Setting the record straight on midterm elections


May 25, 2018

by Jake Novak


A series of new polls is hitting the pause button on all the assumptions about a Democratic Party sweep in this fall's midterm elections. After owning leads as large as 13 percentage points just a month ago in the Reuters 5-day tracking poll, that same poll has now put the GOP in the lead on the generic midterm ballot survey twice in the last three days. The latest Rasmussen Reports poll puts the Democrats now just one percentage point ahead.  

Is the so-called "Blue Wave" all washed up? If so, why?

Sorry to reuse this tiresome cliché, but... it's the economy, stupid. Actually, we should say: It's ALWAYS been the economy, stupid.

It's important to say that because the conventional wisdom about midterms elections is so painfully wrong it would be nice to finally kill it for good. That's the clichéd belief that the party in control of the White House almost always loses seats in Congressional midterm elections, especially during a president's first term because of fatigue or some kind of "buyer's remorse" about the president.

It's hard to understand why even very intelligent people continue to believe and keep this myth alive when the historical evidence debunking it is about as clear as possible. What that evidence tells you is that if you really want to figure out which party is going to win a midterm election don't look at the White House, look at the relative health of the economy.

Now one disclaimer that needs repeating before we go to the record books is that in U.S. elections, the most persuasive candidate wins in almost every case barring almost every possible exterior factor. But running on a clearly good economy or against a miserably bad one makes a lot of candidates more persuasive at any given time. And because so many voters are so much less familiar with the personalities running in midterm elections than they are in presidential elections, exterior factors like the overall economy have much more weight.  

Just to get a large enough sample to prove this, let's look at the last 14 midterm elections and see if economy trumps the president's party as the determining factor. I apologize in advance for citing so much data, but it's necessary here to avoid the incredible laziness of those who insist on keeping uninformed myths alive:

In 1962, President John F. Kennedy's Democratic Party didn't suffer from the midterm jinx. It actually gained a significant four additional Senate seats in the midterms thanks to a GDP in 1962 that soared by 6.1% compared to the just 2.6% in Kennedy's first year in office.  

In 1966, the White House jinx seems to hold true. President Lyndon Johnson's Democrats lost 47 net seats in the House and four in the Senate. All of this occurred with strong 6.6% economic growth and unemployment falling below 3%. But with the popularity of the Vietnam War starting to fade and racial tensions rising in the country, perhaps a better way to look at it is that the still booming economy saved Johnson and the Democrats from losing control of both houses of Congress in what would otherwise have been a major electoral disaster.

1970 is the anomaly of all anomalies. Even as the economy began a serious downturn that year, President Richard Nixon's Republican Party picked up a net gain of two seats in the Senate while the GOP lost 12 seats in the House. But 1970 still works to disprove the White House midterm jinx myth.

1974 is more helpful. The conventional wisdom is that President Nixon's resignation just three months before the midterms was the reason for the Democratic wave that saw the party gain 49 seats in the House and four net seats in the Senate. But was it anger at Nixon and President Gerald Ford's subsequent pardon, or was it the dreadful 1974 economy? As pollster Scott Rasmussen noted earlier this week, the 1974 economy was in recession, inflation was spiking, and consumer confidence had plummeted from its record highs just before the 1972 general election.

1978 saw President Jimmy Carter's Democrats lose seats in both houses of Congress just as inflation was spiking from under 5% the year Carter was elected to 9% in '78.

President Reagan was still very personally popular in 1982, but the economy was in recession that year along with the first double-digit unemployment rate since before World War II. The result was the Republicans lost 27 seats in the House and had one net loss in the Senate.

1986 was a mixed year for the economy. Most of the Reagan economic boom was still in place that year, but a definite slowdown in that growth occurred. Fueled by some precursors to the 1990 savings and loan crisis, real estate price drops, and the collapse of the Texas oil economy, '86 was easily the roughest economic year of Reagan's second term. The data bears this out as GDP growth in 1986 fell to 3.5% compared to 4.2% in 1985 and a whopping 7.3% in 1984. Moreover, the impact of the '86 slowdown hit its peak just as the voters were going to the polls in the final quarter of that year. A slew of not-so-persuasive first term GOP incumbents all went down to defeat. The Democrats picked up a net gain of eight seats and took a 55-45 majority of the Senate. By contrast, the House midterms saw the Democrats gain an almost inconsequential five seats as GOP incumbents in the lower chamber proved to be more savvy and persuasive than their Senate colleagues.

1990 saw GDP growth fall below 2% and unemployment jump back over 6%. Those were the reasons President George H.W. Bush's Republicans lost seven seats in the House and one in the Senate.

