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Consumption Theory and Why Any GOP Candidate, Including J.D. Vance, Would Have Won the 2024 Election: Comment and Update to the Original Paper of 2016 (“Economics and How Obama Could Have Lost the 2016 Election Too”)

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  • Wu, Cheng

Abstract

Consumption theory and its optimization mechanism may be applied to the U.S. presidential elections. Based on Clower’s Dual-Decision Hypothesis (DDH), Wu (2017) derived the result showing change in savings is a function of labor income growth. Under DDH, consumers make optimal decision based on a set of data, including labor income. Later, if they were to realize that these assumptions, specifically labor income growth were lower, further optimization is done with proper adjustments. Thus, we have a feedback optimization every four years, which may affect the “consumption” of a presidential election. Current U.S. presidential electoral system is biased towards farm voters. Most “red” states and battleground states have substantial number of voters related to farm business. As farm income fell, it should not be a surprise that Hillary Clinton lost in 2016, Biden won in 2020 and Kamala Harris lost in 2024. In other words, Trump was beneficiary of farm income decline prior to the years 2016 and 2024 but not in 2020. To extend the original paper of 2016, “Economics and How Obama Could Have Lost the 2016 Election Too.” A chart with farm income all the way back to Kennedy in 1959 was added. During these 17 presidential elections and 65 years of income data, only Johnson in 1964 and Clinton II in 1996 failed the farm income hypothesis. There may be secondary variables, such as Kennedy’s assassination, Covid, weather, bird/swine virus, wars, inflation/interest rate, immigration, crime, stock prices and so on, to consider in any model. Still, under the current U.S. electoral system and consumption theory, it is not surprising that only one variable, farm income, holds basically the key to any presidential election success.

Suggested Citation

  • Wu, Cheng, 2024. "Consumption Theory and Why Any GOP Candidate, Including J.D. Vance, Would Have Won the 2024 Election: Comment and Update to the Original Paper of 2016 (“Economics and How Obama Could Have Lost the 201," MPRA Paper 122718, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:122718
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    References listed on IDEAS

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    1. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-987, December.
    2. Wu, Cheng, 2016. "Economics and How Obama Could Have Lost the 2016 Election Too," MPRA Paper 75107, University Library of Munich, Germany.
    3. Wu, Cheng, 2017. "Does Clower’s Dual-Decision Hypothesis lead to the change in saving conclusion in Keynes’s General Theory?," MPRA Paper 82120, University Library of Munich, Germany.
    4. Flavin, Marjorie A, 1981. "The Adjustment of Consumption to Changing Expectations about Future Income," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 974-1009, October.
    5. Cheng K. WU, 2017. "Does Clower’s Dual-Decision Hypothesis lead to the change in saving conclusion in Keynes’s General Theory?," Journal of Economics Library, KSP Journals, vol. 4(4), pages 552-560, December.
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    Keywords

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    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • A19 - General Economics and Teaching - - General Economics - - - Other
    • C0 - Mathematical and Quantitative Methods - - General
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H0 - Public Economics - - General
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R19 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Other
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

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