The AmericanVoter and the Economy , 2008

Why did Obama defeat McCain in 2008? As with any national election outcome, the immediate culprit that comes tomind is economic performance.When theU.S. is prosperous, the electorate votes the incumbent presidential party back into office.When the U.S. economy sours, the incumbent (or incumbent party) loses. In 2008, the application of this rule led to a correct prediction once again. Economy up, Republicans out. It is difficult to challenge this conventional wisdom that the economy contributed to the transfer of theWhite House from the Republicans to Democrat Obama. Perhaps the simplest evidence that the economymatters is the relationship between public beliefs about the economy and the vote for president. Figure 1 presents one demonstration. The dependent variable is the vote for the president’s party over the eight elections from 1980–2008. The independent variable, from the University of Michigan’s Survey of Consumers, is the net response to the survey questionwhether business conditions have improved or gotten worse over the previous year. The timing of the survey data is for the third quarter of the election year.The correlation (r=+.88) is impressive. From 1980 through 2004 the observations are virtually on a straight line. Only 2000 stands out as an outlier, serving to highlight once again that Gore “should” have won andwon handily (not just in a popular-vote squeaker). In the third quarter of 2008, evenwithmost readings before the September crash, the public’s estimate of business conditions was the worst ever recorded for an election campaign. With the 1980–2004 observations in Figure 1 as a guide, one could have forecast for 2008 aDemocraticwin of almost 60–40, or true landslide proportions. By this benchmark, losing “only” about 53.7 to 46.3 (as the percent of the two-party vote),McCain got more votes than he “deserved.” Thus the economy mattered, with the only question being why it did not drag down the Republican presidential ticket even more.