Perceptions that the economy’s bad can cost you an election, even if the economy isn’t actually bad

After a lengthy “vibecession,” Americans’ views on the economy are starting to improve. In an election year, political campaigns keep a close watch on how voters assess the economy, since many voters say they use economic conditions to help determine how they will vote. But how the economy is actually doing may not be as important as how voters think the economy is doing.

One classic example of this is the 1992 presidential election between George H.W. Bush and Bill Clinton. 

“The economy in 1992, was actually getting better, and nobody was feeling it. Or if people were feeling it, it wasn’t being described as getting better,” said Diane Heith, a professor of government and politics at St. John’s University in Queens, New York. The country was in an economic recovery following a recession, and the topline macroeconomic numbers looked good. But people still felt like the economy was bad. 

Clinton actively campaigned on the “bad” economy, and Bush complained about the disconnect on the campaign trail. 

“Conversations about improving economy did not happen until well, late in the election year,” said Heith, “and as a result, the conversation turned on who could handle it better, and Clinton was winning that argument.”

Marc Hetherington, a political science professor at The University of North Carolina at Chapel Hill, was a graduate student at the time, and explored what happened, publishing research on how that disconnect eventually contributed to Bush’s loss to Clinton. 

“This was one of the very first times that the economic forecasting model — using things like GDP and inflation and unemployment to predict the percentage outcome for the incumbent party — that it predicted the wrong winner,” said Hetherington. “What I found was that the more heavily exposed to news people were — other things being equal — the more negative they saw the economy.”

Bush, too, blamed the media for a hyper-focus on negative news about the economy, and a lack of focus on positive economic trends. And there are lessons from 1992 that can apply to the 2024 race, said Hetherington. 

“Perceptions are more important than reality,” he said. “People vote on their perceptions, not on the actual data itself.”

And even the economic data or experiences voters do consider, may not be most relevant, said Gabriel Lenz, a political science professor at the University of California, Berkeley.

“Research suggests that voters are somewhat confused. They think they’re evaluating the old economy, or trying to answer Reagan’s question, ‘Am I better off than I was four years ago?,’” said Lenz. “But they actually end up, instead, answering the question, ‘Am I better off than I was about a year ago?’ And that’s a strange way to elect our presidents, especially since what happens in the election year economy does not predict the future very well at all.”

People have a hard time remembering the economy of four years ago, especially right now, when the economy of four years ago was upended by the pandemic. 

But the economy consistently ranks at or near the top when polling firm Gallup asks people what the most important problem in the country is, and that encourages campaigns to keep the issue at the forefront. 

“I would say typically, if the economy is bad, it’s going to have more influence on the outcome than if the economy’s good,” said Jeff Jones, a senior editor at Gallup. And despite the improvements in the current economy, “we still find about six in ten Americans saying that they are experiencing hardship from paying higher prices. We find that people think they’re personally worse off than better off.”

Part of that, said Heith, goes back to the same problem Bush had in 1992: How people perceive the economy.

“We are living in an era of a challenging time for facts,” she said. “Because what do we believe is true? Where do we get that information? How do we understand information? How do we determine what’s true and what is just spin? And, and that’s becoming more and more difficult, especially for voters who rely on only one source of news for their information or rely on a few authority figures or rely on their friends on social media.”

Heith said the narrower your bubble of information, the less likely you are to get an accurate picture of economic reality.