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Ryan Reynolds here for, I guess, my 100th Mint commercial. No, no, no, no, no, no, no, no, no. I mean, honestly, when I started this, I thought I'd only have to do like four of these. I mean, it's unlimited premium wireless for $15 a month. How are there still people paying two or three times that much? I'm sorry, I shouldn't be victim blaming here. Give it a try at mintmobile.com slash save whenever you're ready. For
$45 upfront payment equivalent to $15 per month. New customers on first three-month plan only. Taxes and fees extra. Speeds lower above 40 gigabytes. See details. Listen, this to me, this is a vibes election, right? We're vibes only. Policy is not a thing we're doing, right?
Hello and welcome to the FiveThirtyEight Politics Podcast. I'm Galen Druk. Last week, we got important news in two key issue areas that might shape how voters are thinking this fall. First, on Wednesday, the latest Consumer Price Index data showed inflation cooling more than expected after a rocky start to the year. Annual inflation cooled to 3.3% and month-to-month inflation was exactly flat. No increase in prices from April to May.
So how might that shape perceptions of the economy? Well, my colleagues at FiveThirtyEight built a model to determine which aspects of the economy people are most sensitive to. And it turns out those indicators have basically flipped between the pre- and post-pandemic eras. We're going to talk about it.
Also, on Thursday, the Supreme Court ruled unanimously to uphold access to the abortion medication Mifepristone by mail. While the ruling wasn't altogether surprising, the unanimity of the decision was. And we're going to talk about what Americans think about that decision and how the issue of abortion is shaping voter behavior in general. Here with me to discuss it all is senior elections analyst Nathaniel Rakich. Welcome to the podcast, Nathaniel.
Good morning, Galen. And also here with us is senior researcher at FiveThirtyEight, Mary Radcliffe. Welcome, Mary. Hi, Galen. Good to be here. So this is your first time on the podcast. I'm very, very excited to have you. And I should say you built the economic sentiment model that we are going to talk about in just a little bit. I sure did. Super cool. But I actually want to start with something a little bit different, which is a quick round of highlights.
hot takedown. And the way this works is I share a hot take on the news and you either affirm or reject it. The topic for today is Hunter Biden's recent felony convictions. So last week, as folks probably heard, President Biden's son Hunter was found guilty on three felony counts for illegally buying a firearm by not disclosing his drug use on a federal form.
This spurred an uptick in the take economy, and I need your help parsing some of these takes. The first take comes courtesy of The Hill, and the title is, GOP Representative, Hunter Biden Conviction Creates an Opening for Michelle Obama. Representative Andy Ogles suggested that Hunter Biden's conviction in the federal gun charges case could create an opening for
Those are two very different takes that like one, this would lead to Joe Biden stepping away from the race and secondarily, Michelle Obama then somehow magically filling that void. But I don't I don't want to put too much of my own opinion on the scale here.
Good or bad take? Michelle Obama is not running for president. Galen, I feel like you can put your finger on the scale all you want. Yeah, it's not changing things. And just for the record, for Democrats who would want this to happen, the data is actually pretty mixed on whether or not Michelle Obama would be a winning candidate against Trump right now. I mean, in recent polling, we've gotten all three results that she would lead Trump, that she would trail Trump and that she would tie Trump. So
I don't know that for people who are mostly thinking about whether or not Biden will win in the fall, just in general, that that's something to hope for, even if it's magical thinking.
I think she would probably be a stronger candidate than Joe Biden, personally, but it's not even worth entertaining. I think there's probably a desire among a lot of Democrats and perhaps a fear among a lot of Republicans that Barack Obama third term would be the best possible thing for Democrats. And of course, Michelle Obama being his wife, that's the closest thing that is constitutionally allowed for that. But just she has made it very clear she has a distaste for politics and she's not interested in this herself. If she was interested, this would have
come up a long time ago. Can we please put this to bed? It's so ridiculous. Stop trying to make fetch happen, people. Exactly. Okay. Take number two from USA Today. Biden tagging Trump a convicted felon muddied by son's conviction.
