Mitchell’s Musings 6-26-2017: It’s the Russia-thing, stupid

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Mitchell’s Musings 6-26-2017: It’s the Russia-thing, stupid Daniel J.B. Mitchell After the Democrats failed to win a highly-contested congressional seat in Georgia on June 20, the political wisdom seems to be that their strategy for the 2018 congressional elections should aim at economic issues rather than the ongoing Russia-thing investigations.1 The Russia thing, after all, didn’t flip the seat. And all the related and unrelated Trump/DC turmoil didn’t flip the seat. There is an ongoing literature on the effects of economic conditions on presidential elections. But 2018 is not a presidential year. My personal sense is that what is likely to drive election results in 2018 is whether things seem to be OK in the economy. There could be some seat gains for Democrats in 2018, since there is said to be some tendency for the party in control to lose some seats in midterm elections. But that is not the same thing as a political revolution. Congressional seats remain in the same GOPfavoring gerrymander that characterized them in 2016. Still, as a strategy for Democrats, there remains the Russia-thing. I recently attended the UCLA Anderson economic forecast. So let’s see what that forecast suggests for 2018. The two charts below basically tell the UCLA story:

The economy, as projected by UCLA, keeps growing at something like 2% per year measured by real GDP. That’s a slower rate than the post-World War II average, and there is a debate as to whether 2% is a “new normal” or some kind of aberration. But note that if it is an aberration, the prospect would then be for faster growth, not slower. And given the assumptions that suggest 2% is a reasonable number, unemployment is projected to decline slightly and bottom out in 2019. Again, this economic story is not the stuff of political revolution. Democrats can complain about the economy, but the UCLA forecast suggests that issue will not be a plus for them. Now you can always point to scenarios that could throw the economy into recession. But the time remaining for any such scenarios to develop before the November 2018 elections is diminishing. The 1

"Sen. Murphy on Dem's Georgia loss: Russia has been a distraction," 6-21-2017, Politico. Available at: http://www.politico.com/story/2017/06/21/georgia-special-election-2017-democrats-lose-239798.

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