Can Democrats Win on the Economy?

AW
February 11, 2021

Over the last couple of weeks, we've heard much chatter about how Democrats are applying lessons learned from the 2009 stimulus package to crafting the $1.9T COVID relief plan. Overall, most Democrats agree that they didn't pump enough money into the economy, which meant a longer and less robust recovery.

That weak recovery — combined with a divisive fight on health care reform and climate policy — proved to be a drag on Pres. Obama's approval ratings and his party. By October of 2010, Obama's job approval was just 47 percent and voters disapproved of the job the president was doing on the economy by 10 points (43 percent to 53 percent). Just a few weeks later, Democrats lost 63 seats and control of the House.

Democrats' memory of that 2010 midterm blowout isn't the only thing motivating Democrats to swing for the fences on government spending. For much of the 1990s and early 2000s, Democrats worked hard to shake the 'tax and spend' label with which Republicans had effectively tagged them. Some of the most vocal voices on controlling debt and deficit were Democrats like Sen. Ben Nelson of Nebraska and Sen. Kent Conrad of North Dakota. Those voices are now, for the most part, gone.

President Donald Trump's blue-collar populism also moved the GOP away from its traditional fiscal constraint. Gone was talk of reigning in entitlement spending that had been a critical pillar of GOP orthodoxy for the last 10-15 years. And, then there was the deficit-busting 2017 tax cut legislation that Republicans passed under similar reconciliation rules. "Republicans like Ron Johnson and Rob Portman pushed for spending like drunken sailors for tax breaks for the wealthy and well-connected but now want to be 'targeted' when it comes to giving aid to working families." Maura Quint, Executive Director of the progressive group Tax March emailed to me. "Supporting the President's plan for full COVID relief, with this pandemic raging in their states, should be easy."

Of course, we also know that Trump effectively turned economic issues into identity issues. Or, as Lynn Vavreck, Professor of American Politics and Public Policy at UCLA and one of the co-authors of "Identity Politics," a seminal study of the 2016 election, reminded me when I interviewed her last spring, when it comes to Trump, talk of the economy is never just about the economy. In many ways, Vavreck argued, Hillary Clinton and Democrats had a pretty good story to tell about the economy back in 2016. While it wasn't rocketing to new heights, it was growing and had made big improvements from the time that Obama took over in 2009. But, Vavreck argued, "Trump was able to take that slowly growing economy and really change the focus of the election off of that and onto these identity inflected topics and turned the economy into one of those identity inflected topics...[it] wasn't so much are you worried about losing your job, but are you worried about losing your job to people who are coming here illegally and don't deserve your job?" 

Democrats also saw that Trump's decision to run the economy 'hot' paid political dividends. Even as Pres. Trump's overall job approval was consistently underwater, voters did give him credit on the economy. In fact, polling taken in the days after the January 6 attack on the US Capitol found Trump's approval ratings on the economy holding strong. A Marist/NPR/PBS poll (1/11-13) showed Trump's overall job approval had slipped to 38 percent, with 57 percent of Americans disapproving of the job he was doing as president. On the issue of handling the economy, Trump was well above water at 51 percent approve to 45 percent disapprove. Among independent voters, approval of Trump's handling of the economy was a robust 19 points (57 to 38 percent). A CNN poll released around the same time (1/9-14) found similar results. Trump was underwater on his overall job approval by 28 points but got positive ratings on his handling of the economy (+8) — including a 22 point advantage among independents (59-37 percent).

All of these factors seem to have led to Biden's decision to, in the words of the New York Times economic correspondent Neil Irwin, support legislation that "would pump enough money into the economy to, in effect, intentionally overheat it. Or at minimum, it would push the limits of how fast the American economy can rev." If it works, this could "achieve a boom-time economy quickly, rather than muddle along with millions out of work for years."

So, will a 'revved up' economy be enough to help Democrats avoid a messy midterm election? Moreover, even if the economy improves, would Biden and Democrats in Congress get the political credit?

Getting credit for a good economy is harder than it looks. Opinions about the economy — like everything else in our culture — are more polarized than ever. When a Republican is in the White House, Republicans are optimistic about the economy, while Democrats are more pessimistic. Once a Democrat sits at 1600 Pennsylvania Avenue, those roles reverse; Democrats are optimistic while Republicans are much more pessimistic. In other words, it is hard for a president to get credit from Americans of the opposing party for a good economy, even if the data shows it to be true.