Obviously, former President Trump was found guilty on 34 felony counts, and the Biden campaign is now running in part on that. He just invested $50 million in battleground states with an ad that talks about Trump as a convicted felon.
Good or bad take? Mary, does this muddle Biden's tagging of Trump a convicted felon? I don't really think so. You know, there was a Reuters Ipsos poll last week where 59 percent of registered voters said that Hunter Biden's legal troubles were not related to his father's service as president. I mean, people are not tying Hunter Biden's issues to Joe Biden in that way. And the people that are are the people that are already going to be voting for Trump.
I'll piggyback on that. There was a poll from Emerson College. Before the convictions, they asked if Hunter Biden is found guilty, if Donald Trump is found guilty, how would this affect your vote, basically? And most people aren't going to have their vote affected either way.
For people who said that it would affect their vote, only 4% of Biden supporters said that Hunter's conviction would kind of shake their or affect their vote. 10% of undecided voters said so. Those numbers are significantly smaller than the 10% of Trump supporters and the 24% of undecided voters who said that Trump's conviction would make a difference. We've already seen in the polls that Trump's conviction has maybe caused a
point of ticking toward Biden in the polls, but it has been a small impact. And according to this Emerson poll, the Hunter Biden conviction is going to be even less impactful. Hunter Biden isn't running for president, right? This is a step removed. And as Mary said, people aren't drawing that connection between Hunter and Joe. All right. And our final hot take for this session of Hot Takedown comes courtesy of NBC News. The headline reads, Hunter Biden's guilty verdict upends a top
Trump talking point. Then sub headline, Trump often accuses Biden of weaponizing the Department of Justice, but a prosecutor working under that very same agency just won a conviction. So in the case of Hunter Biden, is this a good or bad take? Mary? I don't think this is a great take.
Voters are much more likely to see the charges against Trump as politically motivated than they are the charges against Hunter. And I think that really people have been showing that they're pretty capable of separating the two cases. So Reuters, Ipsos, 50 percent say Trump's charges are politically motivated and only 32 percent say the same about Hunter. So I don't think it really upends the talking point for Trump. People still believe that his cases were politically motivated, despite what happened with Hunter.
Yeah, I agree. I think to a lot of Republicans, it's important to note that this is kind of similar to Trump, honestly. This is one small part of Hunter Biden's legal troubles. It's like a little like, you know, it's like he bought a gun while he objected to drugs. This is not related to the whole sketchy foreign business dealings thing, which Republicans care a lot more about. That trial is coming up in the fall, I believe.
I just don't think that a lot of Republicans are going to be convinced that just because they prosecuted this relatively minor crime against Hunter Biden, that means that the justice system is actually impartial after all. This only really would work to upend this like Republican talking point about the justice system being biased if Democrats were willing to make that argument. And I think for the most part, Democrats are just not willing to talk about this at all. Interesting. Yeah. Sort of moving right along. And
To that point, we're going to move right along and talk about the Mifepristone ruling, but first, a break. Today's podcast is brought to you by BetterHelp. This year has been going by quickly. It's already June. So what's something that you want to accomplish this year?
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Last Thursday, the Supreme Court ruled unanimously to uphold access to the abortion medication Mifepristone without an in-person doctor's appointment. Mifepristone was approved by the Food and Drug Administration in 2000, and in 2021, U.S. regulators made it possible to obtain the prescription through the mail.
The plaintiffs here, Alliance for Hippocratic Medicine, argued that the FDA had unlawfully relaxed restrictions on mifepristone and that mailing the medication violated the 1873 Comstock Act.
According to Guttmacher Institute research, mifepristone was used in more than 60% of U.S. abortions this past year. Now, public opinion polls indicate that the majority of voters support maintaining access to the drug, though the unanimous ruling in the first abortion case since the court overturned Roe v. Wade was maybe a little surprising.
So, Mary and Nathaniel, according to a March poll from Axios and Ipsos, 50 percent of adults supported women obtaining the pills needed for a medication abortion through the mail, while 48 percent said that they were opposed. And I think we talked about this poll on the podcast before. But does that poll suggest that this decision by the court, at least its unanimous nature, was more liberal than the nation as a whole's view on this?
