That 70s show: Behold the return of the Misery Index -- and the red wave

AP Photo/Barry Thumma, File

A day may come when we break all bonds of economic déjà vu and 70s acid flashbacks in the Biden era, and I agree with Allahpundit’s exhortation to stop using this front-page image at Hot Air.

But it is not this day.

Today’s a day for even more nostalgia. Bloomberg welcomes us back to the Misery Index, that conglomeration of inflation and Federal Reserve interest rates that sunk Jimmy Carter’s re-election bid in 1980. We haven’t hit Carteresque levels in the new metric, but it’s bad enough for Bloomberg to predict a House gain of up to 40 seats for the GOP in November:

Whatever else is on Americans’ minds — and that’s a long list right now — the state of the economy looms large in any US election. That spells big trouble for Democrats in November’s midterm vote.

A new study by Bloomberg Economics takes one gauge with a knack of predicting ballot outcomes — the misery index, calculated by adding up the inflation and unemployment rates — and projects it forward through election day.

The result: Based on past voting patterns, President Joe Biden’s party can expect to lose 30 to 40 seats in the House and a few in the Senate too, easily wiping out razor-thin Democratic majorities.

That looks like the midterm equivalent of the 1980 election. Most remarkable is the assumption that the GOP can gain seats in this cycle, given that Republicans are not just defending ten more seats but also defending open seats previously held by retirees. Bloomberg’s misery index calculations do not take into account candidate selection, but it suggests that candidate issues may not be as critical as they were in 2010 and 2012, either.

The Bloomberg team does its hedge its bets a bit:

Of course, economics is only one part of the calculation that voters make. Democrats will be hoping that anger over abortion and gun laws and the Jan. 6, 2021 attack on the US Capitol by a right-wing mob will energize their supporters.

Granted, but this is a matter of priority. Progressives and the media thought that they had decoupled economics from politics after Watergate, too, and that turned out to be very wrong indeed. The post-Watergate era narrative was supposed to be one of rising progressivism tempered by blue-dog Democrat leadership in which Cold War realities would be wished away and America would spend the next several generations contemplating its own navel.

Instead, when inflation and interest rates combined for a Misery Index in the twenties, all that got tossed out the door. To the extent that other issues mattered, those were energy costs and domestic production, along with a feckless foreign policy that produced a humiliation at the hands of Iran and Russian military expansionism. That sounds rather familiar in this presidency as well; at least Carter didn’t cut and run from Afghanistan the way Biden did, however.

Those parallels are particularly strong in this midterm cycle, even stronger than they were in Carter’s midterms, when Democrats lost three Senate seats and 15 House seats to the GOP. In 1980, the GOP not only won the presidency but another 12 seats in the Senate and 34 in the House. The difference in outcomes is a measure of how far Carter had fallen in public estimation between those two election cycles — so badly that voters put Republicans back in charge just six years after Watergate.

The current analyses of this cycle are based on the assumptions of midterms in relatively calm economic times — 2010, 2014, and 2018. Those comparison bases are likely insufficient to see what’s coming in November. Pundits and analysts have largely missed these differences in political context in a Misery Index era. When push comes to shove, Americans vote for economic stability and predictability, not ethics and certainly not voting for incompetence over strength just to punish past deeds.

In that sense, the numbers cited by Bloomberg may look relatively modest, but they’re not. Unlike in 1978 and 1980, the GOP is starting from near-parity.  A gain of forty seats for the GOP would put them over 260, a high-water mark for the modern party. A gain of even a single Senate seat would hand control back to Republicans.

And that’s just the way it looks at the beginning of August. By November, the Misery Index will only get higher, and with it the odds of Democrats holding onto any control at all.