Do We Really Care About the Economy?

By: Esha Deokar

An analysis of the economy’s impact on voter turnout in the 2016 and upcoming 2020 election.

What might voters be considering when they arrive at the polls on November 3rd of the next year? Some may vote along party lines, regardless of candidate, incumbent party or president, or state of the country. Others may be motivated by salient issues, whether they’re social, fiscal, or environmental. Historically, however, most elections have been significantly influenced by the overall state of the economy. Given speculation by economists on the likeliness of a 2020 recession, it is expected that current economic performance and the looming threat of a recession will be noticeable issues in the upcoming elections. The big picture question here is whether or not a recession may cost Trump the 2020 presidency.

Julia Falcon, an author at HousingWire, asserted that a recession is likely to occur in 2020. She consulted a panel of more than 100 economists, most of which agreed that the next recession would happen in the next year. Panelists found that trade policy and stock market corrections may cause the future recession. The graph below illustrates the percentage of panelists and the quarter in which they expect the recession. However, as the year went on, Stephanie Flanders of Bloomberg asserted that 2020 would see continued economic expansion. Her article was written October 2019, three months after the HousingWire piece. Bloomberg Economics predicts a 2% growth in the economy through 2020, since real income continues to rise and unemployment sinks. Indeed, Myles Udland, in an article for Yahoo Finance, predicts that the October jobs report boasts 128,000 new jobs, which would delay the recession past 2020. Furthermore, the NASDAQ closed at a record high since July. The perception of the likeliness of a recession has drastically changed over the past couple of months, but the underlying question is how the economy and voter impact interact and if the two are even somewhat linear.

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Economists say 2020 recession likely, but housing market won’t be the cause. July 2019. Julia Falcon. Graph. https://www.housingwire.com/articles/49631-economists-say-2020-recession-likely-but-housing-market-wont-be-the-cause/

The 2016 elections certainly demonstrate the effect the overall state of the economy has on candidate vote share. In 2015, although inflation remained below 2% per year, the Fed was raising the federal-funds rate incrementally. According to Bloomberg, economists theorized that inflation would begin to increase once unemployment got too low. However, the Fed’s premature response to this theory slowed economic growth by the time the 2016 election came around. Thus, the candidate Donald Trump was able to weaponize economic performance, convincing voters that stationary wages were the fault of a Democratic president and poor economic policy. Many believed him, as exit polls from 2016 show that those who rated the economy as “poor” voted for Trump by a 2:1 ratio.

However, the country is headed to a time where partisanship, perhaps as a consequence of the election of Donald Trump,  matters more than macroeconomics. While Democrats hope that this threat of a recession will sway people, most voters have already made their minds, where Republicans, on average, view the economy as performing well, while Democrats believe the opposite. According to FiveThirtyEight, 88% of Republicans positively described the economy, while only 39% of Democrats followed suit. Thus, the gap between the state of affairs and partisanship is slowly widening. Neither party has shifted in response to the economy’s shift, as shown by the following graph from the New York Times.

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Why the Economy Might Not Sway 2020 Voters. Ben Casselman and Jim Tankersley. 2019. Graph. https://www.nytimes.com/2019/10/29/business/economy/survey-politics-economy.html

Amber Wichowsky, a political scientist at Marquette University, comments on the increasing polarization of the political climate; being able to predict the economy is gradually becoming less important than sticking by party lines. This mindset gap has been growing since the start of the 2000s.

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Why the Economy Might Not Sway 2020 Voters. Ben Casselman and Jim Tankersley. 2019. Graph https://www.nytimes.com/2019/10/29/business/economy/survey-politics-economy.html

On an individual level, the graph represents how party affiliation affects the way in which people view the state of the economy. Largely, those who are doing well and are Democratic may think they would do better under a Democratic president and vice versa.

The people to watch out for, especially when it comes to economic voting, in the 2020 election are not Republicans whose businesses are faring poorly or Democrats who are doing well. The independent voters may provide a boost for either party depending on a myriad of factors outside predictive influence. Currently, the Democratic candidates take to the debate stage to berate the state of the economy and promise to change it through their policies, while President Trump boasts about his myriad of economic achievements. Unfortunately, the economy has transformed from a predictive electoral factor to yet another marker for partisanship.

Works Cited:

Udland, Myles. (2019) Stocks Have Canceled the 2020 Recession. Morning Brief. Retrieved from https://finance.yahoo.com/news/stocks-have-canceled-the-2020-recession-111918255.hml

Flanders, Stephanie. (2019) With US Help, Global Growth in 2020 May Recover a Bit From a Dismal 2019. Bloomberg Businessweek. Retrieved from https://www.bloomberg.com/news/features/2019-10-24/the-u-s-will-likely-avoid-recessin-in-2020-here-s-why

Falcon, Julia. (2019) Economists Say 2020 Recession Likely, But Housing Market Won’t Be the Cause. HousingWire. Retrieved from https://www.housingwire.com/articles/49631-economists-say-2020-recession-likely-but-ousing-market-wont-be-the-cause/

Casselman, Ben. Tankersley, Jim. (2019) Why the Economy Might Not Sway 2020 Voters. NYTimes. Retrieved from https://www.nytimes.com/2019/10/29/business/economy/survey-politics-economy.html

Ponnuru, Ramesh. (2019) The Fed Helped Trump Win the 2016 Election. Bloomberg. Retrieved from https://www.bloomberg.com/opinion/articles/2019-11-04/the-fed-helped-trump-win-the-016-election

Roberts, Dan. (2016) Why Hillary Clinton Lost the Election: the Economy, Trust, and a Weak Message. The Guardian. Retrieved from https://www.theguardian.com/us-news/2016/nov/09/hillary-clinton-election-president-los

Image source: https://abcnews.go.com/GMA/News/video/10-democratic-candidates-debate-stage-1st-time-65558241