It's not the economy anymore, idiot

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When American political strategist James Carville, then a senior aide to presidential candidate Bill Clinton, declared that one of the keys to winning the 1992 election was „the economy, stupid,” he was stating one of the most fundamental truths of politics.

Decades of elections have reliably demonstrated that voters don't respond well to economic problems and will punish an incumbent party, while a government that makes voters feel richer stands a good chance of fending off a challenge.

But if Carville had offered the same advice to any of Clinton's successors as the Democratic presidential nominee, both its veracity and effectiveness would have been much less clear.

Much has been written about the disconnect between the increasingly healthy state of the U.S. economy and Americans' bleak sentiments, but a notable development over the past 18 months has been that while public sentiment is finally beginning to rise, it has done nothing. For President Joe Biden's approval ratings. In other words, it's not that Americans don't accept that the economy is improving: even if they do, they won't give him any credit for it.

It's easy to dismiss this as an anomaly fueled by the Covid-19 pandemic and a once-in-a-generation hyperinflationary crisis, but it hasn't been „the economy, stupid” for more than a decade in America. Research by political scientists John Sites, Michael Tessler, and Lynn Wavreck first drew attention to the phenomenon. Their 2019 book Identity crisisIt highlights how Barack Obama's approval rating has steadily trended downwards during his presidency despite rising economic sentiment.

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Pages and his colleague Robert Griffin found that this disconnect continued even during Donald Trump's presidency. A brief return to the old system in 2021, when Biden's approval numbers fell in lockstep with rapidly sour views of the US economy, became a brief echo of the past. The new rule – „It's not the economy anymore, idiot” – then reasserted itself.

What makes this apparent shift so remarkable is that it appears to be an exclusively American phenomenon. The ancient relationship between economic sentiment and government popularity has evaporated in America, but it remains as strong as ever in Western Europe, where the favorability of French and German governments is still closely linked to economic fortunes. The same is true in England, albeit to a lesser extent.

This difference between continents supports the theory that the hyper-partisan nature of American politics is behind the disconnect. The American electorate is now split into Democrats and Republicans, more hostile to each other than ever, making it harder for economic trends to move people between political camps. If anything, voters' politics now shape their economic sentiments, not the other way around.

In a particularly insightful study last year, American political scientist Brian Schaffner demonstrated that in 2022, while there appears to be a relationship between American voters' assessment of their economic circumstances and their approval of the president, this proves to be an illusion. . than the real one The intensity of the people's struggle In determining their level of criticism of Biden, those who most disapproved of him were more likely to say they were struggling when they weren't.

The chart shows that US economic sentiment has become a tool for expressing partisanship, while in countries like Germany it still largely functions as intended.

In this context, the incentives to adopt sound economic policy are completely broken. Gross domestic product growth As Americans consider their vote this November, it looks like Europe will kill strong job creation and inflation without rising unemployment.

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Contrast all this with Germany, where economic sentiment is very similar among supporters of the ruling coalition and opposition parties. Even supporters of the hard-right AfD generally rate the economy in line with supporters of the mainstream parties.

In the U.S., polls now point to a second term for Trump, whose tax cuts and protectionist trade policies could push inflation back up—not to be taken for granted that the U.S. will continue to pull away from sluggish Europe. .

While Europe's economies are struggling, at least voters share a common assessment that makes for a rational political system.

[email protected], @jburnmurdoch

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