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         September 19, 2004

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   Are Some Red States Blue About Jobs?

*By DANIEL ALTMAN*

HOW big of an issue will the economy be on Election Day? Pollsters have 
been saying that it's a top concern for undecided voters. That makes 
sense, given that people with strong feelings about foreign policy, 
civil rights or the candidates' personalities have probably made up 
their minds already. But could differences in economic performance among 
the states actually determine how the election shakes out?

The answer is a definite maybe. Traditionally, economists have doubted 
that a president or his party can dictate the overall path of the 
economy. "Most economists assume that the major person who can affect 
the business cycles in the economy is Alan Greenspan," said Ray C. Fair, 
an economics professor at Yale who has studied economic trends and 
elections for decades.

But things may be different at the state level. Economists and political 
scientists say that some presidential policies can have a direct and 
predictable impact on state economies, at least in the short term.

"In some ways you can actually do more at the local level," said Alan J. 
Auerbach, director of the Burch Center for Tax Policy and Public Finance 
at the University of California. "An example would be the steel tariffs. 
They probably had a negligible impact on the economy as a whole, but 
they certainly had an impact on the particular steel mills affected by 
the tariffs."

Voters sure seem to think that the White House can make a difference. A 
look at recent polls and the electoral map suggests that people may hold 
the president responsible for their states' economic fate.

Though his recent campaign speeches have focused on terrorism and the 
war in Iraq, the president must know that the economy is important to 
voters. After all, the economy was the issue that thwarted his father's 
re-election bid, and, according to recent polls like the IssuesPA/Pew 
survey in Pennsylvania last month, it is also the chief concern of 
undecided voters this time.

As a result, the economy could be the determining factor in the 
election. So how have the 13 swing states, as classified by The New York 
Times 
<http://www.nytimes.com/redirect/marketwatch/redirect.ctx?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=NYT>, 
using poll analysis and projections, fared under President Bush? Not 
very well. The average increase in the unemployment rate in the swing 
states was 1.2 percentage points from January 2001 to August 2004. That 
performance was worse than the averages for states that are expected to 
back the president and those likely to support Senator John Kerry. 
States that are expected to vote Republican, according to The Times's 
handicapping, had an increase of 0.8 percentage points in their 
unemployment rate, while Democrat-leaning states had an average increase 
of 0.9 percentage points.

SO, will those swing states reject the president because of the economy? 
Looking at unemployment rates may be only the first step toward an 
answer. According to some political scientists, the relationship between 
the economy and the casting of electoral votes could involve a complex 
combination of local and national forces.

Daron R. Shaw, an associate professor of government at the University of 
Texas at Austin, said voters were most likely to be influenced by an 
issue when it had surfaced at the national level and begun to resonate 
locally. He cited jobs moving abroad as the most recent example on the 
economic front.

"The notion of outsourcing - people say, 'I've seen that,' " Professor 
Shaw said. A feeling that the president has done little to deal with 
outsourcing abroad, he argued, may have loosened Republicans' hold on 
some states that they won in 2000. "The people who were most at risk 
over the last four years also tend to be the sorts of cultural 
conservatives - blue-collar Democrats - that flipped West Virginia and 
helped Bush carry Ohio last time,'' he said. "It's the particular nature 
of unemployment in this last cycle that has brought them into play."

The unemployment data raise another question, however: Did the White 
House reward states for voting Republican in 2000? Among all the red 
states from the last election, the average increase in unemployment has 
been 0.8 percentage points. In the blue states, it has been 1.1 
percentage points.

The difference is not large, regardless of the Bush administration's 
efforts or intentions. "The best they've been able to do is play defense 
and knock the edge off some of the problems those states have 
encountered due to national economic forces," Professor Shaw said.

Still, in a state of five million workers, like Michigan, that 
difference could amount to 15,000 jobs - and votes.

Professor Auerbach pointed out that the government had some scope for 
funneling spending projects to chosen states. But he said he doubted 
that the White House could have controlled enough of those allotments to 
turn the election. "I'm not willing to give George Bush or Karl Rove 
enough credit for having the capacity to do this," he said, referring to 
the president's chief political strategist.

But a reward is not the only possible explanation for the red states' 
superior performance. Voters in those states might have chosen George W. 
Bush exactly because they expected to reap some material benefits from 
his administration. Indeed, Professor Auerbach said, some of those 
voters might have been right: "States with a big military presence are 
likely to be more pro-Republican, and certainly defense contractors must 
have done well under Bush."

The relationship may even amount to a self-fulfilling prophecy: people 
vote for a candidate because they believe they will do well under his 
administration, and then, presto, he enacts policies that serve their 
interests. But even this kind of analysis, incorporating Professor 
Shaw's theory about resonant issues, may miss one more layer of 
complexity. For many voters, the economic situations in their home 
states may not be the major factor in their decisions.

"People who think they're hurting, but the country's doing well - those 
people vote for the incumbent," Professor Shaw said. Voters who work in 
one state but live in another may present a further challenge, Professor 
Fair added. "It could be that the other state is as important to them as 
the state they actually reside and vote in," he said.

With just six weeks left before the election, there may be little that 
the president and his party can do with the economy to affect the 
results. Professor Auerbach says voters tend to be most influenced by 
their economic experience, up to but not including the quarter just 
before the election.

And in any case, it may be too late to attract votes by using an 
economic surge as a lure. During the administration of George H. W. 
Bush, economic indicators took a turn for the better just before the 
election in 1992 - and he still lost. "Things were finally starting to 
pick up at the very end," Professor Auerbach recalled, "but I don't 
think it helped him."

Professor Auerbach also warned against a last-minute spending or 
tax-cutting spree aimed at attracting votes. "Anything that the 
president would propose in the last two months before an election would 
amount to pandering," he said, "and that just isn't good fiscal policy."

THAT does not mean politicians won't try. "You'd expect that the federal 
government would be quite generous to Florida now, in the hurricane 
cleanup," Professor Fair said. "Would they be less generous to Florida 
if it wasn't a swing state? Who knows?"

If the White House does swamp Florida with dollars, the president will 
most likely say that the gesture came out of the goodness of his heart. 
Even if he can't win points for an economic windfall so late in the 
game, perhaps it's not too late to burnish his character.