Thomas Ferguson: Electoral results show huge disparity in voting patterns based on income

I want to direct you to a post at the Institute for Public Accuracy that features political economy commentator Tom Ferguson because his analysis of exit polls is interesting. What he has picked up on is that the big divide in the 2012 vote was on income-based voting. Tom says:

“Now look at the exit poll in today’s New York Times. Yes, indeed, Obama did very well among women, Latinos, and African-Americans. But in sharp contrast to 2008, the partisan split along income lines is huge. Obama’s vote percentage declines in straight line fashion as income rises. He got 63 percent of the votes of Americans making less than $30,000 and 57 percent of those making between $30,000 and $50,000. Above $50,000, the Other America kicks in. Romney won 53 percent of the votes of Americans making between $50 and a $100 thousand and 54 percent of the votes of Americans making above $100,000. The Democrats’ poor showing in the House elections — they way under-performed for a party that had lost so many seats two years before — probably reflects a substantial Republican advantage in money, including the famous Superpacs, some of which poured resources into Congressional races. It was surely also affected by the White House’s reluctance to spend time and resources trying to elect Democratic House candidates. As the President negotiates for a Grand Bargain in the face of the Fiscal Cliff, these are realities that are worth pondering.”

I don’t know what implication Tom believes this electoral skew will have on the Fiscal Cliff discussions, but my view is that political inertia favours Republicans’ continued adherence to the deficit hawk position. As I have been saying for a while now about the euro zone, policy makers are loathe to abandon positions they have staked out which they believe they can defend and that resonate with their voting base. We have seen this with Germany’s response to the euro zone crisis. The same applies in the US. The Republican party has already staked out the deficit hawk position and they are not likely to give ground on it, in my view. A Grand Bargain that sees deficit reduction via social security and medicare cuts is likely. But let’s see what happens.

One friend who follows these issues told me privately that he believes this an historic election, mostly for the income-based voting gap. He said he believes that the political and economic elite have been able to align lower and middle class whites with them electorally despite espousing a platform of redistribution to the top – lower capital gains taxes, lower income tax tiers, deregulation, and so on. They have accomplished this by focusing on social issues that resonate with those groups. His view is that “if this had been a squeaker maybe one couldn’t draw conclusions.” But the Obama victory was so large, especially on income-based voting, that we may see a change in the Republican party in political positioning. As I said regarding the Fiscal Cliff, I am sceptical that this would occur decisively and quickly but I did want to put it out there.

I’ll leave you with these parting thoughts from my friend:

The demographics and trends in cultural change will just keep tipping the electorate toward the new coalition. Their positions are as deep seated as the social conservatives. Obama and the Dems did this with the considerable headwind of eight percent unemployment.

What this means to me is that the coalition of the top one percent and the social conservatives that would go with them even though it hurt them economically is now in relative decline. The Koch brothers no longer have a sufficient bloc of fools they can manipulate to achieve their ends. They had on their side Citizens United. They had eight percent unemployment…

One can criticize Obama for being too much of a compromiser, which I think he is. But it took a very clever and effective politician to pull it off. 

About 

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.