The Bifurcated U.S. Economy

by: Barry Ritholtz

How important was the economy to the election? According to exit polling data, it was the top issue, polling higher than Iraq, Terrorism, or Corruption.

On the day before the election, we noted that It was Still the Economy, Stupid. In an article Sunday, the NYTimes took a similar approach in Maybe You Did Vote Your Pocketbook:

"To paraphrase a Clinton-era mantra, it really might have been the economy, stupid. More than 80 percent of voters in an exit poll, conducted for The Associated Press and television networks by Edison Media Research/Mitofsky International, said the economy was a very important or extremely important issue. That percentage was the highest for any issue, including Iraq and terrorism.

Furthermore, electoral data and government economic statistics suggest that the economy played a role in the outcome: if your state wasn’t among the best economic performers in the last six years, judged by the growth of personal income, it appears that you were three times as likely to vote to throw the bums out."

In the past, we have discussed the Middle Class Squeeze, and the increasing chasm between the top 10% of earners and everyone else.

It turns out that this schism (to a lesser degree) is also reflected geographically. This lumpy economic recovery is being felt differently in different parts of the Nation. Personal Income gains in particular can have varied dramatically from State to State. Some parts of the country have enjoyed decent wage gains, while many others have not.

What was the the political impact to this uneven growth this election cycle? The faster your state's personal income rose over the past 6 years, the more likely you were to elect incumbent GOP representatives (click to enlarge):


Graphic: NY Times