The Great Recession was five times more impactful on voting behavior during the 2008 presidential election than rising unemployment, a traditional indicator of electoral success, a new study released by Columbia Business School.
The study examined data from the 2008 election given the historic swing in mortgage availability between 2004 through 2008. The new study, called Mortgage Market Credit Conditions and US Presidential Elections, revealed that swing state outcomes in the presidential race would have been very different had the housing crisis not happened.
The study was authored by Professor Charles Calomiris with Alexis Antoniades of Georgetown University. They found that when it comes to the availability of mortgage credit, voters punish incumbents in tough economic times, but don't always reward them in good ones.
According to the study, half of the votes needed to reverse the election's outcome in nine crucial swing states would have gone to Sen. John McCain if not for the contraction in mortgage credit between 2004 and 2008. In Florida, Ohio, and Indiana, eliminating the credit crisis as an issue would have delivered almost enough to shift these states' electoral votes from then-Sen. Barack Obama to McCain. Meanwhile, North Carolina and its 23 electoral votes would have flipped for McCain.
"We all know that Americans vote with their wallets,” Calomiris said. “When times are tough, incumbents are punished at the ballot box, and when America's economy is thriving, those in the White House are often rewarded. This new research shows us that when it comes to mortgage markets, that's not necessarily the case. Instead, if voters are able to purchase a home, they're likely to credit themselves for their personal achievement, while blaming incumbents for tougher times. That means that if you're a candidate for the White House, don't expect to see a bump at the polls even if mortgage credit is flowing freely. But if a bubble bursts, expect to pay the price."