In less than a week’s time, national Republicans are likely to feel they can’t get no respect for an improving economy. The jobless rate has continued its downward trend from the Obama years to an amazing 3.7 percent in September, the lowest it’s been since the 1960s.
Wages in almost every non-farm sector (except manufacturing) have ticked up since January 2017—and that goes for the working classes, not just their bosses. Hourly earnings for production and non-supervisory employees have increased by a buck since then, to $22.81, slightly outpacing inflation. Consumer confidence is higher than at any time since George W. Bush’s first term, per multiple measures; up to January, Wall Street was higher than ever. Overarching all of this is energetic GDP growth, which surged to 4.2 percent in the second quarter and is up by more than a percentage point year-over-year in each of the last two quarters.
Given the occasion, this momentum could’ve been cause for Republicans to toast next Tuesday evening. They may have to settle for pie instead. Democrats are favorites to serve them a humbling: the kind of defeat that’s customarily due to Washington’s ruling party in non-presidential election years. They are favored to win the House of Representatives, which the GOP controls 235-193—and a lenient Senate map is all that’s keeping Democrats from flipping that chamber, too. Only 9 of the Republicans’ 51 seats are up for election.
Top Republican lawmakers have been desperate to make economic news a more prominent story than White House drama and the president’s impulsiveness. “The unemployment rate is under 4 percent. Jobless claims are the lowest in 50 years. Wages are up 3 percent. GDP is growing. Selling what we’ve done to voters over the next eight weeks is my top priority,” House Speaker Paul Ryan told his conference during a closed-door meeting in mid-September, Politico reported. In a sign of the times, President Trump rebuked Ryan on Wednesday for saying he could not legally revoke birthright citizenship with an executive order.
The lack of message discipline invites the question “what if”? Not that it should. While the economy bears on presidential elections, there is no evidence it has played much of a role historically in determining midterm results. In 2014, UCLA political scientist Lynn Vavreck found virtually zero correlation between GDP growth and Senate results in non-presidential election years. The same goes for the House, as former Georgetown University government professor Pat Lynch wrote in a 2002 Legislative Studies Quarterly article.
The pertinent takeaway from their findings is not that congressional outcomes wax and wane based on the election cycle—the so-called “surge and decline” theory—or that midterms are generally referendums on the president. It’s that whichever phenomena explain why the sitting president’s party fairs so poorly in midterm elections, they don’t include the state of the economy.
If this were 2020 and not 2018, of course, the story could be different. “It’s the economy, stupid,” is presidential election-year wisdom. And research indicates that the election-year economy influences presidential races more than the four-year economy, as Loyola Marymount economist Andrew Healy and Berkeley political scientist Gabriel Lenz explained. Not only do “on-cycle” and “off-cycle” elections have distinct stakes—they have distinct variables.
Which is why the president could be unrewarded for a good economy next week but responsible for a worse one in two years. Regardless of the credit Trump is owed—economies are bigger than presidents, and clearly just as unpredictable—Republicans have a fleet of powerful economic data at their backs. But they also have a legislative record the public isn’t quite gaga for: Their ill-defined health care policies are so unpopular that they, not Trump’s behavior, inform the Democrats’ closing election message, and the popularity of their tax reform law is based mostly on partisan point of view. Then there’s Trump himself, whose loyalty among hardcore Republicans does not appear to be as electorally significant as antipathy among Democrats. Right now, these tribal concerns matter.
In 2020, economic circumstances may matter more. And it’s fair to ask if now, not then, is as good as they’ll get. The Federal Open Market Committee estimates that annual GDP growth will decrease by a third between 2018 and 2020. Fed chairman Jay Powell seems undeterred by Trump’s disapproval of the Reserve Bank’s plans to keep raising interest rates. The International Monetary Fund has observed an economic slowdown in the euro area, Japan, and the U.K. this year—only the world’s largest economies not named “China.” Who knows how all these countries will fare if the president continues to taunt on trade.
It may not be too good, in which case Trump will be whistling “Yesterday” all the way to the polls two Novembers from Tuesday.
