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If control of the House of Representatives passes to Republicans this fall, economist Jim Doti thinks he has found the engine of political change: the gas pump.
The veteran economic forecaster from Chapman University was trying to see what historical economic, demographic or voting pattern factors might provide numerical clues for November’s midterm elections in which control of the House is at stake.
Doti’s formula suggests Republicans will take control of the House by flipping 53 of the 435 legislature seats to the GOP side of the political aisle in November. The turnaround isn’t terribly surprising given that the party controlling the White House has lost an average of 27 midterm seats since World War II. And over the Fourth of July weekend, forecasters at fivethirtyeight.com gave the GOP an 87% chance of winning the house in the first fall projection for 2022.
Political histories are not infallible predictions of future election results. But Doti was surprised to discover the key vote changer that is bad news for President Joe Biden and his Democrats: record high gasoline prices.
“First of all, let me say that it was a big surprise for me,” says Doti.
Price points
Pump pain was not on Doti’s mind when he began the research with fellow Chapman professor Fadel Lawandy. He was betting big swings in the vote would follow inflation, which in 2022 hits 40-year highs.
But when the professors looked at voting patterns against traditional measures of the cost of living, such as the Consumer Price Index, Doti said: “I couldn’t find anything, even when you look at some of our periods of high inflation.”
Gasoline prices had therefore entered his formula and, to the surprise of the professors, fuel inflation was a significant political driver. The out-of-power party won more seats midterm in the House when gasoline was more expensive.
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Also noteworthy are the only two times the party in the White House has strengthened its political base in the House midterm – Bill Clinton’s second term (1998) and George W. Bush’s first term (2002). .
Gasoline prices fell during these two outlier periods.
So why is gasoline — a relatively modest expense for many Americans — such a political flashpoint? This is the simplicity of economic measurement.
“Every week, people fill the tank. They see these high prices,” says Doti. “It’s not like reading the CPI. Or read the Wall Street Journal. It affects their wallet, and they get it. They are restless.
Bad start
Doti’s research shows that Democrats start the midterm political season in a weak position.
The model revealed the modest House advantage of Democrats — it’s currently only a 10-seat advantage — translates to 10 seats lost in November.
Biden’s unpopularity doesn’t help. The president earned a low approval rating of 41% in May, according to Gallup. That compares to an average of 51% at the same time for presidents since World War II. Chapman’s formula says that’s nine more Democratic seats lost.
Yes, there is decent economic growth — Biden’s 2.8% gross domestic product expansion is better than the 2.5% post-WWII average. But that only nets the Democrats one seat by this calculation.
And a Republican winning the governorship of Virginia — an election that has proven to be a leading indicator of political fortunes — results in a Republican pick-up of six House seats, according to the formula.
Then consider gasoline prices – up 61% year-on-year versus average increases of 2.5% per year. That pain at the pump is worth 29 seats to Republicans — literally giving them the House if this Chapman prediction is correct.
You don’t need a PhD in economics to figure out that if people are voting with their wallets, gas prices are a clear winner for Republicans. And a degree in psychology isn’t necessary to understand the emotional response gas prices can create — and voters often act from their hearts.
For me, however, what will be interesting to watch is what voters think this fall on hard-to-quantify topics. Supreme Court actions on reproductive rights or gun control. Or the hearings on the January 6 uprising.
I’ll note that the 1974 midterm elections — when Republicans controlled the White House and lost 48 House seats — were the party’s second-worst result since World War II. By the way, the 50 seats lost in Dwight Eisenhower’s second term in 1958 was the biggest drop in the GOP.
What happened in 1974?
Gasoline prices jumped 33% to 53 cents per gallon. Inflation was 11%. But Richard Nixon also resigned from the presidency. Oh, and it was the first midterm election after the Supreme Court made abortion a right in every state in Roe vs. Wade.
summary tale
Doti tells the story of a recent visit to a graphic design class at Chapman University.
The students had to draw a political caricature. Doti was there to provide an economic overview highlighting the country’s inflation challenges.
And what was the mission graphic teacher’s favorite cartoon theme? A humorous sketch of a gas station where the price was cleverly displayed at $18.89 per gallon.
“It’s reminiscent of people seeing it, it’s transparent,” Doti says of the fuel pump’s political power. “The analysis clearly shows that gasoline prices affect how people vote in midterm elections, but not the general trend in consumer prices.”
“real” results
I wondered if real estate mattered too, politically speaking.
So I loaded up my trusty spreadsheet with US price history dating back to 1953 on dqydj.com. Tracking the past 17 midterm elections with much simpler math than Doti’s analysis, a pattern stood out as I watched the fluctuations in “real” house prices in the 12 months leading up to an election. mid-term. (These are changes in value minus inflation.)
There were six mid-term years where these real home values depreciated.
This list included the huge loss of GOP seats in the House in 1958 and 1974 – plus 1966 (47 Democratic seats lost), 1990 (eight GOP seats lost), 1982 (26 GOP seats lost), and 2010 (64 seats lost). Lost Democrats). Those years of weak housing resulted in average losses of 41 seats for the party in the White House.
So what happens when U.S. home prices are up in a mid-year?
That’s good news for the party in the White House — a loss of just 17 House seats, on average.
How are we doing so far? The real value of homes has increased by 11% over the past year.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be contacted at jlansner@scng.com
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Post expires at 7:26pm on Friday July 15th, 2022