by Lowman S. Henry | November 19, 2007

Economic concerns may impact Presidential election

Pennsylvanians are blue and it has nothing to do with the state becoming more Democratic in its voting patterns. Rather, residents of Penn’s Woods are in a deep blue funk over the direction of the nation’s economy – even while admitting they are personally doing as well or better than they were a year ago.

Results of a statewide poll conducted in October by the Lincoln Institute of Public Opinion Research, Inc. found nearly two-thirds (62%) of respondents say the national economy is off on the wrong track compared to the 28% who feel the economy is headed in the right direction.

The poll was part of a study entitled “Securing the Future” conducted by the Lincoln Institute and funded by a grant from the John Templeton Foundation of Radnor, Pennsylvania. In a focus group session that was part of the study, participants cited slow wage growth, higher prices – particularly for energy, the housing mortgage crisis, the weakening dollar, and record government debt as factors driving their negative views of the economy.

Despite the decidedly negative overall view most of those polled held when asked about the nation’s economy, only 24% said their personal economic situation is worse now than it was one year ago. A majority of respondents – 53% – said they are doing about the same now as they were one year ago. The remaining quarter said they are actually better off now than they were a year ago.

If 75% of the respondents are financially as well off or better off than they were a year ago, why then is there such a pessimistic view about the larger economy? Focus group participants admitted their views have been swayed by media coverage of the nation’s economic ills, which they say has been overwhelmingly negative. Also, many feel that staying the same is not good enough. The failure to do better yields an attitude of disappointment.

Looking ahead, more Pennsylvanians feel their personal financial circumstances will improve over the coming year (29%) than expect their fortunes to get worse (16%), again a majority – 51% – expect their situation to be about the same one year from now as it is today.

Is there a clue in these numbers as to how Pennsylvanians might vote in the 2008 Presidential elections? In 1992, James Carville, the campaign manager to candidate Bill Clinton, famously said “It’s the economy, stupid.” Carville felt the economy to be such an overarching issue that he posted those words on the wall of the Clinton campaign headquarters.

The economy took a timely dip for Clinton in late October of 1992, sending President George H.W. Bush into early retirement and installing the former Arkansas governor in the White House for the first of his two terms.

This was not the first time in recent Presidential history the economy played a pivotal role in the outcome of a Presidential race. In 1980, the U.S. economy was wracked by out-of-control inflation, high interest rates, and high unemployment. During his first debate with President Jimmy Carter the Republican candidate Ronald Wilson Reagan asked Americans if they were “better off now than they were four years ago.” The answer was a resounding “no,” and Reagan dispatched Carter to the pages of the history books.

In the absence of an immediate national security threat, the economy is typically the key determining factor in a Presidential Election. At the moment, economic well-being is competing with Iraq as the dominant issue. Barring a dramatic turn for the worse in Iraq, or a new terrorist attack upon the American homeland, economic issues are likely to again dominate the 2008 campaign.

The key to victory then will be which party can pin the blame for the current perceived sluggishness on the other; is it the fault of President George W. Bush or the fault of the Democratic-controlled Congress? And, as with Reagan in 1980, which candidate will develop the message and the credibility to emerge as the person Americans will have confidence in to lead the nation forward economically?

Pennsylvania will again be a key battleground state and our poll shows serious concerns over the direction of the nation’s economy. The candidate who best addresses those concerns is the candidate who will most likely will win Pennsylvania, prevail nationwide, and inherit the keys to the White House.