1994 seems like the year when economic factors played the weakest role in tipping a midterm election. Despite a return to 4% economic growth and a drop in unemployment, President Bill Clinton's Democrats lost 54 seats and control of the House and also lost control of the Senate with a net loss of nine seats. But remember also that the Republicans crafted one of the most brilliant and coordinated midterm election strategies in America history that year. The economically-dominated "Contract with America" presented by eventual House Speaker Newt Gingrich capitalized on residual economic anxiety from the 1992 recession and successfully clouded out much of the strong recovery that was already underway. In other words, the economy still dominated that election but it went the Republicans' way because they successfully controlled the economic narrative.

Clinton's second midterm in 1998 was more in line with overall trends. GDP growth was strong at 4.5% and unemployment falling in '98 and the Republicans made no significant gains in the elections. The conventional wisdom that the Democrats held serve because voters were disgusted by Republicans trying to capitalize on the Monica Lewinsky scandal. But that belief doesn't really hold up to the solid economic reasons for the Democrats' relative strength at the polls.  

Support for President George W. Bush's anti-terrorism efforts are the usual explanation for why the GOP gained a few seats in both houses of Congress in the 2002 midterms. But GDP growth was picking up that year thanks to the first round of Bush's tax cuts, and that was a significant factor as well.

The GOP lost control of Congress in 2006, mostly due to anger of the flagging war in Iraq. But it's important to note that the economy was beginning to slow down too with GDP falling below 3% for the first time in three years.

The last two midterm elections of 2010 and 2014 where Democrats first lost control of the House and then the Senate, respectively, were heavily influenced by the economy. While technically on the upswing, the economic recovery under President Barack Obama was the weakest since World War II. GDP never hit 3% in any year of his presidency and consumer confidence only returned to healthy levels after the 2014 midterms.

So while some external factors like wars, presidential resignations, and terrorism have sometimes played a role in midterm elections, no single factor is historically more important than the economy. The only "jinx" the party that controls the White House faces in midterms is a bad economy or a general perception that the economy isn't strong enough.

What does this mean for 2018? As of now, this is good news for the Republicans. They still may lose seats in the House, but the chances of losing control of the lower chamber are getting slimmer as the economy continues to grow and more voters are giving credit for the strong economy to President Donald Trump. Another study now shows that household income has already risen under President Trump while it stayed the same under President Obama for eight years.That household income data seems to be in line with the growing number of those aforementioned polls showing the Democrats's midterm poll lead has evaporated. It also explains why Democrats fared so badly in the Obama midterm elections.

Of course, the economy isn't guaranteed to stay on this stronger course. Gas prices are creeping ever higher and that could significantly change voter optimism. The stock market could also easily take a turn for the worse in what's already been a volatile year for Wall Street.

If things stay the same, the Democrats could also hope for a 1994-style miracle and still win control of Congress despite a stronger economy. But that would likely require them to produce a very comprehensive and forceful economic platform like the GOP did in '94 with the Contract with America. Has anyone seen any evidence of anything like that? Of course not. The one issue the Democrats continue to run on is resisting President Trump and even working to set him up for impeachment.

President Trump is not running in these midterms, but the economy is. And this economy favors the incumbents in Congress more and more every day.


OLDER COLUMNS


May 22: Ford's unsung heroes get America moving again


May 6:5 Questions for John Kerry


​April 23: Establishment Republicans are delusional about Trump too


April 17: Time for another media reality check


April 10: Facebook fact & fiction


April 4: Will Amazon kills our schools too?


April 3: It's not just #MeToo, Wall Street has a CEO gender gap problem


March 25: A return to Middle East pragmatism


March 21: Travis Kalanick needs to meet this man right now


March 18: A message for the political class from the real world


March 14: Republicans need to learn the real lessons from PA-18


March 10: On tariffs and North Korea, Trump isn't standing on conservative ceremony


March 4: Delta's dopey anti-NRA publicity stunt blows up in its face


​Feb. 23: Trump must respond to blatant Russian aggression against U.S. troops in Syria


Feb. 22: Trump doesn't need to feel our pain on guns, he just needs to act


Feb. 21: Trump can defy the NRA because he's the only game in town


Feb. 16: Mueller's latest indictments prove American voters are too smart for pathetic Russian bots


Feb. 16:Stop blaming the NRA for failed gun control efforts


Feb. 15:Here's the best way to curb gun violence in our schools


Feb. 13: It's time for Putin to dump Syria and Iran


​Feb. 12: A nightmare for Democrats: Trump is getting more credit for the economy


Feb. 9: Jim Carrey's Facebook tantrum helps Trump


Feb. 8:Trump's military parade idea isn't such a bad political move


FULL ARCHIVE OF ALL COLUMNS AND ESSAYS COMING SOON! 


*(For CNBC columns only, laptop and desktop users can see the full catalogue at https://www.cnbc.com/jake-novak/)





JakeNovakNews.com

 














​​