Why Hillary Wins

The media has been fixated on Ted Cruz playing Fantasy President with his fantasy Veep Carly Fiorina, but this was the real news of the day for election watchers.

After a decade when most Americans saw their incomes decline, the latest Census Bureau income data contain very good news: A majority of U.S. households racked up healthy income gains in 2013 and 2014. The facts may not fit the narratives ofDonald Trump, Ted Cruz, or Bernie Sanders, but they do help explain why President Obama’s job approval and favorability ratings have finally passed the 50 percent mark. They also show that Hispanic households made more income progress in 2013 and 2014 than any other group, which may be one reason for their growing support for Democrats. A third surprise: households headed by Americans without high school diplomas racked up their first meaningful income gains since the 1990s, thanks to the large job gains in 2013 and 2014 and the Obamacare cash subsidies beginning in those years.

Most election models look at Presidential approval ratings and income growth during the 2Q of an election year as critical prediction variables for November’s vote share. Income growth and Obama’s approval ratings are both great news for the Clinton camp.

* One word of caution. The Census treats government subsidies as income and the Obamacare subsidies massively change the picture. But large rate hikes are expected and UnitedHealthcare just left many of the exchanges. Getting a raise might mean less if ones healthcare costs go up by MORE. Obamacare is not out of the woods yet in terms of solving America’s healthcare problems. Hillary’s reaction to that will be telling. The political debacle of Hillarycare in the 90s is presumably something she learned from, but the answer might need to be something radical (like Bernie’s plan for Medicare for all) and not something timid and layering more complexity on an already opaque system.

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2 Comments

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  1. The growing support for Democrats among Hispanics may not necessarily be due to their growing income, which really wasn’t exuberant. Rather, it seems that Hispanics claiming membership among the religious Right have now ‘seen the light’ thanks to our friend D. Trump. The puzzle lies elsewhere: hispanics have long been labeled the ‘natural conservatives’ (we have a strong disposition towards the Left, we are largely Catholic, we love our big strong families, etc) and so we expect their growing income and chase of the American dream to make them even more so. The opposite is true. Interesting.

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    • Well, I think the growing income thesis in things like the “Time for a Change” model is that a rise in material conditions beyond expectations tends to benefit the incumbent party. I agree, though, that this would be an incremental addition to the looming Trump candidacy. I imagine that the Donald might cement the Hispanic population (at least non-Cubans) as Democrats for some time, unless Trump pulls a rabbit out of a hat. Would picking Susana Martinez or Rubio win these folks back? I can’t imagine so.
      Also, my focus groups of African-Americans always show that they are far from the liberal worldview on so many issues but they vote 95% Democratic. As long as the Republicans define themselves as a white ethnonationalist party, minorities will continue to flee them almost despite whatever Democrats think on gay rights, deficits, Surestart etc.

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