Model Shows Pocketbook Issues No.1
MACOMB, MICH. — REPUBLICAN state Sen. Doug Carl is pretty blunt about George Bush's reelection chances: "If the recovery kicks in, then he'll do much better. If not, it may not matter what he says," Senator Carl said a few days before the Michigan primary.
It is a truism in politics that people vote their pocketbook. In good times, they vote for incumbent presidents. In bad times, they kick them out. But is that really true?
Yes, says Gregory Markus, a research scientist at the University of Michigan's Institute for Social Research. He's looked at presidential elections all the way back to 1956. His not-so-startling conclusion: Economics matter - greatly.
Interestingly, it's not how people feel the economy is doing, Professor Markus says, but the actual change in their take-home pay after inflation and taxes. "Every 1 percent change in real, per capita disposable income leads to about a 2.5 percentage change in the vote for the incumbent. It's a fairly powerful effect."
Using his economic model, Markus has correctly predicted seven of the last nine elections. His best showing was in 1960, when the model came within 0.7 percentage points of predicting Richard Nixon's 49.5 percent vote. The model predicted the wrong winner in only two elections. In 1968, Hubert Humphrey lost with 49.6 percent of the vote instead of the predicted win with 52.7 percent. In 1976, President Gerald Ford lost with 48 percent of the vote instead of the predicted 53.1 percent winning margin.
"It's an interesting model," says Timothy Bledsoe, a political science professor at Wayne State University. "If the economy is especially strong or especially weak, it is decisive. If it's somewhere in between, other issues or other matters are key."
So which way will the wind blow this year? From the look of things, the vote in November could be very, very close - assuming that President Bush wins his party's nomination. A few weeks ago when Markus fed the economic projections into his model, Bush came out on the losing side with 49.7 percent of the vote. Now, new economic forecasts plugged into the model give Bush a razor-thin edge of 50.07 percent.
The major change is not an economic upturn. It's Bush's looser income-tax withholding plan, which will put more money - temporarily - into American wallets, Markus says. "The interesting question is whether citizens will think of that as an increase in disposable income or not."