Posts Tagged ‘Midterms’

Will The State Of The Economy Determine The Midterm Outcomes?

Tuesday, October 18th, 2022


On the evening of 3 November 2010, President Barack Obama faced a White House East Room full of reporters after his party lost 64 House seats in that day’s midterm election. Among other things, the humbled President said, “I’m not recommending for every future president that they take a shellacking like I did last night.” Well, to quote Hamlet, it is entirely possible on the evening of 4 November his recommendation may be, “More honored in the breach than the observance.”

Why? Because it was true in 1992 when James Carville coined the phrase, and it’s true today: “It’s the economy, stupid!”

With the midterms three weeks away, it is becoming clearer every day that the number one, overarching concern of most Americans is what they perceive to be a bad, and worsening, economy and how it affects them.

How do those Americans define the word “economy?” They don’t need advanced degrees in Economics to do it. No, what “economy” means to the average American is:

1. What does it now cost to buy the things I need and want?

2. Do I have enough money to do it?

Mr. and Mrs. Average American can answer those two questions in a nanosecond, no algorithms required.

1. The year-over-year rate of inflation is now 8.2%, down from 8.3% in August, according to the Labor Department’s Consumer Price Index, which measures how much Americans pay for certain goods and services. That is more than four times the Federal Reserve’s  benchmark target of 2%. Due to the Fed’s actions to combat the spike in inflation, interest rates for borrowing have risen commensurately. Everything now costs more than a year ago. A lot more.

To put this in human terms, consider that here in Massachusetts we were greeted two weeks ago with the announcement that, despite the Commonwealth regulating them, electricity costs will rise 64% starting with November’s bills. That number is not a typo. The coming winter will bring serious problems for many people here in the Northeast.

So, the answer to the first question is: A lot more than a year ago.

2.  The Bureau of Labor Statistics reported on 13 October real average hourly earnings decreased 3.8% from September 2021 to September 2022. That’s a cut in pay.

For our Mr. and Mrs. Average American, this means that although everything costs more, take home pay is 3.8% less. For them, trying to keep up with inflation is like trying to outswim a Navy Destroyer. With every stroke they fall farther behind.

Some 46% of people now call their personal financial situation poor, up from 37% in March, according to a new poll by The Associated Press-NORC Center for Public Affairs Research. Moreover, although 54% say their finances are good in the latest survey, that figure was at least 62% through the global recession caused by the pandemic in 2020, and even in late 2021 and early 2022 as prices began to rise across the country.

As if that’s not enough, Bloomberg economists reported yesterday a US recession is “effectively certain” in the next 12 months.

So, the answer to the second question is: For many people, No.

What does this mean for the upcoming mid-term election? Possible disaster for the Democrats, who seem to be campaigning on abortion rights, election denial, and saving democracy.

These are certainly important issues. In many states, abortion rights aren’t rights anymore. More than 60% of Republicans still say conspiratorial Democrats stole the 2020 election from Donald Trump. A Washington Post analysis found a majority of Republican nominees on the ballot this November for the House, Senate and key statewide offices — 291 in all — have denied or questioned the outcome of the last presidential election without a shred of evidence. Democrats maintain if these people are elected the future of democracy is in grave peril.

One thing the Democrats are not talking about—much—is the economy, except to say it’s a global problem and, although it’s not the fault of the Biden Administration, the President is doing everything he can to make things better. That, and $4.25, will get you a Grande Chai Latte Tea at your local Starbucks.

What about the Republicans? One thing they do not have to do is offer solutions. And they aren’t.

All the Republicans have to do is quote Ronald Reagan’s famous question uttered in his presidential debate with Jimmy Carter in 1980: “Are you better off now than you were four years ago?” To that question, Mr. and Mrs. Average American can only answer, “No.”

The only thing that seems to be helping Democratic candidates is the quality of the Republican candidates, which, amazingly, Mitch McConnell bemoaned publicly. Regardless of the poor quality, pollsters now say Republicans have a slight lead—and momentum that is widening it.

Republicans in the House, led by Kevin McCarthy, are beginning to count their chickens. Marjorie Taylor Greene, who describes herself as a “Christian Nationalist,” and who in earlier times would be known as a “Nutjob,” predicted recently of McCarthy, “I think that to be the best speaker of the House and to please the base, he’s going to give me a lot of power and a lot of leeway.” Merely to think about that prediction coming true is all you need to know of politics in 2022.

Barack Obama is one person who has learned the lesson of the 2010 debacle. In an interview with former aides on Crooked Media’s Pod Save America, he advised Democrats to get to know Mr. and Mrs. Average American and pay less attention to the latest crazy thing coming out of the Republican dragon known as Donald Trump. He chided Democrats to explain how they’d make people’s lives better.

“We spend enormous amounts of time and energy and resources pointing out the latest, crazy thing he said, or you know, how rude or mean, you know, some of these Republican candidates behaved. That’s probably not something that, in the minds of most voters, overrides their basic interests: Can I pay the rent? What are gas prices? How am I dealing with child care, et cetera. Right?”

Right. Democrats better start listening and relating to the needs of their constituents and stop focusing on the fog of the battle. If not…

Shellacking, anyone?