Most of the polls that you see on Mythprint Stone are kind of about access to Mythprint Stone in general, as opposed to the specific details of the case, which largely dealt with whether you would need an in-person doctor's appointment.
I don't think that a lot of Americans knew what the case was about specifically and were paying that close attention to it. And I think that what most Americans would have heard if they had ruled the other way would have been Supreme Court issues another anti-abortion decision. And, of course, generally speaking, based on the vibes, right, abortion rights are popular in the U.S.
There was a lot of political downside for Republicans had the court ruled the other way. And I think that the fact that they ruled unanimously to maintain access to Mifpris Stone on these specific grounds that the plaintiffs didn't have standing, it's not that they said that
you know, oh, Mifepristone is good or it should remain accessed. It's basically saying this case, you people don't have standing to complain about this. And that's obviously how they were able to get the very conservative justices like Samuel Alito and Clarence Thomas on board. So this, to me, looked like something that maybe Chief Justice John Roberts, who's kind of known as this consummate politician on the court, maybe tried to steer in a certain direction to avoid a backlash.
Yeah, I agree with that. I think the interpretation here is they didn't unanimously agree to uphold access to Mifepristone by mail. They unanimously agreed to punt. They didn't rule this case on the merits. They ruled it on standing, which means this case or a case like it with different plaintiffs could come back before the court sometime in the future, and then we could see something different happen. It was a decision to delay this decision until a more opportune moment.
Yeah, Mary, part of your job is to comb through basically every single poll that comes out in America. Is that an overstatement? That's about right. No, that's literally part of what you do, right? We limit ourselves to major cities, congressional districts, states, and nationals. Just that. Pretty broad here in terms of the number of polls that you're dealing with.
on any given week. And so you have a lot of insight into how Americans view the issue of abortion and also how it's affecting, potentially affecting their behavior when it comes to the 2024 election. So now we're approaching the two-year mark since the Dobbs decision, the overturning of Roe v. Wade. How
How are Americans thinking about abortion today? And then also, how are they saying it's shaping their voting behavior? Yeah, this is actually something fascinating in the data. So starting back in 2021, when we first started seeing cases from Texas that were challenging Roe v. Wade, limiting abortion to six weeks and so on, at FiveThirtyEight, we started tracking how voters respond to this question that we refer to as the four-point abortion question.
Basically asking whether voters think abortion should be legal in all cases, in some cases, illegal in some cases, or illegal in all cases. So four sort of prongs here.
So we have, you know, almost three years worth of tracking of every poll that asks voters this question. And the really interesting thing is it's basically not moved at all in those three years. All of the things that have happened, the Dobbs decision, the votes in Ohio and Kansas, all of these things, voter opinion is extremely stable on this issue.
We see roughly 60-ish percent say abortion should be legal in all or most cases and roughly 30-ish percent on the other side that it should be illegal in all or most cases. And that's been pretty stable. The question, I think, is whether abortion has really helped to activate voters that benefit Democrats electorally and whether we would see that benefit nationwide or if it's really going to be isolated to the places where abortion is on the ballot directly or indirectly.
We saw that in the 2022 midterms and in the 2023 specials, places where abortion was on the ballot directly or indirectly. So Michigan directly with a constitutional amendment or Pennsylvania indirectly with the governor's race, which would have had a huge impact on abortion rights in the state. We saw Democrats do a lot better in those places than nationally. So I think that this is the question is,
Does this affect voters differently in different places based on local conditions? And I don't know if we have a good answer to that at this point. Well, Nathaniel, what say you? Do we have an answer at this point? I mean, yeah, I think we have, you know, a pretty good body of evidence that the voters are smart enough to understand when abortion rights are actually at stake in a race. And when that happens, it does really activate Democratic voters to turn out.
