This post is written jointly with Chris Wlezien.

We were given the following prompt in July 2022 and asked to write a response: “The Economy, Stupid: Accepted wisdom has it that it’s the economy that matters to voters. Will other issues matter in the upcoming midterm elections, or will it really be all about the economy?”

In the Gallup poll taken that month, 35% of Americans listed the economy as one of the most important problems facing the country today, a value which is neither high nor low from a historical perspective. What does this portend for the 2022 midterm elections? The quick answer is that the economy is typically decisive for presidential elections, but midterm elections have traditionally been better described as the swinging of the pendulum, with the voters moving to moderate the party in power. This may partly reflect “thermostatic” public response (see here and here) to government policy actions.

It has long been understood that good economic performance benefits the incumbent party, and there’s a long history of presidents trying to time the business cycle to align with election years. Edward Tufte was among the first to seriously engage this possibility in his 1978 book, Political Control of the Economy, and other social scientists have taken up the gauntlet over the years. Without commenting on the wisdom of these policies, we merely note that even as presidents may try hard to set up favorable economic conditions for reelection, they do not always succeed, and for a variety of reasons: government is only part of the economic engine, the governing party does not control it all, and getting the timing right is an imperfect science.

To the extent that presidents are successful in helping ensure their own reelection, this may have consequences in the midterms. For example, one reason the Democrats lost so many seats in the 2010 midterms may be that Barack Obama in his first two years in office was trying to avoid Carter’s trajectory; his team seemed to want a slow recovery, at the cost of still being in recession in 2010, rather than pumping up the economy too quickly and then crashing by 2012 and paying the political price then.

In the 1970s and 1980s, Douglas Hibbs, Steven Rosenstone, James Campbell, and others established the statistical pattern that recent economic performance predicts presidential elections, and this is consistent with our general understanding of voters and their motivations. Economics is only part of the referendum judgment in presidential elections; consider that incumbents tend to do well even when economic conditions are not ideal. The factors that lead incumbent party candidates to do well in presidential elections also influence Congressional elections in those years, via coattails. So the economy matters here. This is less true in midterm elections. There, voters tend to balance the president, voting for and electing candidates of candidates of the “out-party.” This now is conventional wisdom. There is variation in the tendency, and this partly reflects public approval of the president, which offers some sense of how much people like what the president is doing – we are more (less) likely to elect members of the other party, the less (more) we approve of the president. The economy matters for approval, so it matters in midterm elections, but to a lesser degree than in presidential elections, and other things matter, including policy itself.

Whatever the specific causes, it is rare for voters to not punish the president at the midterm, and historically this has taken very high approval ratings. The exceptions to midterm loss are 1998, after impeachment proceedings against popular Bill Clinton were initiated, and again in 2002, when the even more popular George W. Bush continued to benefit from the 9/11 rally effect, and gains in these years were slight. It has not happened since, and to find another case of midterm gain, one has to go all the way back to Franklin Roosevelt’s first midterm in 1934. This is consistent with voters seeing the president as directing the ship of state, with Congressional voting providing a way to make smaller adjustments to the course. Democrats currently control two of the three branches of government, so it may be natural for some voters to swing Republican in the midterms, particularly given Joe Biden’s approval numbers, which have been hovering in the low-40s.

Elections are not just referenda on the incumbent; the alternative also matters. This may seem obvious in presidential election years, but it is true in midterms as well. Consider that Republican attempts to impeach Bill Clinton may have framed the 1998 election as a choice rather than a “balancing” referendum, contributing to the (slight) Democratic gains in that year. We may see something similar in 2022, encouraged in part by the Supreme Court decision on abortion, among other rulings. Given that the court now is dominated by Republican appointees, some swing voters will want to maintain Democratic control of Congress as a way to check Republicans’ judicial power and future appointments to the courts. The choice in the midterms also may be accentuated by the reemergence of Donald Trump in the wake of the FBI raid of Mar-a-Lago.

Change in party control of Congress is the result of contests in particular districts and states. These may matter less as national forces have increased in importance in recent years, but the choices voters face in those contests still do matter when they go to the polls. In the current election cycle, there has been an increase in the retirements of Democratic incumbents as would be expected in a midterm with a Democratic president, but some of the candidates Republicans are putting up may not be best positioned to win. This is particularly true in the Senate, where candidates and campaigns matter more.