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ABC News
Red and Blue Economies?

(cowritten with John Sides)

Democrats feel better about the economy when Democrats are in power, and Republicans feel better when their party rules. What’s striking, though, is how quickly these perceptions can change.

For example, in mid-September, John McCain notoriously said, “The fundamentals of our economy are still strong.” But then in early March, he said that the American people “want to know how we got into this ditch—the worst economic crisis since the great Depression.” Based on these two statements, the slide into the ditch apparently occurred sometime between September 16 and March 3.

Similarly, University of Chicago economist Casey Mulligan spent the end of 2008 arguing that the economy is just not that bad, but then changed course in March, writing that “the crash of 2008 did not bother me” but “the crash of 2009 is more worrisome . . . So far productivity has been good in this recession, but 2009’s stock market could well see that changing.”

It’s no surprise that John McCain and Casey Mulligan’s views on the economy differ from those of Rahm Emanuel and Paul Krugman, or for that matter Barack Obama, who just last week was beginning to see “glimmers of hope” in the economy.

But the extent of the differences in perceptions between Democrats and Republicans has increased in the past thirty years, according to the research of Joseph Bafumi in his Ph.D. thesis on “the stubborn American voter.” He found that voters are less willing to vote based on past performance but more willing to offer evaluations that, even if inaccurate, fit their partisan predispositions and vote choices.

A good example comes from the research of Larry Bartels. He analyzed a 1988 survey that asked “Would you say that compared to 1980, inflation has gotten better, stayed about the same, or gotten worse?” Amazingly, over half of the self-identified strong Democrats in the survey said that inflation had gotten worse and only 8% thought it had gotten much better, even though the actual inflation rate dropped from 13% to 4% during Reagan’s eight years in office. Republicans were similarly biased about the Clinton-era economy: in 1996, a majority of Republicans thought that the budget deficit had increased. This partisan filter was also evident after the Democrats’ retaking of Congress in 2006. Research by Alan Gerber and Greg Huber shows that Democrats became much more optimistic, and Republicans more pessimistic, about the national economy.

Views about foreign policy manifest a similar bias. For example, from 1965 through 1968, Democrats were more likely than Republicans to support the Vietnam War, but starting in 1969, it was the Republicans who were (slightly) more hawkish.

Could such biases be a product of the relatively mild economic conditions of the past twenty years? Early returns from 2008 and 2009 suggest that partisan biases still operate. According to Gallup Poll data from just before the November election, 20% of Republicans and 8% of Democrats were “satisfied with the way things were going in the United States.” Immediately after Obama’s inauguration, the parties flipflopped: 18% of Democrats and 14% of Republicans expressed satisfaction. That gap has only grown. In February polls, 20% of Democrats but only 10% of Republicans expressed satisfaction.

The same pattern emerges in consumer confidence. ABC News surveys surveys show that the views of Republicans became 19 points more negative between October and mid-April. Meanwhile, the views of Democrats improved by 10 points, even as the economic news became grimmer.

To be sure, large majorities of both Democrats and Republicans continue to be dismayed with state of the country. Partisan biases cannot entirely erase events as salient as this dismal economy. But we have every reason to suspect that partisan bias will continue to matter. Although commentators have been debating how the parties might come together on policy issues in a “bipartisan” or even “post-partisan” fashion, a prior and equally important task is for them to come together in their perception of the facts.