I think this is a really interesting kind of test case for the most important problem question, right? Which is like when you ask Americans what the most important problem or kind of the biggest factor in their vote is, they tend to say things like the economy and inflation, immigration. And certainly those things, I think,
important to shaping people's worldviews but i do think that there is something that and abortion tends to rank in like the middle of the pack right but i do think there is a certain type of voter who is really activated by abortion who and that is particularly beneficial to democrats and i think you saw that in 2022 where the fact that
most people said the economy and inflation wasn't the most important thing to their vote, didn't necessarily jibe with some of the specific state-by-state results. And I think it is a state-by-state factor. We also got an interesting poll last week from Gallup, which found that the number of people who say they would only vote for a candidate who shares their views on abortion has reached an all-time high at 32%. And that's driven largely by, uh,
voters who identified as pro-choice in Gallup's polling. So I think you're seeing an increase in maybe the overall, the number of people who say that abortion is their most important issue isn't increasing, but for the people for whom abortion is important, it is becoming almost a single issue, like solely driving their vote.
That said, obviously, this is a presidential election. It's not a midterm where turnout is going to be lower. And it's not like the polls aren't accounting for that already, right? This surge of pro-choice voter, that's already baked in. So nobody should be assuming that the polls are wrong right now because they're not factoring these things in because they are. We've also talked about
When you ask people their most important issue, it doesn't always translate to voting behavior. You ask people what's their most important issue and they say the economy, but people mean a lot of different things by that. And it's not really easy or clear to differentiate like what is the difference between Democratic and Republican policies on the economy, the way it's like very clear the difference between Democratic and Republican policies on abortion in general. So whether it ranks the highest and the most important issue
I don't know if that's necessarily the same as ranking the highest in the actual deciding issue.
Yeah, Mary, to exactly that point, when Gallup asks Americans what's the most important issue facing the country, only 4% say abortion. But when KFF asks a slightly different question, which is what is the most important issue for your vote in 2024, the more personal question, 12% of Americans say abortion in that case. And I think that gets at what you're saying about differentiation, which is that
People may feel that whether or not there is access to abortion in 2025 will be determined by this election, whereas Americans don't necessarily feel that whether they'll have a job in 2025 will be determined by whether a Democrat or a Republican wins.
And when it comes to that question of differentiation and sort of closeness to the issue, there will be referenda on ballots across the country this fall. For example, this isn't completely clarified yet, but in Florida, Nevada, Arizona, South Dakota, Colorado, and Maryland.
This has been compared to the 2004 election when conservatives made a push to put referenda on the ballot preserving marriage as between a man and a woman during the same-sex marriage debate. And folks thought that this may have helped turnout amongst evangelicals or amongst religious Americans who wanted to keep marriage.
marriage that way. Is that comparison fair? And do we have evidence that that effort helped in 2004 and could help Democrats in the same way in 2024?
I think it's similar. I think it's analogous. Democrats have said, like, we are putting these measures on the ballot in order to help Joe Biden basically win. That was basically the M.O. for social conservatives in 2004. They were trying to help George W. Bush win by putting same-sex marriage ballot measures on there, thinking that that would drive up, like, evangelical turnout and stuff like that.
The research on that has found that it was not successful in 2004, basically, that this kind of quote-unquote reverse coattails thing is not real. The presidential election obviously is the big game in town, both in 2004 and in 2024. There are not a lot of voters who are going to be voting – kind of turning out specifically to vote on an abortion or same-sex marriage vote.
ballot measure and saying, oh, well, while I'm here, I might as well also vote for president. Especially I think this year, frankly, like the people who are motivated to turn out for an abortion rights ballot measure probably also recognize or to your point, Galen, believe that the presidential race is going to be existential in that regard as well.
To the point that I made a little bit earlier about where Donald Trump is on this issue, he was pretty elusive during the primary. He said he believes that it's the right of states to determine the issue, but then he also attacked blue states for having enacted abortion protections and then also criticized abortion restrictions in states like Florida and Arizona.
Do we have a sense of how voters view Trump on this issue? Do voters know what Trump's position is? I mean, is this is it a tactical decision to be elusive himself? Does he simply not have a position in the absence of having a position? Will Democrats just assign him one? How does this all play out when it comes to the election, Mary?
