Big news from our friends at FRED:
FRED has added 3 data series for the Fujita, Moscarini, and Postel-Vinay (FMP) Employer-to-Employer (E2E) Transition Probability. The E2E Transition Probability is a monthly measure of the rate at which U.S. workers transition from one employer to another in a given month.
This sounds a little dry, doesn't it? But it turns out that the recent history of the FMP series is actually kind of interesting:
FMP measures how likely it is to change jobs. Generally speaking, this goes down during recessions as people burrow in and just hope not to be laid off, and then goes up when times are good and people are feeling optimistic. Recently, it went up early in Biden's term, started to decline as inflation bit, but then has been going steadily up since March.
This is not the biggest deal in the world, but it suggests, once again, that if you measure what people actually do, as opposed to what they tell pollsters, they were feeling increasingly good about the economy for almost the entire election season. The economic explanation for Donald Trump's win just doesn't seem to hold water.
The economic explanation for Donald Trump's win just doesn't seem to hold water.
Sigh. For the Nth time (where N is large), for "economic anxiety" read "status anxiety." Not absolute wealth but relative wealth. And "relative" to whom? Why, to those dusky Others, of course! Especially because when they get close, they get uppity! And that violates Basic American Values! (Plus of course everyone we're told constantly we need to emulate, especially as regards their cars and houses and whatnot.)
Mix in a little sex panic, a little misogyny, and you got yourself a BARELY winning campaign. So no, it ain't "economic." That was always just a convenient excuse.
Pandering to racism and religion never goes out of style. Trump's popularity has squat to do with anything else, the other stuff is just what people tell NYT reporters for their weekly "Trump voters still like Trump" story.
...if you measure what people actually do, as opposed to what they tell pollsters, they were feeling increasingly good about the economy for almost the entire election season. The economic explanation for Donald Trump's win just doesn't seem to hold water.
What do we mean by "people"? Seems a very vague term. Is it 40% of people, 60%, 80%?
Trump only needed a shift of about five percent of the electorate to win. I think it's extremely plausible that a modest sliver of the electorate was feeling economically stressed (many of those also stopped getting child benefit payments, ran out of stimulus savings, and had their healthcare taken away, too).
Driven mainly by the extremely even division of partisanship, candidates now enter the general election with 45+% of the vote already in their pocket. They only need to convince a very modest number of voters to shift. Not unrelatedly, we've had three elections in a row (I suspect 2028 will make it four) where the White House party loses—something that hasn't happened since the 19th century.
I can't ever recall such a disconnect between what people say about their economic condition and how they act. There have been many, many articles on this, which I'm not going to recap, but it comes through quite clearly. People talk as though the economy is terrible, but behave as if it's great. I don't know how to explain this.
Certainly part of it partisanship. Republicans are going to say the economy is terrible whenever there's a Democratic President, regardless of the actual conditions. But I don't think that's a sufficient explanation. The 10% in the middle voted like they believed things were terrible, while spending and acting like things were great. I'm at a loss.
People talk as though the economy is terrible...
Again, what is meant by "people"? Pretty clearly the bulk of Harris voters thought (rightly, obviously) we have a strong economy. Pretty clearly the bulk of Trump voters claimed (inaccurately, obviously) the economy was weak (though strangely, they now seem to be coming around!).
Our elections are decided by a very small portion of the electorate, because the vast majority of voters simply won't even consider voting for the "other" party. As I understand it, most such voters can be described as "low information" voters—they're not avid consumers of political news, and they don't closely follow policy debates. I believe they tend to cluster in lower income groups, and, it doesn't seem that much of a stretch that, to the extent some Americans have been experiencing economic stress, they're to be found in, well, lower income groups.
If today's electorate exhibited attributes more in line with the electorates of the 60s or 70s or 80s, Harris probably wins fairly easily. The economy is strong, to be sure, and America is at peace.
But 2024's electorate is very different.
I know, you're right! That's why Trump spent far in excess of (IIRC) $200m on fearmongering about trans folks! Because economic anxiety! That's why, pretty much instantly when Trump was declared the winner, the expressed views of the economy among Republican voters switched from "Great Depression" to "it's all great!"
Yup, it's all economic anxiety!
the expressed views of the economy among Republican voters switched from "Great Depression" to "it's all great!"
Have you followed any US presidential elections since the year 2000? Republicans (and indeed Democrats) possess a a solid floor of something like 45% of the two party vote. If you've got a "D" or an "R" next to your name on the presidential ballot, you're within spitting distance of an Electoral College majority. Something like 90% of the country's voters apparently won't even consider voting for the other side.
So, yes, Republican voters now believe the economy is terrific (or soon will be), whereas this time last month they thought (really, they claimed to believe) the economy was in rough shape. Nobody is arguing otherwise. They're stone partisans beyond the reach of logic or Democratic messaging.
