Wednesday, November 9, 2022

Some Big Picture comments on the 2022 midterm elections


 - by New Deal democrat

No economic news today while we await tomorrow’s big inflation report (Hint: shelter inflation is going to continue to be the big driver); and I think maybe we had a little political event yesterday, so let me make a few brief comments.

1. From the beginning of this year, I told everybody who would listen that (1) the Supreme Court was really and truly going to overturn Roe v. Wade; and (2) as a result, the entire dynamic would reverse, as there would be the Mother of All Backlashes.

And that, in a nutshell, is what happened.

It is still quite possible that the GOP could squeak out a 1 vote majority in the Senate; and it seems more likely than not that the GOP will wind up with a small majority in the House; but this is a red ripple; and the best performance by the in-party in a midterm since 2002 (9/11) and 1998 (impeachment).

2. Another demonstration of second order chaos; namely, when you observe human behavior, the humans always observe back, and change their behavior as a result. Nate Silver and other aggregators had one or two good calls, after which pollsters learned how to game his system. This year, as Dan Guild brilliantly observed several weeks ago, GOP leaning pollsters “flooded the zone” with pro-GOP polls in the last few weeks before the election. That, plus an absolutely ludicrous NYT poll of 500 or so people, led to a narrative that the electorate had suddenly plumped for the GOP in the late going. 

Perversely, that move by the GOP may have had its own backlash effect, causing pro-civil rights (mainly young) voters to panic and realize they had better get out and vote if they didn’t want to lose their rights. This morning, I’ve already read that the GOP won voters over 40 and decisively won voters over 50, while younger voters, and especially voters in their 20s, broke decisively for Democrats, and actually *showed up to vote.*

3. The GOP movers and shakers in their back rooms have to realize how toxic Trump is to their broader electoral prospects. All of Trump’s candidates except one, so I hear this morning, lost (with the jury still out on Georgia, which is probably heading to another runoff).  They are going to encourage Ron DeSantis to run. And if I am Ron DeSantis, I wake up this morning with a big Florida win totally NOT intimidated by Trump.

A 2024 slugfest between Trump and DeSantis in the GOP looks likely. Aside from rooting for injuries, if DeSantis squeaks out a win in the primaries, there is no way Trump is going to fall in line. He will p*** all over DeSantis, and encourage his cultmembers to write in his name anyway.

4. Not much is going to happen in Congress in the next 2 years, but the debt limit ceiling, and judicial nominations, will be major crises should the GOP squeak out a victory in the House or Senate, respectively.

5. Finally, economically, don’t forget that the Fed seems determined to put the US in a deep recession in the next 12 months. This is very not good.