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Maheshiri and Winston: “America’s Decades of the Second Great Depression”

MONews
3 Min Read

in RealClearPoliticsprovocative thesis, Vikram Maheshri (U. Houston) and cliff winston* (Brookings):

The United States experienced the Great Depression in the 1930s, and a quarter of the entire working population became unemployed. Although not officially acknowledged, a growing body of research evidence suggests that the United States has been experiencing a second Great Depression for decades, driven by events such as 9/11, the Great Recession, the growth of social media, and the coronavirus pandemic. However, the causes and consequences of this depression appear to be primarily psychological rather than economic, with significant portions of the population becoming socially disengaged and depressed.

… Trump did little to address the Second Great Depression. Instead, he used that discomfort to win two presidential elections by persuading a significant segment of the public to vote for him because he expressed their fears and anxieties and encouraged them to join movements of like-minded people. In fact, a closer examination of the links provided above shows that the Second Great Depression disproportionately affected men, young people, and rural Americans—those who formed the base of Trump’s political support.

The full article is below: hereBecause this is a paper that is difficult to evaluate quantitatively and rigorously, statistical data is not provided. As noted in the article, it is clear that self-reported depression has increased.

source: gallopMay 2023.

(*Full disclosure: I was Dr. Winston’s RA 40 years ago).

Was Donald Trump’s candidacy more attractive to people suffering from mental depression? This is much more difficult to assess and requires micro data to do so.

I can evaluate the following correlation at the state level between depression prevalence (2020) and voting for Trump in the last election:

Figure 1: Trump voter turnout (vertical axis) and depression prevalence (horizontal axis), both in %. LOESS (Local Weighted Regression Fit, 60% Window) (red line). source: NBC, Ministry of Health and Welfare.

OLS regression results:

Robust regression results:

Point estimates indicate that each 1 percentage point increase in depression prevalence is associated with a 1.3 to 1.7 percentage point increase in Trump voter turnout.

Of course, correlation is not causation. And I expect this to be a “weak” regression result from Leamer’s perspective. But I was surprised to see how much variance could be explained by simple bivariate regression.

We could try to account for the endogeneity of depression prevalence using 2SLS, but I’ll leave that to others to try. A better approach would be to relate voting behavior to an individual-level diagnosis of depression. For now, I think this is an interesting correlation that supports the Maheshri-Winston thesis.

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