But again, it's the (very) modest number of persuadables who decide our elections. If you really think they are motivated primarily by worries about trans people or sundry other MAGA cultural grievances, then all hope really is lost. But I don't think the evidence suggests this. Various governing parties throughout the rich world have. been getting pummeled over the last year by voters, and not all of them are parties of the left. The common thread appears to be inflation. As one wag recently put it, unemployment damages governments, inflation destroys them. Voters really hate inflation (so much in fact, that it likely takes more than a single year or two of subdued price increases to reduce its salience as an issue).
Most post-election polls suggest that economic anxiety was a big factor for those people in the middle that you're referring to. They shifted significantly toward Republicans. But has their actual economic condition changed over the last several decades? I don't think so, and their behavior suggests that they're doing fine. Wages are up, particularly at the lower end of the economic scale. Unemployment is low. Jobs are plentiful. By any objective measure, they're in the best shape they've been in for a while.
So why all this angst all of a sudden?
But has their actual economic condition changed over the last several decades?
I'm not really sure. But "decades" isn't the relevant time interval. The relevant time interval would be something like "since the pandemic."
So why all this angst all of a sudden?
It's not "all of a sudden" by my definition. Biden's numbers have been fairly weak since the summer of 2021, and voter concerns about inflation have been observable through most of his presidency.
Your narrative just doesnt make much sense.
Partly because there is absolutely no data to support it, its just your vibes of the vibes of others.
And whatver data is there cant be fit into the story, so its conveniently narrated away.
But mostly because your focus is on this fixed, tiny group of 'persuadables' and your blanket assumption that these people must be financially struggling based on....only your assumption.
The question is not whether anyone in the country is struggling and voted for Trump largely for economic reasons, sometimes this seems to be the question you are wrongly addressing.
The question is, did the economy actually harm the Dems this cycle? Did those voting for Trump for negative economic reasons significantly outweigh those voting for Kamala for positive economic reasons? And if so, how can we square that with the fact that the economy is doing well and a large majority of people are doing well?
Your assumption leads to the conclusion that this small group of persuadables will always, always, always throw the election to the challenger because there will always be a tiny group struggling at any given time and they will always vote for the challenger even though this narrative does a really poor job of explaining past elections and what we know about the current election so far.
That some people are stuggling doesnt even start to answer the question of whether or not the economy played a role in Trumps win.
Your assumption leads to the conclusion that this small group of persuadables will always, always, always throw the election to the challenger because there will always be a tiny group struggling at any given time...
Always is a long time. (And three always's no less!).
But yes, there are always going to be voters who are struggling, and I do think that, until the current dynamic shifts, we're in the type of political environment where, at least in presidential years (midterms are a different story), the White House incumbency advantage that traditionally prevailed has been very seriously weakened—to the point where national conditions really need to be extremely positive for the incumbent to prevail. Again, three elections in a row now the incumbency party has failed to hold the White House: that's the first time since the 19th century!
Let's put it this way: if 45% of the electorate won't support the "other" party under any circumstances, that functionally means nearly half the electorate won't vote for an incumbent president (or the incumbency party), no matter how good national conditions might feel (in other words a much weaker incumbency advantage). That's a very different political environment from the America of my childhood. Ronald Reagan won 49 states.
"What people think" is defined by various randomized polls, such as the University of Michigan consumer sentiment and other measures. These measures are not arbitrary or anecdotal, based on selection of specific people, they are statistical. The actual state of the economy is defined by objective statistical measures such as unemployment and GDP growth.
In the past consumer sentiment and other statistical measures of what people say they think about the economy have generally agreed with the actual statistical state of the economy, but lately the consumer sentiment has been much worse than the real economy - supposedly people up until the election have thought that the economy is as bad as it was around 1980, when there was very high unemployment and inflation.
Of course there has also been growing partisan divide on this - basically when there is a Republican President, Republican voters think the economy is great, and they think it is terrible when a Democrat is President. Democratic voters are also partisan, but less so. So the overall attitude of "people" (overall, statistically) is certainly going to get much more favorable when Trump has been in office a while.
This is a mystery. Paul Krugman has been making this point for much of the past year and he also always got push back from someone saying Krugman isn't living in the real world and then complaining about the price of _______ fill in the blanks. I think one explanation is that our media has failed miserably about reporting this accurately or fairly. The NY Times has been especially
bad. See Dean Baker's many cases in point. .
But I think more is going on here and I wish I understood it.
I think this is correct. Unless the GOP succeeds in imposing indefinite minority rule (which is obviously their goal, and they could succeed), I think we’re looking at a period of instability, with back and forth elections. The country is closely divided between people who want to face the problems of the 21st century, vs people who feel discombobulated and want to retreat to what feels more familiar. Harris’ “We aren’t going back” slogan spoke directly to the first group, just as Trump’s “MAGA” speaks to the second group. I think the economic complaints were a shorthand people adopted for “everything I don’t like about the status quo,” eg the persistence of Covid, climate change related extreme weather, high rates of immigration, increasing diversification, changing role of women, etc.
My fear is that they try retreating to the 1950's and overshoot into the 1930's.
Joe Sixpac was being henpecked at home by a WOKE Jill Sixpac and he was not going to be henpecked by a woman in the White House especially a mixed race woman.
