Chicago Booth Review Podcast This 100-year-old pattern explains Trump’s victory
Nov 20, 2024
Lubos Pastor, a Chicago Booth professor focused on the nexus of economics and voting, discusses the surprising patterns behind Trump’s election victory. He argues that voters understood the economy was growing, which actually propelled them to seek change. The conversation reveals a century-old trend: strong economies tend to favor Republican candidates while weak ones favor Democrats. Pastor also highlights how risk attitudes shape voter behavior and contrasts stock market performance under different presidencies, emphasizing its historical complexities.
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Economic Strength and Voting Patterns
- A strong economy favors Republicans in elections, while a weak economy favors Democrats.
- This pattern has held since 1927, regardless of the incumbents.
Risk Aversion and Party Preference
- In a weak economy, risk-averse voters favor Democrats for social redistribution.
- A strong economy emboldens risk-tolerant voters to choose Republicans, who promise lower taxes.
Historical Examples of Election Outcomes
- During major economic crises like the Great Depression and 2008 financial crisis, Democratic presidents were elected.
- Conversely, Republicans like Trump were elected during times of economic strength (2016, 2024).