Rebucci: Voters judge midterms by personal costs, not macro data

Economic data indicates a strong U.S. economy, yet voter sentiment reflects a different reality ahead of the midterm elections. Alessandro Rebucci, an economics professor at Johns Hopkins Carey Business School, stated that voters base their opinions on the personal experience of the cost of living rather than macroeconomic statistics. This disconnect defines the current political landscape.

The term "k-shaped economy" describes this divide. It refers to a graph showing high-income earners and asset owners performing well while middle and lower-income earners lag behind. Rebucci noted that wealthy households spend a larger share of their income and wealth compared to the poorest households.

President Donald Trump has argued that the U.S. economy is thriving. On Aug. 5, he told a crowd in Las Vegas, "The economy is the greatest economy we’ve ever had, by far." This claim conflicts with recent consumer surveys showing voters hold negative views on their financial situation. Rebucci observed that each election cycle typically features the ruling party asserting economic strength.

Rebucci explained that the distribution of economic gains influences how large segments of the population feel about the nation's financial health. He described the current state as an economy that is comfortable with inequality. He argued the goal is not to eliminate inequality but to adjust the system so people can live with it.

According to Rebucci, a key factor for voter perception is the belief that individuals have a chance to reach the top income brackets. He identified the top 10% and top 1% as the benchmarks for this perception. Voters assess their economic standing relative to these upper tiers.

The midterm elections are scheduled for November. Candidates will continue to debate the economic outlook. The contrast between aggregate data and individual experience will likely remain a central theme in campaign messaging.

Rebucci emphasized that the perception of economic mobility is critical. He stated that the most important thing for people to perceive is that they have a shot at being in the top 10% or top 1%. This view on upward mobility shapes their current economic feelings.