The real economy, perceptions and votes

The US electorate is going through a period of economic pessimism in November that bodes ill for Democrats, but things could be changing.

This summer, the most popular topic of conversation in the White House is the average price per gallon of gas at the pump. For the past ten weeks, that price has been falling steadily and Team Biden’s optimism is rising.

What can we conclude from the midterm congressional election approach? Based on the real development of the American economy, this optimism would be justified, but will reality catch up in time to avoid the election disaster predicted by the Democrats? It may not be unreasonable to believe.

Despite the gloom and uncertainty brought on by inflation and rising interest rates, the US economy is doing reasonably well, particularly in terms of employment.

reality c. perceptions

After peaking at 14.7% in April 2020, the unemployment rate has returned to its historical low of February 2020, ie 3.5%. The US economy has been adding jobs at a rapid pace since early 2021, and that pace shows no signs of slowing. According to data from the Department of Commerce, real average wages of workers adjusted for inflation actually increased between February 2020 and June 2022.

During this period, however, polls show a marked deterioration in perceptions of the state of the economy and a rise in feelings of economic uncertainty, combined with inflation unprecedented in decades, but also with media coverage that places an emphasis on bad news, particularly in the echo chamber of the right Media.

Political polarization and the apparent paralysis of institutions are of no help here. Republican voters refuse to believe the economy can do well under Democrat leadership. For their part, Democratic voters who wanted major reforms had to sit idle for several months in a congress where Republican filibusters exposed divisions in their own party.

And yet it turns

Still, perception is catching up with reality for the most part, and reality is beginning to tip in Democrats’ favor. This is reflected in the clearly visible drop in prices at the pump and at the political level in the fact that the good news is beginning to outweigh the bad.

That’s not to say that die-hard Republican voters will suddenly abandon the Trump cult, but the improvement in some key economic indicators seen in recent weeks is the kind of trend that, if sustained, can create enough movement to tip the scales in favor of the ruling party in several close races.

Democrats will also benefit from voter backlash against the Supreme Court’s rightward swing and the Republican Party’s increasingly overt Trumpism. In a by-election on Tuesday in a barometer district in upstate New York, the Democrat caused a surprise by beating the Republican favorite.

Republicans are still the favorites to retake the House of Representatives, but if perceptions align with economic and political reality by November, things could take a different turn.

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