective economic maladies of inflation and unemployment drive policy mood. We show that neither of these explanations withstands empirical scrutiny when analysis is extended beyond the time period of the original authors’ work, suggest the existing wisdom tying the economy to policy mood is wrong, and offer some alternative avenues to pursue in search of an answer to the question: What moves policy mood? ∗Thanks to all at the conference on Valence Politics and the Continuing Economic Crisis in Comparative Perspective at Texas A&M, and in particular to Guy Whitten and Randy Stevenson.