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Why Democrats Never Get Credit for Growing the Economy

Why Democrats Never Get Credit for Growing the Economy

Back in 2014, I noticed something unusual about President Obama’s approval ratings in Iowa. They had dipped below 40 points.

 

This tweet led to a fairly heated debate with some of my friends from the Upper Midwest, who said the causes had to be economic. Sure, unemployment was low, but Obama was no friend of ethanol,  and as someone else put it, “it didn’t feel like 4% unemployment.” I came away the discussion thinking I had hit a nerve--that there must be something beyond economic issues driving voters--but moved onto something else. 

After last Tuesday, this discussion looks very different. The Obama legacy is in complete tatters in Iowa now. The reversal is stunning. Obama won the Iowa caucuses by 8 points, the 2008 general election in Iowa by 9.5 points, and the 2012 election in Iowa by 6 points. Hillary Clinton lost Iowa by around 10 points even as she will end up winning the national vote by around 2%.  

At first blush, it looks like Iowa should have been a solid lock for Hillary. Unlike the Rust Belt, Iowa's economy is in very good shape. Iowa’s unemployment rate now hovers around 3.7%, even if its economic growth has been pretty slowWages haven’t gone up appreciably (and lots of businesses can’t find the right employees to fill open positions) but that's true pretty much everywhere. Maybe Iowans were indeed infuriated by slow economic growth, but it was way worse in 2008 and 2012. On the surface, it looks like a better economy has led to people voting Republican (which, sadly, is in keeping with some scholarship on the subject).  

If it wasn't the economy, then what was it? 

Maybe Iowans were just ready to stick it to the establishment? If so, they had a funny way of showing it, reelecting 7-term Republican incumbent (and one of the chief authors of Obamacare) Chuck Grassley by 25 points. And Ted Cruz won the Iowa caucuses, with Donald Trump basically tying Marco Rubio for second.

Maybe Iowans were sick of all their jobs going to China and to undocumented workers? Perhaps, but Iowa is a massive beneficiary of free trade, with agriculture being a real winner in a free trade scheme. And anecdotal reports suggest that immigration isn’t the touchstone issue in Iowa that it is in other states.

It's tempting, then, to want to simply yell, "Bigotry!" and diagnose this as largely white, geographically-isolated voters simply mobilizing against eights years of racial and social progress. But it’s pretty much impossible to untangle the cultural from the economic—they intersperse and form people’s identities and demands of representative government to such a degree that pulling any one thread can unravel whatever model you’re building. Jobs and economic growth may always be the cornerstone of voter demands, but you can’t have that debate without getting into the social question of who the jobs and economic growth go to. Even if you buy the idea that Barack Obama only won over marginal white voters because they wanted to demonstrate some measure of racial tolerance (an argument I don't quite buy), it doesn't make sense why voting for our first female President wouldn't also elicit some similar form of gender tolerance signaling.

But I can make one firm conclusion out of this mess--it doesn’t look like Democrats could have done more in terms of job creation and economic growth to win over these swing Iowa voters. They’ve got it as good as you can get it in America right now on a macroeconomic level. Low unemployment, high quality of life, a relatively diverse economy, and they're beneficiaries of the current economic and political system.

And that’s the lesson for Democrats—job creation and economic growth are the good deeds that will always go unrewarded.

We’ve seen this before. In 2000, after one of the biggest and longest economic expansions in American history, the nation as whole voted for Democrat Al Gore to be President, but thanks to the Electoral College, Republican George W. Bush became President. As the Onion so perfectly put it:

It didn’t really make a lot of sense from a self-interest perspective—voters were basically promised a 3rd Bill Clinton term, but they decided they wanted something new and different. Again, I don’t know what was going on in people’s heads, but I suspect that for many voters, they just wanted a different direction. That different direction turned out to be a calamitous war in Iraq, a subprime mortgage crisis, and mass unemployment, but hey, that’s democracy for you.

For the Obama era, the voters on the margin continuously sought ways to vote out Democrats, regardless of what was happening with jobs and wages. States like North Dakota and Pennsylvania saw major economic gains from the shale gas boom, but Democrats never got credit for that (and I’m not even arguing they should have). Voters of the Rust Belt had a very funny way of thanking President Obama for rescuing the automotive industry, voting overwhelmingly for Republican representation in Congress and in state capitals. Hillary Clinton barely won Minnesota even as the state has become one of the biggest winners in the huge run-up of healthcare spending, research, and medical devices. Why retirees in Florida went for Trump when the Dow Jones was above 18,000 is beyond me. And if economic growth was so terrible these past two years, well, you can’t really blame Democrats, because Republicans held both the House and Senate.

None of it adds up. And Democrats need to internalize that lesson immediately.

Look, I get it—the economic recovery was painfully slow and many of us haven’t caught back up, but it’s not like that pain was foisted on the median Trump voter. After all, working-class Americans (those making under $50,000 a year) overwhelmingly went for Hillary Clinton. Donald Trump was the preferred candidate of those who were relatively better off in the economy. There is no clean cause-and-effect here when it comes to jobs, the economy, and why people voted for Trump.

My personal theory is that there’s a deep unhappiness that comes with being out of power, and for a lot of rural/suburban, less-educated whites, there was a sense that Hillary wasn’t for them. Sure, on the margin, they may have had economic or cultural grievances, but being out of power sucks, even when your own individual circumstances are pretty good. That’s why you can see such dramatic swings in the electorate even with the same basic country.

But anyone trying to draw a firm and solid line between economic growth, jobs, and wages and then pointing to a Donald Trump presidency is going to have a very difficult argument to make. Voters want more money and jobs above all, but they also obviously care about social issues, about the character of the candidates, and perhaps most importantly, whether the current powers-that-be represent their interests and values.  

The lesson here is that Democrats need to start legislating as if they’re going to lose the next election anyways. I’m a gradualist when it comes to progress, but it was sickening to see so many Congressional Democrats water down their own initiatives on healthcare, reforming Wall Street, and creating jobs, just in the vain hopes they would get re-elected by proving themselves “moderate” enough. They’re all gone now, and it wasn’t because they were too liberal or too moderate or not liberal or moderate enough. It was because a certain segment of voters (mostly white) felt like the reins of power weren’t working for them and showed up to vote. Everyone else stayed home when and where it counted most.  

For better or worse, Democrats will always be the do-gooders in this relationship. We fix things, patch up budgets, disentangle from foreign wars, move forward on civil rights, and generally put policy ahead of politics. We screw up a lot, but our mistakes are usually because we’re trying to help people in an insanely complicated and gridlocked system. A tax cut is easier to pass than a bill addressing climate change.

Republicans not only have the advantage of getting to cut and tear down rather than build, but they are the party of incumbent business and establishment power. Even outsider Donald Trump is going to pass a 90% classic Republican legislative agenda and nominate conservatives to the courts. 90% of Republicans voted for him for a reason. He will push their agenda and reassert their power. 

It sucks, and it puts us Democrats at an inherent disadvantage. But that's the game. Democrats exist largely to bring the Union closer to its ideals of economic opportunity and bounty for all. Just don’t expect the electorate to reward those values even when they come to fruition.  

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