Jewish World Review July 26, 2002 / 17 Menachem-Av, 5762
These even polls suggested that the Republicans could hope for a far better than average showing in an off-year election in which their party held the presidency. Odds seemed to favor the Republicans holding the House, though Democrats need to win a net of only six seats to take control (actually seven, since Texas Democrat Ralph Hall has said he would vote to organize with the Republicans if his vote made the difference). With strong challenges of Democratic incumbents in South Dakota, Minnesota, Iowa, and Missouri, Republicans seemed to have about an even chance of winning a net of one seat in the Senate, which would give them majority status.
Now many Democrats hope-and some Republicans fear-that the sagging stock market and business scandals are changing the political alignment in the Democrats' favor. Evidence for that proposition is as yet scanty. There is the July 12-15 Zogby poll, which shows George W. Bush's job approval rating at 62 percent-still way above 50 percent but the lowest in a national public poll since the September 11 attacks. An Ipsos-Reid July poll distributed by the Cook Political Report shows the Bush job rating down 5 points to 67 percent, with only 49 percent thinking the nation is going in the right direction-down from 53 percent a month earlier. A Pew poll notes that there has been in recent years a much closer correlation between consumer confidence and the performance of the stock market. This makes a certain amount of sense, since the percentage of voters who own stock zoomed upward in the 1990s; Zogby says two thirds of his respondents own stock.
Some evidence in these polls cuts the other way. Zogby shows the two parties still split on the generic vote question 34 to 34 percent-and Republicans have run well ahead of the generic vote in every election since 1994. Ipsos-Reid, which had shown Republicans ahead of Democrats since April, in July showed Democrats ahead by 44 to 43 percent-an insignificant lead but a significant change from earlier polls. In several polls, voters tend to believe that the economy will be doing better next year than this year-a sign of optimism at odd with the recent trends in the stock market.
Republican pollster Bill McInturff argues that opinion whether the nation is going in the right direction or is pretty seriously off on the wrong track-a question pollsters have used since the 1970s to gauge attitudes toward the general direction of the nation-runs about 20 percent lower than the president's job rating and that the right direction number tends to decline as consumer confidence does. He notes that the latest University of Michigan number on consumer confidence fell to 86.5, well under the 100 level that indicates a good degree of confidence. On various national polls, the right direction number has hovered at or fallen just below 50 percent-numbers suggesting that Bush's 70 percent job ratings may be due to fall-as that number did in Zogby's poll.
Undergirding all this analysis is the idea, which I have championed for some years, that the important economic issue for most voters today is not income but wealth. Voters who experienced the great depression were exquisitely aware of how one year's drop in economic growth and income could lead to personal disaster, and responded sharply to each recession. Today's voters, insulated against one-year drops by a buoyant job market, personal savings, and credit cards and by equity in housing and personal investments, can weather a one-year storm and, having no memory of the Great Depression, are not particularly worried that a downturn may be protracted.
They are more concerned about their progress, or lack of it, in their lifelong project of accumulating wealth. For most voters do, by their 50s, accumulate a significant amount-in the hundreds of thousands of dollars-of wealth, mostly in the form of their houses and equity (directly or indirectly through mutual funds) in the stock market. The sharp rise in personal wealth in the second half of the 1990s helps to explain the pro-incumbent proclivities of voters in the 1996, 1998, and 2000 elections.
Now the drop in the stock market has dissipated some of this increase in wealth. Democrats hope, and Republicans fear, that this may turn some significant percentage of voters against the president's party-and given the closeness of party competition, even a small percentage can turn out to be significant. Those who think this is happening, or is about to happen, can cite the Zogby, Ipsos-Reid, and Pew polls in support of that proposition.
Are they right? Possibly, but it is too soon to say. We will have plenty of other polls coming in, pretty soon nationally and dribbling in over the next several weeks in state and congressional races, which will help us understand whether there is such a trend. In the meantime, there are some reasons to think that Democrats' hopes and Republicans' fears may be overstated. First, no one knows if the stock market will continue to fall. It could conceivably zoom upward. Moreover, no one is sure whether voters measure their progress on the stock market by comparing today's values with market peaks. After all, most voters didn't buy at the peak. All of today's stock indexes are ahead of where they were five years ago.
Second, stocks are not the only component of personal wealth for the ordinary voters. The other major component, housing values, have been holding up very well. Indeed, in many markets across the nation they have been zooming upward. This suggests that some voters have been converting stock wealth to housing wealth. They have little reason to be dissatisfied. Plunging housing values were behind the collapse of George H. W. Bush's poll ratings in 1991-92; his biggest percentage losses between the 1988 and 1992 elections came in New Hampshire and Southern California, which also showed some of the nation's greatest drops in housing prices.
Third, the misdeeds of executives are surely not as chargeable to Bush and Republicans as some Democrats would like. Voters may come to see that the executive misdeeds that have hit the headlines mostly occurred when Bill Clinton was president. Bush and the Republicans in their recent actions can argue that they acted to clean things up.
Finally, there are other issues. Issues of national security and the war on terrorism tend to favor Republicans. Education is roughly a draw and Social Security favors Democrats by far less than the historic norm. Bush has attempted to bolster his party's standing in the steel belt and the Farm Belt (where several of the most seriously contested Senate races are) by backing steel tariffs and the farm bill; those actions, widely criticized by free-market conservatives, may pay off politically.
liberals have started exulting that the recent headlines will change basic
public attitudes that have been skeptical of government remedies and
more favorable to letting markets work for the past 25 years. But history
shows that such underlying attitudes change only after a sustained
period of time-usually several years. The Depression of the 1930s, the
stagflation of the 1970s-these were not momentary events or a few
weeks of headlines; they were a series of many events and trends,
sustained over a long period of time. We have not seen anything like
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