Nate Silver’s not stupid, but it’s still the economy
Voters’ feelings about the economy trump all other issues in presidential elections
Welcome to the introductory post to my newsletter. My hot takes:
James Carville’s “The economy, stupid” sign is still the best guide to who’s going to win the presidential election.
The University of Michigan’s Index of Consumer Sentiment (ICS) is the best “economy, stupid” measure of whether a sitting administration will be re-elected.
In 72 years of ICS surveys, no president has been re-elected with Americans so gloomy and the index as low as it is now.
Trump should be leading Biden 53%-47% if he were taking full advantage of voters’ negative economic vibes.
RFK Jr. and other minor parties are boosting Trump by 0.4 points.
The race is close only because Trump’s bad behavior costs him about 3 points.
Silver vs. Carville
Nate Silver teased James Carville by tagging a recent newsletter about the 2024 presidential campaign with the sub-title: “It's not just the economy anymore, stupid.”
Carville nailed his famous “The economy, stupid” sign to the wall of Bill Clinton’s 1992 campaign headquarters. Over the years, “economy, stupid” has become a truism meaning that the economy is the overriding issue that determines the winner in a presidential campaign.
Silver argues: “the economy still qualifies as an important concern, it competes with many other things … for public and media attention.”
I hesitate to quibble with Nate Silver, the Bill James of political analysts. Just as James did for baseball, Silver taught us how to look at presidential campaigns analytically. Nevertheless, I side with the Ragin’ Cajun on this one. Carville’s 1992 catchphrase, “The economy, stupid”, remains the best guide to who’s going to win and why.
What’s new since 1992
I propose adding 2 words to Carville’s sign. What counts is: Feelings about the economy, stupid.
And, I convert Carville’s words into the currency of politics – votes – by refurbishing Michael Niemira’s presidential election model, which also dates from 1992.
Niemira made the case that the University of Michigan’s Index of Consumer Sentiment (ICS) is the best indicator of how voters feel about a sitting administration’s economic management. He designed a simple model for predicting the incumbent party’s share of the popular vote in each November presidential election based on the October ICS level.
To track President Biden’s fate as we approach the 2024 election, I add 3 tweaks to Niemira’s model:
I follow Nate Silver’s approach and focus on forecasting Biden’s and Trump’s percentage shares of the two-party vote going to the two candidates with a realistic probability of winning.
I include an adjustment for the advantage enjoyed by a sitting president such as Biden seeking re-election. Once again, I find myself on the opposite side of Silver, who believes that the “incumbency advantage seems to be declining”. (more on this issue in a future post)
I use an adjusted ICS figure in ESM to allow for the transition now under way from a phone-based survey to a web-based survey.
To give due credit, I could call the end result the Modified Niemira Model. But, I don’t want anyone holding Niemira responsible for my errors. Plus, EconomyStupid Model (ESM) has a more engaging ring.
Why is Trump winning in 2024? The economy, stupid
With ESM as our guide, Donald Trump is on track to defeat Joseph Biden by a comfortable margin: 53% to 47%.
The latest Index of Consumer Sentiment (ICS) reading tells us that Americans are dissatisfied with the current state of the economy and gloomy about future prospects. ICS stood at 77.9 in April 2024 – well below the average level of 86 over the more than 7 decades since the University of Michigan started the ICS survey in 1952.
Adjusted ICS for April, allowing for consistent comparison over time, is below 80. Over 18 presidential elections from 1952 to 2020, the ICS has been below 80 only thrice in October just before election day – 1980, 1992 and 2008. In those elections when consumers were unusually depressed, angry voters either turfed out incumbent presidents, Jimmy Carter in 1980 and George H.W. Bush in 1992, or denied the nominee seeking to succeed his party’s incumbent, McCain in 2008.
Trump’s worst enemy is Trump
ESM illuminates what a bad candidate Donald Trump is.
In the table below, I compare my EconomyStupid Model (ESM) estimate of where Trump’s support should be with:
Trump’s share of 2-party voting intentions when Trump and Biden are the only 2 choices in public opinion polls judged credible by the experts at RealClear Polling (RCP);
Trump’s share of the 2-major-party vote in the RCP average of polls with minor-party candidates Robert F. Kennedy (RFK) Jr., Jill Stein and Cornel West included as choices.
Sources: Author’s calculations of EconomyStupid Model projection and from RealClear Polling 2024-4-25 3:00 pm EDT.
Notes: Underlying premise of reporting Biden and Trump shares of 2-party vote is that the contest between the 2 major-party candidates is what counts and that no minor-party candidate will do well enough to win a state in the Electoral College. I will cover the national popular vote vs. Electoral College issue in a future post.
Given Americans’ gloomy view of the economy, ESM projects that Trump should be attracting 53.3% of all votes going to the two candidates with a chance to win. The Donald should be leading Biden by over 6 percentage points. Instead, Trump is ahead of Biden by about 1 point in the latest polls. Trump is polling almost 3 points below the level of support that he should be at, if he were taking full advantage of voters’ economic discontent.
Also note that Biden loses a bit more support than Trump when pollsters add RFK Jr., Green Party candidate Jill Stein and Justice for All nominee Cornel West.
As Nate Silver points out, the economy is just one among many issues affecting voter choices “from abortion to immigration to the War in Gaza to Donald Trump’s various trials”. Silver also emphasizes:
Biden’s “age [82] is still a big concern for voters”
“cultural issues [such as] wokeness”
Could non-economic policy issues be reducing Trump’s support below his ESM projection? Immigration, foreign conflicts, anti-wokeness and Biden’s age work for Trump. Perhaps the abortion issue is turning some voters against Trump. But, even in this case, the net impact is uncertain depending on how voter turn-out is affected.
One item stands out in Silver’s list of non-economic issues – “Donald Trump’s various trials”. Let’s interpret Silver’s reference to “Trump’s trials” as broadly representative of his “full Donald” package of unbridled behavior. With each defiant court appearance, pugnacious campaign speech and bellicose social media post, Trump cemented the Republican nomination. But, is his full Donald behavior boosting his chances in the November election?
My answer is NO. Trump’s support in current polls is 2.7 points below my ESM projection of where he should be, if he focused his campaign on voters’ economic discontent. That is the penalty Trump pays for acting so badly that he turns off more swing voters than he should be attracting based on economics. Think of the 2.7-point gap as a self-inflicted Trump Tax on his own vote. (I estimate the Trump Tax based on the RCP average of polls that include the minor candidates. Their support may fall as we get closer to election day, but won’t drop to zero.)
Stay tuned to economystupid.substack.com
That’s all to start with. In my next post, I will:
update my ESM projection for the latest consumer sentiment data
reconcile Nate Silver with James Carville
make the case for following the 2024 election race with my EconomyStupid Model (ESM) even though it’s based on bad science