Credit: Lance Hayashida
Handicapping the Election: An Interview with Erik Snowberg
Erik Snowberg—a Caltech professor of economics and political science who is an expert on the relationship between economics and politics—has more than an academic interest in politics: he was an intern for the House Committee on Science in 1998, worked for Ted Kennedy from 1998 to 1999 on immigration issues, and then ran for Cambridge City Council in 1999 when he was an undergraduate at MIT. Despite a record student voter turnout, he lost. After getting bachelor's degrees in mathematics and physics, he went off to Stanford to study economic policy, receiving a PhD in business in 2008, the year he joined the Caltech faculty.
With the election just about a month away, Snowberg recently answered a few questions about the presidential election and what we can expect on November 6.
The economy seems to be the major focus of the presidential election this year. How do you see it playing out?
It is not a stretch to say that economics is the issue in every presidential campaign. Certainly in my lifetime, economics seems to have determined every election, with the exception of Bush versus Gore in 2000. While the economy was turning down then, we were still coming off a very long period of growth, and the economic models said that Gore should have won.
Now, we are in this middle ground where even though the overall level of the economy is awful, the economy has slowly been getting better over the past year. So the economic models we use to try to predict election outcomes based on economic fundamentals say we can't predict who is going to win.
You have studied people's perceptions of the economy and how that is affected by their economic situation. From that perspective, do you have any insights into this election?
I showed that people's perceptions of unemployment were largely grounded in their own experience. So, you can talk all you like about the economy, but that is not really going to change many people's minds; you can say that the economy is really doing great, but people who have many unemployed friends or family members are not going to feel that way. Or, you can say that the economy is doing terribly, but people who just got a big bonus are generally not going to feel that way. So, we are in this place where issues other than the economy might matter, such as the candidates' character.
With the election in the homestretch, there has been a tremendous amount of attention on the candidates' performances in the debates. Can debate performances decide elections?
Very rarely. Generally it has been the case that following a debate, the challenger gains on average two percentage points in the polls, which is not usually enough to be decisive. So it is difficult to tell if debates affect much of anything. The only recent time where a debate might have decisively influenced an election was in 1980 when Carter and Reagan debated about a week before the election. In that debate, Reagan famously asked voters, "Are you better off than you were four years ago?" The economy actually had not been doing too badly until Carter brought in Paul Volcker as chairman of the Federal Reserve in 1979. Inflation was fairly out of control at that point, and Volker clamped down on it, which damaged economic growth. So the economy had a downturn in Carter's last six months in office, and Carter paid the price.
In early October, the latest jobs numbers showed that unemployment has dropped below eight percent. While Obama has been claiming that the economy is getting better, Romney has argued that with his business background, he would be doing a much better job steering the economy. How do you see voters responding?
I don't have any particular reason to believe that people would think that a businessman would have any particular expertise in managing the economy. You could equally turn that around and ask, "Why isn't Obama assured of reelection because he is the only one running who has experience managing the entire economy?" It is not clear to me why voters would perceive it one way or another. Romney was in a type of business where the emphasis was not on creating jobs. It was on creating value for shareholders. If people are concerned about job growth, the guy who has a lot of experience making sure that capital gets a better return on investment is not necessarily going to be the guy they are going to choose for president.
Who do you think is going to win?
If I had to put money on it, I'd put money on Obama, based on the improvement in the economy. I have to say, Romney's performance in the first debate was amazing. But in general, surveys find that he has extremely low likeability ratings—lower than any challenger in a long time.