Presidents and their parties live and die on the performance of the economy. Every incumbent president defeated for reelection since World War I confronted a bad economy. Perceptions of economic health and economic opportunity shape voter choices and candidate strategies. So, nine years removed from the onset of the Great Recession, entering the eighth year of the Age of Obama, are voters and the economy better off?
"Are you better off now than you were for four years ago?" In 1980, presidential challenger Ronald Reagan famously asked voters to consider this simple question. And, for a majority of Americans confronted with high inflation, rising gas prices, slow economic growth, and the Iranian Hostage Crisis, the answer was "no." This is an example of retrospective voting wherein voters make a general appraisal of the state of the country -- especially the economy -- to decide whether or not to vote out the party in power.
In 1992, Bill Clinton pronounced "It is the economy, stupid!" as a reminder to keep his campaign focused on addressing the economic anxieties of the American public. Curiously, in terms of standard economic indicators the economy in 1992 was not in particularly bad shape. But economic anxieties were heightened as the economy was transitioning away from a manufacturing to an information-based economy. Job securities once widely enjoyed by the working- and middle-classes were increasingly uncertain. Clinton's successful framing of the economy highlighted several important implications about economic voting:
- Economic perceptions were at least as important as economic reality.
- Economic perceptions were influenced--but not determined--by economic reality. Other factors matter, such as the tone of economic news coverage and the framing of economic issues by political elites.
- Citizens were not just looking backward to make sense of the economy, they were also looking forward.
- Economic framing was constrained by economic reality but in an increasingly polarized political world, even relatively objective economic news was subject to partisan-based motivated reasoning.
So, What About Today? "What Have You Done For Me Lately?" Now, a quarter-century into this transformed economy and nearing the end of the Obama Presidency we once again find ourselves in a curious economic context. By most indicators, the national economy is doing at least OK, and it is doing much better than eight years ago. The economy has moved out of the great recession, unemployment has been reduced, and inflation remains low. John Sides of the MonkeyCage Blog correctly observes that--compared to previous presidents--Obama isn't getting adequate credit for a growing economy.
In fairness, not all of the economic signals are unambiguously positive. The national economy continues to grow at a slow pace while middle and working class income growth has been mostly flat. Critics of the Obama Administration further argue that declining unemployment masks an increase in the number of Americans no longer in the workforce, though this mostly reflects baby boomers moving toward retirement.
Regardless, we can argue about what where the "real economy" actually is in terms of how it affects the lives of middle and working class Americans but we think the larger point is this: If we focus on where the country actually is, particularly compared to eight years ago, the news is mostly good. We are unquestionably better off than during the great recession and there is little reason for pessimism if we look only at current economic conditions. But the question is not just where the economy (or the country) is, but where is it going. It is here that we find the source of public discontent.
Unlike 1992, the public largely recognizes the improvement in current economic conditions. Gallup reports increases in the percentages of Americans saying their financial situation is good or excellent and that their financial situation is better than it was a year ago.
Political scientists have long noted that voters give greater weight to the perception of the general economy surrounding them (socio-tropic assessments) rather than their own economic plight (pocketbook considerations) in voting. And, in today's America, evaluations of the national economy have also grown more positive. Gallup, for example, reports an increase in the percentage of Americans saying that now is a good time to find a quality job, while the Pew Center similarly finds the public perceptions of job availability are at their highest level in 15 years.
But Even Though Things Are So Good, They Still Feel So Bad! But even if Americans recognize that current economic conditions aren't so bad, their economic anxieties have continued to grow. We increasingly worry about being able to cover the costs of medical bills, enjoy their current standard of living, having enough money for retirement, being able to pay rent, mortgage, or housing costs, and being able to make minimum payments on credit cards. And, we are ill-prepared to handle an economic emergence. In a recent survey, two-thirds of Americans said they would struggle to come up with a $1,000 to cover an emergency.
Broadly speaking, current economic conditions have not reduced our economic anxieties. This means that positive assessments of current economic conditions are not necessarily translating into a more optimistic economic outlook. This is perhaps best reflected in the divergence in evaluations of current economic conditions and economic outlook as reported by Gallup. [See the chart here]
And, as the gang over at Vox reported last week, the Economic Innovation Group's analysis shows a major part of the problem in the disconnect between perceptions of our economy and its reality is the geography of the current recovery. The post-recession recovery has not been broad-based. Instead, most of the growth in recovered jobs and the creation of new private sector jobs is geographically isolated. Specifically, there are 73 counties that account for 34 percent of the nation's population that enjoy half of all new jobs and private sector firm creation. Their distressed communities dashboard shows the broad-based geography of where our economies are failing. And, those areas are home to the sort of Americans who are left behind in the new economy. [See the map here].
Time Machine Hot Tub Politics. This brings us to Donald Trump's promise to "Make America Great Again." Because it is a promise that suggests a return to a better time in the past, it has been fairly subject to much criticism. What time exactly are we are talking about? And what does this say about the economic gains made by women and racial and ethnic minorities? President Obama personally took issue with slogan at a commencement speech at Rutgers urging students that: "When you hear someone longing for the 'good old days,' take it with a grain of salt." President Obama further and correctly concluded that "by almost every measure, America is better, and the world is better, than it was 50 years ago, or 30 years ago, or even eight years ago."
The president's response may, however, miss the larger point. Trump's appeal finds resonance not because of dissatisfaction with the present--though there is plenty of that, especially among his supporters--but because of anxiety about the future. These anxieties go beyond standard economic indicators and reflect concerns that future may not be as prosperous as the past.
In many ways, this confirms much of what we know about economic voting. While voters reward (or punish) parties based on past performance, they are also looking to the future. Arguably, the public looks at the economy less as peasants concerned about the here and now and more as bankers imagining what economic growth will look like in the future. On this count, they may have good reason to be concerned.
Trump's appeal works not because current economic conditions are so bad (they really aren't) but (1) the economic recovery has not been widespread; (2) voters increasingly evaluate economic conditions through a partisan lens such that Republicans don't see an improving economy under a Democratic president; and (3) even voters who recognize current economic conditions have improved remain anxious both about their economic future and the economic future of the country.