Tuesday Results and the 2022 Economic Outlook

In spite of what listening to the mainstream media might make you think, the voting public doesn't change much from year to year or election to election. As a result, when leaders try to take policy too far in one direction, without enough public support, they often get punished at the polls. That's our takeaway from the Virginia and New Jersey gubernatorial and down-ballot state legislative elections last week.

Here are five key political lessons from Tuesday. First, if former President Trump isn't running, (or in office) it's hard for Democrats to use him as a bogeyman to scare voters. Second, white working class and rural voters will turn out in high numbers without Trump on the ballot and in favor of more conventional GOP candidates.

Third, early signs suggest the GOP continues to make headway with Hispanic voters. One of the counties in New Jersey that shifted the most toward the GOP was Passaic County, with some towns with heavy concentrations of Hispanic voters leading the way. As a result, according to at least one political betting market, Republicans are now favored to win the Senate seats in Arizona and Nevada, even though both seats will have incumbent Democrats running for re-election.

Fourth, Republicans may have won in Virginia this year, but it is still a blue state. Four years ago, when Trump was in office, the Democrats won Virginia by nine points; this year the GOP won by two points. The party that wins by nine and loses by two is still the majority party.

And last, the GOP is in excellent position to win the House next year and probably the Senate, as well. Usually, the Virginia governor's race is a harbinger of which way the mid-terms will go. If Republicans see nationwide gains that are equivalent to the gains they made in Virginia, they'd easily win the House.