The Hotel California Midterm Elections

This week’s Courier Herald column:

“It’s the Economy Stupid.”  That was the simple and succinct internal slogan used by Democratic Strategist James Carville to keep Bill Clinton’s first campaign for President on track and on message, despite all the internal and external noise that constantly threatened to derail it. 

As a former governor from a small southern state, Clinton was a flawed candidate.  Constant “bimbo eruptions” and charges of draft dodging dogged his campaign constantly.  Carville made the bet that a laser like focus on the economy and the pain everyday Americans were experiencing during a brief and shallow recession would transcend his candidate’s issues.  He was proven correct.

When the economy was much better four years later, we were given “Move On” in the aftermath our nation’s highest profile case of Oval Office sexual harassment ever.  Both were new flavors of the question asked repeatedly in the 70’s and 80’s to voters making their decision:  Are you better off than you were four years ago?

Fast forward a quarter century or so, and we have the party of Clinton messaging on the economy ranging from obfuscation to delusion.  Remember the White House bragging about your 4^th of July picnic costing sixteen cents less?  How about the messaging that went from “The President doesn’t set gas prices” to “Thank President Biden for lower gas prices”?

With early voting in midterm elections underway, some want to change the subject entirely. We’ll get to that in a moment, but first, the title and focus of this column.  This is a Hotel California election for Democrats.  They are all just prisoners here, of their own device.

The setup began in the early morning hours after the November 2020 elections.  Joe Biden was the apparent winner, with a few states close enough to cast brief but legitimate doubt as to what the final electoral count would be when recounts were completed. 

Democrats, who had expected to roll over President Trump, were briefly humbled.  With two runoff elections in Republican “stronghold” Georgia, it appeared the Senate would remain in GOP hands.  Opportunists and sore losers within the GOP grifting apparatus changed the calculus from checks and balances to one party rule.

Congressional Democrats decided to extend the stimulus programs that had been bipartisan with their own additional $1.9 Trillion “American Rescue Plan” and their $700 Billion “Inflation Reduction Act”.  Up until then, any inflation lingering from the prior stimulus packages had both party’s fingerprints on it.  An additional trillion here, another there, and “transitory” inflation is now front and center.

The fact that the name was changed of their key environmental package to something that claims to fight inflation at least shows they were getting the message.  The fact that its centerpiece was to further stimulate demand for electric vehicles that are already on long backorder lists shows they didn’t quite understand how supply and demand affects prices.

To combat this, the Federal Reserve is using interest rates to counteract the effects of stimulative fiscal policy.  Higher interest rates are targeting home prices and stock values. Middle class suburbanites – the swing voters of the last few election cycles, are worried about their home values as they’ve watched their 401K balances decline.

The economy had transcended all other concerns as “the issue” in the upcoming election until this summer, when it was leaked and them became official that Roe versus Wade would be overturned.  Democrats, badly needing an issue to both change the subject from the economy and to motivate their somewhat disinterested base, thought they were handed a lifeline. 

Maybe they were.  The votes are just now being cast.  Polls, and major news outlet headlines, however, tell a different story.

Two represent the bookends that Democrats are now facing.  CNBC reports “GOP holds big lead on key economic issues ahead of November elections.”  The New York Times, hardly one to concede an advantage to Republicans, reports “Democrats’ feared Red October has arrived.”

With polls going against them, and Georgia’s elections looking less and less like a battleground for the state capitol, Stacey Abrams appeared in a safe space – MSNBC – for a closing argument interview.  She chose, quite coarsely, to answer a direct question about how best to deal with inflation by saying abortion rights were the answer. 

I’ll be quite charitable here.  She’s a candidate trying to stay on message, not calling for more mothers to choose abortion in order to combat inflation.  A tone deaf and insensitive candidate, but one on message just the same.

The problem here for Democrats is that the average voter can’t draw a Marshallian Cross to determine supply and demand. They don’t know why firms would like to produce at a point where their marginal costs equal their marginal revenue.  Fundamentals of economic theory are not in most voters’ lexicon.

They do know if they are better off than they were two or four years ago.  Democratic candidates have a hard time talking about that right now.  They are prisoners here, of their own device.