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Voters Were Right About the Economy

Mark Whitehouse writes editorials on global economics and finance for Bloomberg View. He covered economics for the Wall Street Journal and served as deputy bureau chief in London. He was previously the founding managing editor of Vedomosti, a Russian-language business daily.
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What is driving the deep concern that voters expressed about the economy in this week's midterm elections? Does the gloom reflect reality or partisan prejudices?

A look at data across states suggests that despite all the ideological bluster surrounding the elections, real economic conditions probably mattered more.

No doubt, the Republican meme that President Barack Obama can do no good has had an influence on perceptions of the economy. In exit polls, about 90 percent of people who voted for Republicans said they were worried about economic conditions, compared with just 67 percent of those who chose Democrats, according to data from CNN.

Partisan affiliation, though, doesn't appear to be the most important determinant of differences in perceptions across 26 states that took part in congressional or gubernatorial elections. A regression analysis, for example, suggests that the percentage of a state's voters who identified themselves as Republican explained only about 20 percent of the variation in the percentage who expressed concern about the economy. The change in employment over the past two years, by contrast, explained about 45 percent.

This chart gives a sense of the strong relationship between employment gains and the economic mood across states:

It's worth noting that perceptions, however gloomy, have been gradually improving with the slow recovery. In the midterm elections of 2010, about 86 percent of voters said they were worried about the economy, according to CNN's exit-poll data. This time around, that number has declined to 78 percent.

All told, there may be more reality in voters' perceptions than meets the eye.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Mark Whitehouse at mwhitehouse1@bloomberg.net

To contact the editor on this story:
Max Berley at mberley@bloomberg.net