Call me old school but this why I thought Dems would win. The economy today ranks as one of best economy in my lifetime. If we were to chart unemployment, inflation and GDP growth as one index (maybe have an average of 4.5, 2.5, and 2.5, respectively, and scale it to one hundred, today’s economy may be 100.) Similar to the Clinton economy in 1999, Obama 2014 and Trump in 2019.
Similar to the Clinton economy in 1999, Obama 2014 and Trump in 2019.
Inflation hadn't been problematic for many years prior to any of those elections. But inflation was problematic not much more than a year before Kamala Harris faced the voters. Recency is a bitch, especially when large swaths of the electorate (and overwhelming majorities of persuadables, I fear) are functional economic illiterates. Also, I doubt the inflation figures fully pick up the difficulty of the housing market in 2024. I haven't seen the numbers compared, but I strongly suspect existing home sales in 2024 have looked pretty anemic compared to, say, 1984, 1996, 2004 and 2012 (election years that saw parties successfully defend White House incumbency).
https://apnews.com/article/housing-home-sales-real-estate-home-prices-9b36e34fe194713d10fd585fa3fd48f9
My suspicion, based on the last quarter-century of electoral outcomes, is that a good economy gives permission for a certain slice of the electorate to exercise a certain perverse mischief, hence the defeats of Al Gore, Hillary Clinton, Kamala Harris. It's only when the economy turns sour for that same slice that they will vote for a Democrat. IOW, whatever these people say about Republicans being better for the economy, they refuse to vote for one when push comes to shove. There are no Republicans in foxholes.
Your suspicions are backed up by U of Chicago economists. Looking back to at least 2000, voters have voted for Republicans when the economy was good and Democrats when it wasn't. You can interpret that how you wish, but it's definitely the case over that time.
Thank you for saying something that's been on my mind for a long time but I could never say in a succinct or concise way. It's a bizarre pattern, to be sure.
Neither democrats nor trumpist MAGAts can fix the economic problems of the poor, low skill, and dysfunctional members of society. This is as good as it gets. Whatever happens in the next few years, it won’t change anything for the better. It can’t get any better!
We will be stuck in this situation for a long time.
Clicking through reveals the original graph is extremely noisy: enough so that this 0.4% increase could potentially be part of the noise. It certainly isn't nearly so obvious as Kevin's "cleaned up" graph seems to be.
More to the point, I am, shall we say, highly dubious that the sorts of low-information voters who were googling to find out why Biden wasn't on the ballot will somehow be able to detect that the economy is strong by knowing that there's a 0.4% increase in job transfers nationally over the past six months.
It's far more likely that such people determine their attitude toward the economy by three factors: their own lives, their friends and family, and what they hear randomly from whatever sources they do follow.
For example, do they have an app on their phone that sends out notifications? Their impressions of the economy might be partially shaped by seeing those but never clicking through to read the actual stories.
I am unconvinced that all the "always connected" people (including Kevin and his readers) are in a good position to evaluate how the "apolitical" arrive at their impressions of the economy.
That's assuming the swing in the election was mainly down to this group, and not to variations in who voted (fewer Democrats and more Republicans, for example). I honestly think a lot of the information released on and since election day has been poorly organized and handled; my favorite example was exit polling showing that of independent voters who ranked "The Economy" as their largest priority, 68% voted for Trump. But without knowing either how many independent voters ranked "The Economy" number one or what percentage of the total voting population were classified as independent voters, that information is not useful.
And don't get me started on the decision of major American news providers (the Post included) not bothering to list the popular vote results at all. Yes, that doesn't determine the winner, but it does (or should) matter, just as the percentage of registered voters and eligible voters who voted should matter. By refusing to even provide the information, the media makes a clear statement about what does matter and what we shouldn't even be considering.
I agree it’s a hard issue to understand:
“This is not the biggest deal in the world, but it suggests, once again, that if you measure what people actually do, as opposed to what they tell pollsters, they were feeling increasingly good about the economy for almost the entire election season.”
But I BOUGHT just as many eggs as usual, but I did not FEEL good about the fact that they’re now twice as expensive (in my area) as they were a mere four years ago (or thereabouts).
The inflation headwinds simply must have been against Biden/Harris. And people may have done an admirable job of getting on with their lives even if they didn’t appreciate the extra hurdles in their way.
Right, my egg buying didn't change either. Which to an Economist means I must be fully satisfied with the value proposition of eggs — that's my "revealed preference".
But people aren't like that. They grit their teeth and hold their grievances tight until there's an opportunity to let loose on someone or something.
After reading all these comments, I think it still boils down to this:
Democrats are good at governing. They understand all the complexity and nuances. When campaigning, they try to explain all the complexity and nuances, and fail miserably.
Republicans are bad at governing. They govern based on overly simplistic understanding of how government works. When campaigning they articulate these overly simplistic messages. Voters prefer simple messages to complex ones.
The result is that when Republicans have made a hash of things, voters elect Democrats to fix it. When things are good simple messages work and voters prefer Republicans.
Yup.