Are voters' reponses to the polls on "the economy" really just a proxy for ideology?

The electorate's views on the economy are deeply divided by ideology, and reverse when a different POTUS takes office.

October 19, 2024 — For almost the entire election season, it has become the widespread view, cited often by reporters and pundits, that the electorate has a negative view on the state of the economy.

This seems perplexing to many economists, because on almost all objective metrics the economy is almost as strong as it ever has been with rising real GDP, robust employment growth, a sustained and low unemployment rates, and rising real wages. A problem area in 2022 was relatively high inflation rates (relative to recent years), but even that inflation rate has dropped to near 2% annually.

But there may be an explanation for why the voters have a sustanined negative view on the economy. There are distinct partisan differences on the question.

Let’s start with the overall picture for all voters. See below. On the question “how would you rate the condition of the economy right now?” As of 10/15/24 a recent (and typical) poll shows that 58% say the economy is “bad” while 39% said it was good. (This is based on a poll by the firm CIVIQS, which has tracked this question for a long time since 2016. Go here to read about their methods. Though these are the results from just one pollster, they mimic findings from others)

Note that in the 2017-20 period the view of the economy was significantly positive, but after the COVID-19 pandemic hit, the views of voters reversed, which makes sense, because the unemployment rate surged to higher than 15%, the highest since the Great Depression. Since 2020, the view of the economy has been a net negative, though by election day 2020 the margin was narrow. But since the end of 2020, those saying the economy is “bad” outnumber those saying the economy is “good.” In recent months there has been a steady increase in voters saying the economy is “good” and a decrease in those saying the economy is “bad”, though on balance (as noted) a majority think the economy is “bad”.

Views of Republicans. But note the partisan divide on this question. Looking first at Republicans. Note that this picture mirrors the one above, but the shifts are more dramatic. By a large margin, in 2017, until election day, Republicans thought the economy in bad shape (over 80%). Then through the entire 2017-2020 period Republicans had a very strong positive view of the economy with over 90% rating the economy as good. Note that the opinions on the economy reversed almost immediately after President Trump was elected in November 2016. Note that Republicans did get pessimistic about the economy after January 202 during the COVID-19 pandemic, but by election day in 2020 they had a net positive view of the economy. Then as soon as the election was over their views of the economy shifted to extremely negative and remained that way throughout the entire term of the President Biden with over 90% rating the economy as “bad”. In October 2024, 93% of Republicans rate the economy as “bad” and only 6% as “good”.

Views of Democrats. To some extent these patterns are seen in the reverse among self-declared Democrats. These voters had a positive view of the economy while President Obama was in office, but their views turned more negative during the 2017-2020 period when President Trump was in office (though still a plurality thought the economy was “good”). But after the pandemic hit in January 2020 the Democrats had a strong negative view of the economy which persisted until election day 2020. Notably Democrats’ views of the economy turned positive around the time of the Inaguration in 2021, became a net negative in 2022 for a short period of time, but have been a net positive since then, to the point where currently 75% declare the economy as “good”, and only 20% declare the economy as “bad”.

Views of Independents. Notably, the views of Independents on the economy are more likely to mirror the view of the first figure above (all voters combined), though somewhat moderated. While the view on the economy was positive before January 2017, their views turned net positive in the 2017-20 period, but net negative in the period after January 2020. In October 2024, 66% of independents rate the economy as “bad” while 31% rate the economy as “good”.

What explains these patterns? It seems a bit perplexing that voters’ views on the state of economy can shift so quickly after events like elections More research may be needed to think about why this is happening. Perhaps it is because Democrats and Republicans tend to get their news from different sources, do not have a complex view about the economy (which admittedly is confusing to understand), or there is something else going on. But this summary seems to cast the interpretatations of what voters mean when they express views on “the economy” in a somewhat different light. Are voters viewing the economy through a partisan lens?