It's Not the Economy Anymore, Stupid' -- 2nd Update
November 12 2019 - 1:53PM
Dow Jones News
By Greg Ip
President Trump has presided over solid economic growth and much
lower unemployment than economists would have expected a few years
ago, a record he proudly touted in a speech in New York
Tuesday.
Mr. Trump is counting on that record carrying him to re-election
next year. Conversely, Democrats see hints of weakness, especially
in manufacturing-intensive swing states, that could derail those
plans.
Yet both could be working from an outdated playbook. Polarized
politics mean that voters' views of the economy are increasingly
shaped by their party preference, rather than the other way around.
And for some key voting blocs, noneconomic issues such as
immigration, race relations and Mr. Trump himself have superseded
economic concerns in determining their vote. Thus, absent a serious
recession or spectacular boom, the economy may have little bearing
on how Americans vote next year.
Last week's elections offered a hint of that growing divide.
Republicans were routed in state and local elections in northern
Virginia and local elections in the Philadelphia suburbs of Chester
and Delaware counties, prosperous areas where unemployment has hit
decade lows. Last year, Republicans lost control of the House of
Representatives despite heading into the midterm election with
strong economic growth driven by their tax cut. Yet in counties
disproportionately dependent on manufacturing, a sector hit hard by
the trade war and global slowdown, Mr. Trump's approval has risen,
analysis of polling data by The Wall Street Journal has found.
To be sure, congressional, state and local elections may reveal
little about the role of the economy in presidential contests. Ray
Fair, a Yale University economist who has used economic indicators
such as per capita income to predict presidential vote shares since
1980, said there isn't enough data to conclude their predictive
power has weakened in recent years. His model currently predicts
Mr. Trump will win next year if consensus economic forecasts hold
true.
Yet there are signs economic trends' sway over presidential
contests has weakened. Political scientists John Sides, Michael
Tesler and Lynn Vavreck, authors of "Identity Crisis: The 2016
Presidential Election Campaign and the Battle for the Meaning of
America," have found that from John F. Kennedy through George W.
Bush, consumer confidence and presidential approval were positively
correlated. But that correlation disappeared under Barack Obama and
has been absent during Mr. Trump's three years in office. His
approval rating has remained both unusually stable, and low
relative to consumer confidence. "His approval numbers are 15
points lower than where you'd have expected them to be," said Mr.
Sides, who teaches at Vanderbilt University.
One reason is that "partisan divides have put people into
parallel universes when it comes to understanding and interpreting
the economy," said Jonathan Rothwell, principal economist at
Gallup. Republicans consistently rated economic conditions more
poorly than did Democrats when Mr. Obama was president. Those
attitudes flipped almost overnight with Mr. Trump's election. In
August, 84% of Republicans were satisfied with the economy compared
with just 36% of Democrats, the largest such spread since years
five and six of George W. Bush's administration, according to polls
conducted by NBC News and The Wall Street Journal.
"Each group has its own narrative about why GDP is up or down or
why employment is high or low," Mr. Rothwell said. Voters can
easily find "the story that matches his or her political
preferences" amid all the information available.
Mr. Trump's ascendance in 2016 also marked a shift away from
economics in voter priorities. Mr. Sides and his co-authors cite
survey data to conclude that "race, ethnicity and religion" were
more important than "economic insecurity" in driving support for
Mr. Trump during the Republican primary. They also played a bigger
role in the general election than in previous elections, they
found. For voters who switched support from Mr. Obama in 2012 to
Mr. Trump in 2016, "issues around race and immigration were more
important than their own personal economic circumstances," Mr.
Sides said.
Polls suggest economics will again take a back seat next year.
Just 11% of voters rank any economic problem as the biggest problem
facing the country now, according to Gallup, the lowest level in at
least 18 years, while 34% cite government or poor leadership.
This doesn't prove the economy won't matter at all. When the
economy cratered in 2008, economic assessments of Republicans and
Democrats converged. Mr. Sides noted neither Mr. Obama nor Mr.
Trump have been tested by an actual recession that began under
their watch. Mr. Rothwell predicted that party platforms that cater
to partisan Democrats' and Republicans' noneconomic priorities are
apt to turn off independents. "There's room for a candidate to have
a well-focused economic appeal to that group of people and do
rather well."
In theory, even if economic conditions don't drive the national
vote, they may do so enough in swing states to sway the election.
An election model designed by Moody's Analytics combines state and
national economic data with political indicators such as the
president's approval to forecast the electoral college winner.
Yet after correctly predicting every election from 1996 through
2012 it wrongly called Mrs. Clinton to win handily in 2016. Mark
Zandi, the firm's chief economist, said the model didn't capture
how turnout trends in key industrial and Midwestern states would
hurt Mrs. Clinton and help Mr. Trump. The model now incorporates
turnout and predicts Mr. Trump will win if turnout is typical, said
Mr. Zandi, "but I'd be surprised if it's typical."
Write to Greg Ip at greg.ip@wsj.com
(END) Dow Jones Newswires
November 12, 2019 13:38 ET (18:38 GMT)
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