Richard Curtin, Director of the University of Michigan Surveys of Consumers, wrote a fascinating paper in 2018 documenting this phenomenon. Earlier this year, when I asked him what he expected for 2021, he told me "the data provide no reason to expect the partisan gap will disappear or significantly lessen any time soon."

And, he was correct. In June of 2020, when Trump was president, Republicans were 50 points more optimistic about the economy than Democrats. This month, those numbers have flipped, with Democrats now 40 points more optimistic than Republicans.

While Biden starts his tenure with a majority of Americans giving him positive ratings (he sits at a 53 percent job approval in the FiveThirtyEight average), opinions on his ability to rebuild the economy are mediocre. For example, a recent Navigator poll conducted by Democratic polling firms Global Strategy Group and GBAO (1/27-2/1) found that Biden and Democrats have a healthy lead over Republicans on whom Americans trust on key issues like combatting coronavirus (+27), improving health care (+20), and healing divisions in the country (+22). That lead is smaller but still in positive territory among independent and white voters as well.

But, when asked who they would trust more to 'rebuild[ing] the economy,' Biden and Democrats have a smaller six-point lead over Republicans (48 percent to 42 percent). Among independent voters, that lead is just four points (34 percent to 30 percent). Among white voters, Republicans are more trusted by 10 points (50 percent to 40 percent). 

Just this week, I sat in on a small focus group (five people) who supported Biden in 2020 after voting for Trump in 2016. These are the kinds of voters critical to Biden's 2020 success and a potential addition to the Democratic coalition for 2022 and beyond. Obviously, this is a small sample. But, it does help to flesh out the quantitative data that I mentioned earlier.

While two of these participants explicitly defined themselves as Republicans, and all voted for Trump in 2016, this group was broadly critical of both Trump and the party. When asked to give a word or phrase describing the Republican Party, they threw out words like "broken," "irrational," and "complete dumpster fire." A number of them noted that they had supported Trump the first time around because of his business credentials and the fact that he wasn't a politician. "I voted for Trump in 2016 because he was a businessman and thought that he'd do better," said one woman, "But he didn't. The last three months he's made this country a laughingstock all over the world." Another man said that he was impressed with Trump's first year in office, but "the last year and a half, that's when the shitshow had started."

Even so, when asked who they trusted more to 'rebuild the economy' none picked Democrats. A number of them also wanted to see tighter parameters put around the stimulus bill, including targeting it mostly to frontline workers. A fear of Democrats “spending too much” was also raised. 

So, can a big-spending stimulus bill be the answer in not only revving up an economy, but changing perceptions of the Democratic Party? Can money, literally, buy Democrats love from those who are wary of Democrats’ economic prowess? 

Joel Payne, a Democratic strategist and former Sen. Harry Reid staffer, argues that in 2009, "Democrats found themselves in a similar governing scenario as today. But we were definitely more timid and lack some of the necessary confidence to go big like our constituents expected us too. Biden and his team have internalized those lessons and are showing with their handling of the COVID relief package that they will not allow Republicans to hide the ball on the key items on their agenda."

Another key to success, as Payne hints at, is being willing and able to sell a stimulus package. To brag about it, and own it, instead of assuming that voters are going to give them credit for an improving COVID response and economic recovery. 

Rich Davis, a Democratic strategist and veteran campaign ad maker, told me that "too often as Democrats we don't recognize the role sheer CONFIDENCE plays in leading and governing." Over the last few years, a number of Democrats have complained that Pres. Obama failed to sell his economic success story. However, Biden, as one Democratic strategist said to me this week, is a more natural salesman who is prone to more sunny optimism than his Democratic predecessors (remember "GM is alive and Osama bin Laden is dead," or that the Affordable Care Act was a "Big F-ing Deal")?

Of course, all the selling and spinning in the world doesn't work if in the next six months or so vaccines aren't getting distributed or if millions of people remain unemployed. Confidence matters in politics, but at the end of the day, competent governing delivers success. 

AP Photo/Alex Brandon