Sunday, July 20, 2008

Does Economics Trump All?

Academics use a number of election prediction models, and almost all rely on macroeconomic variables—GDP growth, inflation, unemployment, etc. Most of these models predicted a Gore win in 2000 (which was actually correct since he won the popular vote) and a Bush win in 2004. At the moment the models predict a resounding Obama win in 2008, based on dreary economic news as we head into the election.

Obviously these models are not 100% accurate; their architects freely admit that factors such as wars, disasters, and issues of character also influence voting patterns. But they stick by their fundamental insistence that it is the economy which ultimately dictates election outcomes.

In aggregate, there is little to dispute about these models. If Americans are feeling good about their economic prospects, by and large they can be expected to vote for the candidate who represents the party in power; if they think their economic prospects are dim, they will vote for the opposing party.

But hidden behind the national numbers are huge state-by-state and regional disparities that can’t be explained by economics alone. In huge swaths of the South as well as parts of the Midwest (e.g., Utah) the GOP has consistently outpolled Democrats by margins that correlated poorly if at all with economic factors.

It is these areas where “culture war” issues and race play a major factor, often turning economics into a secondary and even a tertiary issue. Large numbers of voters in these regions are genuinely more concerned about gay marriage, the government taking away their guns, abortion, the perceived dilution of American culture because of illegal immigration, and fears of an even more secular America. While the economy may still influences these voters, their ballots often end up going to the candidates who promise a kind of cultural security which they feel is slipping way.

Some political observers, like author and WSJ columnist Thomas Frank, take this as evidence that people have been duped into voting against their economic interests, when in fact it is evidence that these people simply give priority to issues other than economics.

When rich investment bankers in New York vote Democratic, nobody says they’ve been duped, even though they may very well be voting against their immediate economic interests since Democrats generally favor higher taxes for the rich*. If asked to justify their votes, these well-off Democrats might cite the party’s liberal social positions or less belligerent foreign policy; in exchange for these positions, they’re willing to accept higher taxes.

But when poor whites vote Republican because they oppose gay marriage or abortion, they’re assumed to be gullible. Unfortunately for Democrats and economic progressives, the disproportionate electoral sway of America’s Deep South and Midwestern states hands these “values” voters extra weight both in the Electoral College and the Senate.

In the end, it’s hard to accept any uni-causal case for the election of a U.S. president. There are too many factors, too many cross-currents, and it’s impossible to sort them out. The economy ultimately may swing the election, and certainly it will be more important than it was in 2004; but there are many motivations that can sway people on the margins, and have large electoral impacts.

As the Democrats have learned, in order to truly be competitive in certain parts of the country they have had to tone down their gun control rhetoric, speak more openly about faith and religion, and walk a fine line on gay rights (opposing gay marriage while supporting civil unions). This is what many voters in these regions want to hear, and the strategy has begun to pay dividends: Democrats are winning elections for state offices and Congressional seats in once-solid GOP territory, and Obama is competitive in states that haven’t voted Democratic for 40+ years.

The Republicans are in a much more difficult position because America overall is more socially liberal and economically progressive than the mainstream GOP. The party’s success this decade in some sense represents an anomaly; Bush actually lost in 2000, and won in 2004 largely because of a fearful citizenry that wanted to support a “war-time president.” Looking forward, it is hard to see how the far right’s message will resonate with voters, especially younger voters whose only taste of GOP rule has been an administration characterized by epic incompetence, cronyism, anti-intellectualism, and economic downturn. It will be interesting to see how the GOP retools, especially if they lose big in November.

Stay tuned….

*Wealthy individuals voting Democratic might be right to think that their long-run economic prospects under Democratic rule will be better than under Republican rule even if their immediate economic interests take a hit.

P.S. See here for a very interesting analysis of economic performance under Democratic and Republican administrations; it may surprise you.

Jason Scorse

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