My colleague, Charlie Cook, wrote a smart column this week looking at the possible paths the economy could take in the post-pandemic era. But, while we don't know if the economic recession is going to take the form of a "V," a "W" or a "U," we can already see huge partisan differences in perceptions of the economy. Despite a very real drop in positive perceptions of the economy by both Republicans and Democrats over the last month, Republicans remain much more optimistic about the state of the economy than Democrats. In fact, according to data from the University of Michigan Consumer Survey the gap between Republicans and Democrats is more than twice as large as it was during the economic free-fall of 2008-09.
The partisan gap in perceptions of the economy isn't all that new. A detailed report on this historic divide, written in September of 2018 by the University of Michigan Consumer Survey director Richard Curtin, laid out this phenomenon with data going back to the Reagan administration. What Curtain found was that when a Republican was in the White House, Republicans were much more optimistic about the economy than Democrats. When a Democrat sat at 1600 Pennsylvania Avenue, Democrats were more bullish and Republicans more bearish. This was true in good economic times and bad. In other words, when your team is in the White House, you are willing to cut the president more slack AND give them more credit. When the other team is there, you are less willing to give the president credit for good times and more willing to cast blame on the president in bad times.
But, Curtin found that "an unprecedented partisan divide in economic expectations occurred following President Trump's election, and those differences have persisted unchanged ever since his election." For example, in October of 2016, Democrats were 28 points more positive about the state of the economy than Republicans. By February of 2017, Republicans were 38 points more positive than Democrats — a 66 point shift. Also noteworthy, of course, is the fact that nothing significant happened to the economy during that short window. The only thing that did change was the occupant at the White House. That historically wide partisan gap has remained in the 33-48 point range for 2017-2019. In comparison, the gap over the course of Reagan's tenure averaged 19 points. it was 24 points during the Obama era.
But, even as economic optimism among Republicans has dropped 32 points since February of this year, the gap between Democrats and Republicans perceptions about the state of the economy remains at 40 points.
Compare that to the last economic crisis of 2008-2009. In March of 2008, Republicans were more positive about the economy than Democrats by 20 points. But, by the fall, as Lehman Brothers failed, credit markets froze, and Congress passed TARP, that 20 point gap narrowed to 13 points in October and to just four points in November. By December of 2008, it was Democrats who were feeling slightly better about the economy by 2 points. By April of 2009, that gap started to widen, but was only at D+8 during the 2010 midterms.
Why does this matter? First, it helps explain why a rapidly deteriorating economy has not sunk Trump's job approval ratings. While most Americans are feeling the impact of the worsening economy, Republicans remain more optimistic than Democrats (or independents). In fact, Republicans are 30 points more optimistic about the economy today than they were when another GOP President (George W. Bush) was presiding over an imploding financial and economic situation. The most important question going forward, especially when it comes to Trump's vice-like grip on the GOP base, is if Republican confidence about the economy remains steady as we head into the fall.