This is Donald Trump's approach on a lot of different policies, not just abortion. Trump tends to be a politician that just says the thing on his mind at the time. I think his policy stances have been muddled on a lot of issues over the years.
How long has it been? Nine years? And I mean, I think like, listen, this to me, this is a vibes election, right? We're vibes only. Policy is not a thing we're doing, right? I guess that makes our jobs a little bit easier in the sense that we're looking at the polling, which is capturing the vibes. Yeah, exactly. Like, this is all vibes. He's just saying what he needs to do for the vibes of the moment. I don't know.
I don't know that voters have a clear understanding of where Trump stands on very many issues other than building a wall. All right, folks. Well, you heard it here first. Put it on the cover of a magazine. This is a vibes election. Mary Radcliffe. But to that point, exactly. Let's talk about the vibes of the economy, which has been one of the big debates of this cycle so far. But first, a break.
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Last week brought good news about the American economy. Inflation is cooling, and that could help convince the Fed to bring down interest rates sooner. It also fits a trend of months of other good news. Wages are rising, job growth is steady, GDP has grown for 16 consecutive quarters. And yet, as Mary says, the vibes. The vibes remain not so good. Consumer sentiment has not returned to pre-pandemic levels, despite a strong economy on paper.
So are Americans just wrong? Have they not heard the good news? Are they not keeping up with their Bureau of Labor Statistics press releases? Maybe there's another explanation. Perhaps Americans just care about different aspects of the economy than they did before 2020. And Mary, you set out to test this theory by building a model that looks at the economic indicators people are most sensitive to in the pre and post pandemic world.
So I want to dig into the specifics of the model in a second, but just in broad strokes, what did you find? Yeah, so what we were really interested in is how do like the real kitchen table type of household economic factors influence how Americans think about the economy? We were interested in things like housing prices, vehicle prices, this kind of stuff.
And what we found is before the pandemic, those kinds of factors were pretty good at predicting in the statistical sense what consumer sentiment was. We had a model that had a fairly high adjusted R squared for the nerds out there, fit the data pretty well. But post-pandemic, it just completely falls apart. And you don't even really need statistics to see it fall apart. You can just look at the graph and the two lines don't even touch each other.
The issues that were impacting how people felt about the economy in the pre-pandemic era, they simply just don't work the same way anymore. Okay, so what all indicators went into this model that you were able to test?
I want to be clear that this is sort of different from the types of models that economists use to predict like future consumer sentiment. Those have all kinds of bells and whistles. They take into account tons of different factors. We really just wanted to drill down into the ways that Americans actually interact with their money.
So we picked a bunch of indicators, things like household income, wages, housing prices, interest rates, vehicle sales, personal savings, you know, all those things that really have an impact on people's bottom lines. So we pulled out a whole bunch of those. We had 20 odd indicators. And then we let the model select a subset of those that weren't too closely correlated to each other, but were correlated to consumer sentiment overall.
And once we picked those, we just ran a linear regression to sort of tease apart which ones were most impactful on how people felt about the economy from 1987 to 2019. So 32 years. OK, to lay the groundwork here pre-pandemic, what seems to be most predictive of how people will feel about the economy in the pre-pandemic world?
So the most impactful variables we found before the pandemic were vehicle sales, gas prices, interest rate, household income, personal savings, and personal consumption expenditures. So like how much it costs to buy the things you need to live. And basically, this goes the way you would think it goes, which is the more personal savings you have, the better you feel about the economy. The more cars that people are buying, the better people feel about the economy because, hey, they're ready to make a big purchase.
interest rates, for example, did people feel better about the economy as interest rates went up back then because it signified that the economy was like running hot and people were doing well? Yeah, actually, people tended to slightly prefer a higher interest rate pre-pandemic. And part of this is this is going to impact the rates that they're getting on their savings accounts pretty significantly.
So one of the ones that really stuck out, I think, was personal savings rates. Right around 2020, beginning of 2021, personal savings rates were through the roof.
