{"id":525232,"date":"2010-04-12T15:06:34","date_gmt":"2010-04-12T19:06:34","guid":{"rendered":"http:\/\/www.theatlantic.com\/business\/archive\/2010\/04\/how-will-the-economy-affect-midterm-elections\/38801\/"},"modified":"2010-04-12T15:06:34","modified_gmt":"2010-04-12T19:06:34","slug":"how-will-the-economy-affect-midterm-elections","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/525232","title":{"rendered":"How Will the Economy Affect Midterm Elections?"},"content":{"rendered":"<p>It is by now conventional wisdom that the economy is going to cost Democrats big in the midterm elections . . . so it&#8217;s refreshing to see folks like <a href=\"http:\/\/www.newyorker.com\/talk\/financial\/2010\/04\/19\/100419ta_talk_surowiecki\">James Surowiecki<\/a> challenge that wisdom.&nbsp; After all, the economy has started growing again, and, in what must be an astonishing coincidence, we&#8217;re just about to get a big river of stimulus money sluicing through voter pockets.<\/p>\n<p>Possibly.&nbsp; But conventional wisdom has a lot going for it.&nbsp; I agree with Surowiecki that what matters is not the headline numbers on the newspaper page, but peoples&#8217; actual felt experience with the economy, particularly real income growth.&nbsp; That felt experience is maybe improving a tiny amount.&nbsp; Consider the following, however:<\/p>\n<ul>\n<li>At this point, there is not enough time for employment<br \/>\nto recover significantly.&nbsp; We lost a lot of jobs, and if analysts are<br \/>\nright that this represents mostly structural change in the economy<br \/>\n(rather than a temporary collapse in aggregate demand), employment will<br \/>\nrebound only slowly.&nbsp; It took years under the Bush administration to<br \/>\nwork off the relatively modest collapse around 9\/11.<\/li>\n<li>Most<br \/>\npeoples&#8217; major asset will still be worth a whole lot less than it used<br \/>\nto be.&nbsp; And people who are pinched will not have the housing piggybank<br \/>\nto cushion their anxiety.<\/li>\n<li>Delinquencies are finally slacking<br \/>\nof, but the backlog of foreclosures is eventually going to come on the<br \/>\nmarket, further pushing down home values in many areas.<\/li>\n<li>We<br \/>\ncan&#8217;t really afford to expand the various forms of housing support much<br \/>\nfurther . . . but if we stop them, housing markets will look even worse.<\/li>\n<li>Low<br \/>\ninflation means the cost of living doesn&#8217;t go up . . . but people are<br \/>\nnow conditioned to expect nominal wage increases.&nbsp; Money illusion is<br \/>\ngoing to make people perceive the labor market, and income growth, as<br \/>\nworse than they actually are.<\/li>\n<li>Health care costs are going up<br \/>\ndue to selection effects in individual and small business<br \/>\nmarkets&#8211;healthy people are cutting the expense when they lose their<br \/>\njobs, landing companies with a smaller, sicker pool.&nbsp; That&#8217;s going to<br \/>\nfurther cut into any wage growth.<\/li>\n<li>Budget deficits are almost<br \/>\ncertainly going to keep going up in the short term.&nbsp; People get<br \/>\nespecially touchy about deficits when they are personally strapped.<\/li>\n<li><a href=\"http:\/\/futures.tradingcharts.com\/chart\/CO\/M\">Oil prices are still rising<\/a>.<\/li>\n<\/ul>\n<p>I&#8217;m<br \/>\nnot saying the Democrats can&#8217;t pull it out.&nbsp; Nothing is impossible, and<br \/>\nthey have GDP growth on their side.&nbsp; On the other hand, they&#8217;re facing<br \/>\nsome pretty strong headwinds&#8211;much stiffer than Bill Clinton faced when<br \/>\nhe lost the House to the Republicans in 1994.&nbsp; And contra what I was<br \/>\nassured by many Democrats, health care reform has <a href=\"http:\/\/www.pollster.com\/polls\/us\/healthplan.php\">not gotten more popular<\/a> since it passed; arguably, it&#8217;s gotten slightly less popular.<\/p>\n<p>That base had better be <i>very<\/i> motivated.<br clear=\"both\" style=\"clear: both;\"\/><br \/>\n<br clear=\"both\" style=\"clear: both;\"\/><br \/>\n  <a style='font-size: 10px; color: maroon;' href='http:\/\/www.pheedcontent.com\/hostedMorselClick.php?hfmm=v3:25a795f02174aa923a3a4887949fb43f:tgRSi%2BEkYw8MoQPlfyc38FkAlIXCzhuW5WTiRpUHmy2kwChZJXL%2BEe8fUwzVuBDCm6fHgOhh2Ir0'><img border='0' title='Email this Article' alt='Email this Article' src='http:\/\/images.pheedo.com\/images\/mm\/emailthis.png'\/><\/a><br \/>\n  <a style='font-size: 10px; color: maroon;' href='http:\/\/www.pheedcontent.com\/hostedMorselClick.php?hfmm=v3:a5f7a62301dbc09902933c06eb509481:ecwdLNlkJLQYBy%2FRJyCtK8hfhoMSmSIxVgAQ7VNDhmpvXZfKgZtury%2FELdWRP%2FPOtxDQQBKqNG3k'><img border='0' title='Add to digg' alt='Add to digg' src='http:\/\/images.pheedo.com\/images\/mm\/digg.gif'\/><\/a><br \/>\n  <a style='font-size: 10px; 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After all, the economy has started growing again, and, in what must be an astonishing coincidence, we&#8217;re just about to get [&hellip;]<\/p>\n","protected":false},"author":80,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-525232","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/525232","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/80"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=525232"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/525232\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=525232"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=525232"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=525232"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}