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Good news for Democrats: The economy matters less

Rick Newman
·Senior Columnist

Democrats will have a tough job beating President Trump on the economy in 2020. But maybe they don’t have to.

Since Bill Clinton’s upstart 1992 campaign, political strategists have reminded themselves over and over, “it’s the economy stupid.” But pollsters have detected subtle changes in recent years suggesting voters are less likely to give the president credit for a strong economy, and perhaps less likely to punish him or her for a weak one.

“I wouldn’t say the economy has no effect, it’s probably just smaller than it used to be,” Robert Griffin, research director for the Democracy Fund Voter Study Group, tells Yahoo Finance. “We’ve got an incredibly strong economy right now and look at Trump’s approval rating.”

The unemployment rate, at 3.5%, is at a 50-year low, and the stock market keeps hitting new record highs. Yet Trump’s approval rating has been mired in the low 40s and has never broken 50%, according to the fivethirtyeight composite of polls. A strong economy normally pushes a president’s approval rating into the 60s, at least. Bill Clinton’s approval rating was around 60% in the late 1990s, another prosperous era, and Ronald Reagan’s hit 68% in 1986.

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It’s possible the economy matters less to voters when times are good and there’s less to worry about. But there has also been an increase in partisan voting, which means more voters are likely to vote Democrat or Republican for party-identification reasons than they are to vote for whoever they think will be best for the economy.

This helps explain a puzzling diversion in polls on the direction of the economy, as the data below suggests. During the Trump presidency, Democrats have said they think the economy is getting worse, not better, even though data on jobs, wages, GDP and other economic measures show they’re wrong. The economy has, in reality, been getting better. And the biggest improvements have been in coastal areas and big cities where Democrats roost. Dems are either blind to the improvement, or don’t want to acknowledge it.

Graphic by David Foster, Yahoo Finance
Graphic by David Foster, Yahoo Finance

“Democrats absolutely feel worse,” says Griffin. “They’re most likely to say their personal finances are not doing well, even though they’ve probably improved. They’re less optimistic about the future.”

The outlook on the economy among Republicans, by contrast, has surged during the Trump presidency—which may overstate the health of the economy. Most economic trends under Trump are consistent with the trends during President Obama’s second term, and job growth has actually been slower since Trump took office. GDP growth of around 2% is decent, but when Obama presided over similar growth, Trump and other Republicans called it terrible. The same performance apparently seems much better now that their man is in the White House.

Importance of independents

Independents may be most realistic, as they tend to think the economy has gotten modestly better under Trump. That’s about right.

While subtle, these shifts could be crucially important in an election likely to be as close as the 2016 contest, which turned on fewer than 100,000 votes. Election analyses by forecasting firms such as Moody’s Analytics and Oxford Economics suggest Trump will win if the economy on Election Day is roughly the same as it is now. But that’s based on historical trends tying a healthy economy to an incumbent president’s reelection odds. Those trends may be breaking down.

President Donald Trump briefly talks with reporters before boarding Marine One on the South Lawn of the White House in Washington, Monday, Jan. 13, 2020. He, and first lady Melania Trump who is greeting people in the background, are heading to New Orleans to attend the College Football Playoff National Championship between Louisiana State University and Clemson. (AP Photo/Susan Walsh)
President Donald Trump briefly talks with reporters before boarding Marine One on the South Lawn of the White House in Washington, Monday, Jan. 13, 2020. (AP Photo/Susan Walsh)

Democratic and Republican voters are not likely to determine the outcome of the 2020 election, anyway. Swing voters in a handful of states will be the ones tipping the election either to Trump or to his Democratic challenger. Those include voters who went for the Democrat Obama in 2012 and the Republican Trump in 2016, the so-called Obama-Trump voters. A similar bloc voted for Republican Mitt Romney in 2012 and Democrat Hillary Clinton in 2016: the Romney-Clinton voters. These true Independents may account for just 5% of the electorate, or so, yet Trump won in 2016 with a margin of less than 2% in the swing states that put him over the top.

So if not the economy, what will win this year’s election? Democrats care about health care, climate change, gun violence, education and driving Trump from office. Republicans care about terrorism, gun rights, immigration and abortion. Independents align with Democrats on health care and split on most other issues. The economy, meanwhile, is the eighth most important issue for Democrats, third for Republicans and fifth for Independents, according to Gallup. That means it is no longer the top issue for anybody.

Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. Confidential tip line: Encrypted communication available. Click here to get Rick’s stories by email.

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