And people felt kind of shit about the economy. Yeah. I mean, this is maybe counterintuitive, but during the pandemic, people had a lot of money. The government kept spending checks. I mean, we all remember the jokes about how you're going to spend your stimmies, right? Like the government spending checks, unemployment benefits are up for people who lost their jobs, all kinds of benefits, child tax credit, kept putting money in people's pockets and they had nowhere to spend it.
I mean, businesses were closed. They couldn't go out to eat. So people had a bunch of money. They couldn't spend it. So the savings rate was through the roof. But there was tons of economic uncertainty.
The spike in the personal savings rate, you see the highest of the value is in April of 2020. But the stock market had crashed in March of 2020 when states and cities started putting out stay-at-home orders. So everyone was just a little like, I don't know, panicky. Everything was topsy-turvy. So even though they had money, they still didn't feel confident about the economy going forward.
And now I think you noted that Americans have some of the lowest levels of savings in history, in recorded history. Yeah. But feel significantly better about the economy. Well, yeah. So they've been starting to feel better in the past couple months. We saw a little bit of a downtick in the preliminary numbers for June. But consumer sentiment has been going up. It's off the lows, as we say. Yeah.
This is a warning sign, I think. The personal savings rate is now the lowest we have seen since the years that immediately preceded the Great Recession in 2008. So we saw very low savings right before the crash in 08. On the data set, that's the only time the personal savings rate has been lower than it is now.
What are some of the other indicators that follow the same path that appear to have, maybe we can get onto this topic, sort of driven off the road, so to speak? Well, I think you're getting at vehicle sales, Galen. Yeah, I mean, vehicle sales is actually really fascinating. So rather than thinking about vehicle sales as like a predictor of economic sentiment, it kind of works the other way around, where people buy cars when they feel good about their finances. Of course,
Correlation is not causation, right? But if I had to guess, I would guess the causation is backwards, that high sentiment leads to high auto sales.
But post-pandemic, there's just a bunch of factors that all work together to make car buying just a lot more expensive. I mean, inflation is part of it, right? Car prices have gone up almost 27% since just before the pandemic, which is a lot. But interest rates have also shot up. So average new car loans are now at 9.7%, and used car loans are at 14.1%. I mean, those are really high interest rates.
So vehicle sales have recovered since like the pandemic lows, but paying off all those loans is much more difficult for consumers. It was before the pandemic and the payment themselves has gone up. So people are buying cars more like because they have to not because they feel good about it.
I'm buying a car and I'm mad about it as opposed to I'm buying a car and I'm going to upgrade that car. And boy, am I going to look sexy driving this brand new car around the neighborhood? Yeah, I mean, compared to 2019, the average monthly payment for a new car is over $200 higher. So, I mean, people aren't happy about paying that much more. Yeah, I should say, Nathaniel, you edited the piece that Mary wrote about this forecast. What stuck out to you in all of this?
Yeah, I think two pieces of this, I think specifically the issue of inflation, right? Inflation is something that has been talked about a lot, a lot, a lot with regard to Joe Biden and kind of dissatisfaction with the economy under him.
I think there is a tendency with a lot of Biden supporters to say, hey, look, inflation is going down. You cited the numbers from last week, Galen. You know, month to month was flat. Things are OK now. But Mary and her co-authors talked to a couple of researchers who kind of conducted a study of their own who found that like cumulative inflation is a thing. And I think that this is probably intuitive to a lot of folks. But like for a long time, people were
not really thinking about inflation at all because they had gotten used to a world where like inflation was just kind of always in the background. I think prices went up like a little bit, but it wasn't enough that you would really notice. And in fact, Mary, correct me if I'm wrong, right, that before the pandemic, inflation was not very correlated with consumer sentiment, right? No, it wasn't a statistically significant indicator. Right. And I think if I can just add some numbers to what you just said,
between 2021 and 2023, combined inflation was 17%. That's the entirety of the increase in prices of the prior decade, right? So one whole decade versus a little under three years.
