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What Really Decides Elections? Money in People's Pockets

This post first appeared on Open Left. One of the main problems facing the Democratic Party on a national level is that it caters to the 20-30% of its elected officials who are primarily center-right when it comes to public policy. (For a list of the ways the party caters to this 20-30%, read my article "BREAKING: I am now a conservative Democrat.").  In the upcoming 2010 elections, the net result of this catering is likely to be a a minimal electoral boost for that 20-30% of the party, and a massive electoral setback for the entire party, including that 20-30%. This prediction is based on available empirical studies on electoral outcomes.  It rests first on a study showing that candidates who appear moderate gain about 2% at the polls.  Andrew Gelman:
There is definitely some evidence that moderate candidates do better. Steven Rosenstone discussed this in his classic 1984 book, Forecasting Presidential Elections, and others have looked into this as well.  For example, my 2008 paper, "Should the Democrats move to the left on economic policy?" We also have some graphs in chapter 9 of Red State, Blue State, one showing the (estimated) benefits of moderation in congressional elections, and another graph for presidential elections.  The short story is that moderation can get you something like 2 percentage points of the vote (or, if you want to look at it another way, extremism can lose you something like 2 percentage points).
Now, 2% isn't nothing, and can make the difference in many campaigns.  However, this 2% swing is dwarfed by the impact that changes in real disposable income has on elections. Ezra Klein:
"In presidential elections," Princeton political scientist Larry Bartels says, "a 1 percent boost in election-year income growth has typically increased the incumbent party's vote share by about 2 percent. So an incumbent party that won 51 percent of the vote in an average economic year like 2004 would be expected to win only 46 percent in a recession year like 2008." Which is, as you may remember, pretty much exactly what happened. Congressional elections are a bit more difficult because they're more local, but they end up being predictable, too. Gary Jacobson, a political scientist at the University of California at San Diego, has a model that uses the number of seats the majority party holds, the approval rating of the president and the change in real disposable income, and predicts about 70 percent of the change from one election to the next.
The accompanying graph that Klein produced is also worth a look.  The bottom line is that changes in real disposable income can, and do, have much more impact on electoral outcomes than does the appearance of moderation. Real disposable income is the dominant ideology among swing voters.  This should not come as a shock, or even a mild surprise.  The mushy middle is not full of political junkies, but it is full of people who worry about their pocketbooks.  As such, whether things get better or worse for their pocketbooks, those voters will blame the governing party, and vote accordingly. In an ideal world, Democrats would get credit for moderation, and institute public policies that significantly increased real disposable income nationwide, thus creating a massive electoral landslide in their favor.  Readers of Open Left might remember this as the old eleven-dimensional chess strategy of appearing to be moderate in public, but in fact being a secret progressive when it came time to write legislation (Chris Matthews supported that line of thinking in the first question he asked me back when I appeared on Hardball).  However, following the current "moderate" line of slashing stimulus spending to reduce the size of the deficit is antithetical to getting more money in the hands of voters. Blocking unemployment benefits will result in less money in the hands of voters who are unemployed.  Blocking the Medicare "doc fix" will result in less money in the hands of doctors who vote.  Blocking an extension of COBRA and a public option will result in voters who have to purchase individual insurance having less money in their hands.  Cutting aid to states to prevent layoffs will result in state workers who vote having less money in their hands.  Blocking a cap on ATM fees means less money in the hands of voters.  Blocking $100 billion in the first stimulus resulted in voters of all sorts having less money in their hands.  And that is just a partial list. As a governing party, if you want to win elections, you have to get more money in the hands of voters than they had the year before.  That is simply impossible if your policy focus is on cutting spending, which is the current, dominant mantra of being a "moderate."  Those same "moderates" even want to cut Social security and Medicare payments in order to slightly cut the deficit, which would be a truly disastrous electoral move. Talk about taking money out of the hands of voters! Democrats want to help the center-right members of their party win by allowing them to appear "moderate" to swing voters, and thus water down every piece of legislation the party proposes.  However, all Democrats, including the center-right Democrats, are all going to lose big because they failed to enact progressive public policies that would have resulted in putting more money in the hands of voters.  Whatever benefit the blue Dogs get at the ballot box for appearing "moderate" will be canceled out, several times over, because voters are pissed that they have less money in their wallets. The dominant ideology of swing voters is disposable income.  As such, enact public policies that increase real disposable income, or else face defeat at the ballot box.  It really is that simple.