Maybe It’s Not the Economy, Stupid?

The conventional wisdom in politics has long been that Americans vote with their pocketbooks. If the economy is bad, voters oust the incumbent. Never mind that unelected institutions like the Federal Reserve arguably have more control over the economy than the president or that the president isn’t personally responsible for job numbers. Sluggish growth, high unemployment or inflation, tanking 401(k) balances—if it’s “on his watch,” a president pays the price at the ballot box. As Democratic strategist James Carville famously said, in boiling down the success of Bill Clinton’s upstart 1992 campaign for president: “It’s the economy, stupid.”

Some politicos even believe a simple statistical formula can predict the outcome of elections: the “misery index,” or the combination of the unemployment rate and the annualized inflation rate. Invented by economist Arthur Okun during the economically miserable 1970s, the index supposedly explains why President Jimmy Carter, facing a misery index of nearly 22 in the summer of 1980, won just six states and D.C. in the general election (though the energy and Iran hostage crises didn’t help). The misery index has predicted the winner in 15 of the last 16 presidential elections, and every one since 1980, according to the economic research and investment firm Strategas, which holds that the misery index must remain below 7.353 for Harris to win (it currently sits at 6.73).

But there’s evidence now that it’s not really the economy, stupid, anymore—even when voters tell pollsters that’s their priority. Or it may nominally be the economy, but an economy defined by Republican leaders and the media, both of which have been inclined to accentuate the negative. “There was just this endless drumbeat about how bad things were under Biden,” macroeconomist Dean Baker told me, noting that inflation was the dominant theme in the media even though wage increases outpaced price hikes.