So, yeah. So in Mary's model, basically inflation wasn't really a factor for something. It just wasn't something that people were thinking about when assessing the economy. But these researchers, they trained a model on the previous time that inflation really was big, which in like the late 70s and early 80s. And they found that
back then, people took a long view of inflation. People were looking at cumulative inflation. And so it's only two data points, right? The current kind of inflation crisis and the stagflation from back in the Carter and Reagan eras. But I think that that suggests that people are taking a longer view of inflation than a lot of certainly Joe Biden supporters would like them to. And I think that that also kind of goes to a broader theme of this analysis, which is that
Yeah, as kind of you mentioned up top, Galen, right? Like a lot of, again, Biden supporters would really like voters to look at the inflation reports and be like, the economy is now doing well. Therefore, I'm going to change my vote or perception of the economy based on that. And that's just not how people...
kind of ingest their views of the economy. They don't listen to the media about it. Like there's a lot of complaint about, oh, we're not covering the economy strength well enough or whatever. But like that, that's kind of immaterial because it is voters are deriving these sentiments from their real world experiences with rising costs, with the, you know, like how difficult it is to buy a car with like housing prices, for example.
It's not that voters are hearing the wrong messages from the media or they are misinterpreting the economic data. They're not looking at the data. They're going based on their personal experiences, and I think that that is something that –
everybody would be well served to remember. Yeah, exactly. I mean, if something before the pandemic used to cost $50 and now it costs $70, it still costs $70 even if inflation goes down, right? It takes people a little while to adjust to the idea that this is now a $70 item.
And if you tell them, hey, don't worry, inflation is down, they're like, yeah, OK, but my widget is still $70. Yeah. In fact, there was a poll last year from Morning Consult, I believe, that showed when you asked Americans in order to address inflation, would you rather your income go up or prices go down? And it was two thirds of Americans said they would rather have prices go down than their income go up.
which is really notable because deflation is really, I mean, as annoying as inflation can be, deflation is actually quite bad structurally for the economy. But Americans said, no, hold the raise. I would rather prices actually go down. Yeah, people really don't like the sticker shock.
You know, there's a lot more we could talk about here. And Mary, we're just gonna have to have you back on to talk about it again. Housing is a huge one. Like, yeah, it's something that doesn't get talked about a lot in politics, especially in what you have termed a policy free election. But that was also a really interesting trend in terms of housing prices going up usually coincides with consumer sentiment going up because people are feeling richer, the economy is growing. That is not the case today.
No. Oh, no. If we look at housing prices today, forget the model, just look at regular old correlation. It is the most highly negatively correlated predictor with consumer sentiment of all the things we looked at. And prior to that, if you look in the pre-pandemic data and just consider correlation, there's no statistically significant correlation, right? So this has gone from like not a thing people cared that much about to like the highest issue in terms of the correlation with consumer sentiment.
And I mean, the housing crisis that we are in now, the housing shortage, the high prices, this has been building for decades. I mean, I really think you can trace the origins of this back to the 2008 crash. People stopped building in the 2008 crash. You can look at the chart of new housing starts, and this just goes to basically nothing right after '08. And that means now we don't have all those houses. So we have this housing shortage.
And then during COVID, a bunch of factors come together to further drive up housing prices. So we have high personal savings. People have all that money. They spend their stimmies on their down payment or whatever. We had super low interest rates at the beginning of the pandemic. And the ability for people to work from home, that meant a lot of people started buying houses and moving around and really overheated the market and drove up prices.
And now, because interest rates are so high, people who are locked into these low 2-3% interest rates, they don't want to sell. So now we have even further shortage. So it's like brick after brick after brick building this wall of high prices on housing, and it's really impacting consumers. Interesting how the world can start to make sense when you dig through the data in a rigorous way, Mary. Yeah, yeah. Data can tell you all kinds of things.
All right, well, we're going to leave things there for today. Thank you so much, Mary and Nathaniel, for joining me today. This has been great. Thank you, Galen. It's a delight. Thanks, Galen.
My name is Galen Druk. Our producers are Shane McKeon and Cameron Chortavian, and our intern is Jayla Everett. You can get in touch by emailing us at podcasts at 538.com. You can also, of course, tweet at us with questions or comments. If you're a fan of the show, leave us a rating or review in the Apple Podcast Store or tell someone about us. Thanks for listening, and we'll see you soon.
