The Election: It's The Food-Stamps, Stupid!

Tyler Durden's picture

In November 2008, President Barack Obama won the popular election for President by 9.5 million votes.  A burgeoning financial crisis and weakening economy helped his candidacy at the time, but four years on the sluggish pace of economic recovery is a headwind to his re-election.  Consider, for example, that there are currently 12.8 million people unemployed in the U.S., or that an estimated 8 million adults entered the SNAP (Food Stamp) program since November 2008 (total increase in enrollment: 15.6 million).  Presidential elections are won in the Electoral College, of course, so in today’s note ConvergEx's Nick Colas parses out this employment/food security economic stress for the key “Battleground” states.


Statewide data for unemployment and food stamps show that the jobless rate has increased in all but 3 states since the 2008 election cycle, and that every single state plus DC has experienced a gain in the number of residents receiving nutritional assistance from the federal government.  Seven of the 8 swing states this election year are more economically stressed than the national average in terms of unemployment and/or food stamps, while 2 of the 3 states “leaning” toward Obama are worse off than the national average.  Romney, behind in the electoral vote count by most analysts’ figures, theoretically stands to gain from a weak national economy, but he’ll have to earn the vote of an estimated 4 million Americans in 14 key battleground states to have a shot at the White House.

Nick Colas, ConvergEX: It's Jobs And Food Stamps, Stupid

Note from Nick:  I know three things about the upcoming U.S. Presidential election.

  • One: it will be close, likely decided by a few million votes in a handful of battleground states.
  • Two: the debate between incumbent and challenger will come back to the current state of the domestic economy from the current “Big ideas” smokescreen.
  • Three: many Americans, even after three years of economic “Recovery,” face fundamental questions over employment and food security.  Beth puts it all together in today’s note.

Are you better off now than you were 4 years ago?  The answer is likely dependent on whether or not you’ve got a job.  On average, real personal incomes are up 2.1% in the last 4 years, which is good news for those who are employed.  But for the incremental 3.4 million people who have lost their job in the last 4 years, well, this isn’t exactly relevant.


Ronald Reagan famously asked this same question during his enormously successful presidential campaign against Jimmy Carter in 1980.  The economy had endured a recession earlier that year, so for many voters the answer was a resounding “No”.  The 2012 election cycle is similar, though the magnitude of the Great Recession is decidedly greater.  Which naturally leads to the question: Are enough people worse off now than 4 years ago to allow Mitt Romney to capitalize on a weak economy in Reagan-esque fashion?


We’re not here to make election predictions or candidate endorsements – you’ll be flooded with enough of these in the coming weeks.  Our election analysis focuses on 2 state-by-state indicators of economic stress: unemployment and food stamp recipient count.  We’ve written repeatedly on these topics over the past few years and have a good handle on what makes these numbers “Tick.”


State unemployment rates are on average 24.2% higher now than they were during the 2008 election cycle.  In the table following the text, we show state-by-state unemployment rates for the 4 months leading up to and including the presidential election, as well as jobless rates for the past 4 months.  Our “election cycle” unemployment rate is simply an average of October and November 2008, and the current rates are based on July 2012, which is the most recent month for which data is available.  The biggest gainer is Utah, where the jobless rate is currently 6.0%, or 73.9% higher than its election cycle 2008 rate of 3.5%.  Only 4 states have lower unemployment rates now versus then: North Dakota (-13.0%), Massachusetts (-2.4%), Vermont (-1.0%) and interestingly enough, Michigan (-6.7%).  We can thank the auto bailout for that, along with the uptick in light vehicle demand since the cyclical lows in 2008/9.


Meanwhile, every single state saw an increase in the number of residents receiving food stamps over the past 4 years, with an average gain of 68.2%.  Also in the accompanying table, we show the number of people per state who received nutritional assistance from the federal government in 2008 and May 2012 (the most recent month for which data is available).  The number of food stamp recipients more than doubled in 4 states, led by Nevada at +146.2%.  Louisiana (+12.6%) and North Dakota (+20.6%) experienced by far the smallest rises.


Now in terms of the November election, the economic plight of certain states simply doesn’t matter in terms of predicting the outcome.  Their collective minds are made up; they’re voting either for President Obama or Governor Romney, and there’s not much either candidate can do to change the fact.  So those states aren’t highlighted in our comprehensive table following the text.  The states shaded in gray are pure swing states, according to yours truly and more importantly also according to most election analysts.  The Blue states are leaning toward a Barack Obama reelection, though Romney has a chance.  Similarly, the red states are favoring Romney, but Obama has hope.  We’ve displayed these 14 “battleground” states in a separate chart to outline which election-critical states are more economically stressed than the overall nation in terms of the 2 factors described above (unemployment and food stamp recipients).


Four battleground states are weaker than the nation in terms of both joblessness and food stamps: Colorado, Nevada, New Mexico and Wisconsin.  Unfortunately for Romney, none are a “catch” since they all have a relatively low number of electoral votes, and one (New Mexico) is already leaning toward Obama.  Three states are actually better off than the nation as a whole on both accounts: Michigan, Missouri and Ohio.  It’s therefore unlikely these states will be motivated purely by economic reasons to vote for Romney.  And two of them – Michigan and Ohio – benefited substantially from the auto bailouts of 2009, an economic outcome that candidate Romney has sharply criticized.


The remaining 7 states are worse off than the rest of the nation in terms of either unemployment or food stamps (but not both).  For example, Florida’s jobless rate is actually lower now (7.6%) than in November 2008 (7.8%), but the state saw the second-highest gain in the number of its residents receiving food stamps.  The labor market gets a ton of press, but signs of economic stress appear in more ways than unemployment.  So these 7 states still represent substantial opportunities to appeal to voters under economic duress.


By our calculus of economic stress, therefore, Florida is the most important battleground state on the list, should Romney choose to capitalize on a weak economy the way Reagan did.  It comes with 29 electoral votes, and while its unemployment rate is up “only” 15.8% from 4 years ago, the number of Floridians receiving food stamps grew a whopping 132.6% during that same time.  According to Real Clear Politics ( Romney is a near lock for 191 electoral votes, compared with the 237 votes already reserved for Obama.  Either candidate will need 270 votes to win the election, so Romney’s got to find 79 more to seal a victory.  The 23 states leaning “red” carry 36 electoral votes, so assuming Romney is able to secure those votes, he needs to earn 43 votes from the 8 true swing states.  Without Florida, he’d have to win Ohio, Virginia, Wisconsin AND one of the following: Colorado, Iowa, Nevada or New Hampshire.


However, one critical issue is worth noting.  Even though many people are receiving food stamps, unemployment benefits and other government transfer payments because of a weak economy, are they likely to vote for a candidate in favor of reducing such benefits?  Does the risk of receiving less government aid offset the risk that the economy doesn’t improve substantially?  We can’t answer these questions, but this could prove to be an important point as the election heats up.


Again, our goal isn’t to make predictions or recommendations.  It’s to highlight the economic stress level of key battleground states, and should Romney want to make an appeal to votes a la Ronald Reagan, then Florida, Wisconsin, Ohio and Virginia are good places to start


One last point, of a more general nature: we believe that the polling in this contest will tighten up this week and throughout the rest of the campaign.  It will, in our view, come down to the question of economic confidence because – as we have shown here – the state of the country on this count is far from robust.

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Lohn Jocke's picture

Print more corn!

NotApplicable's picture

First thought: who f'n cares?

Second thought: Bush proved that the "Anybody but" strategy does not sufficiently motivate the base.

Final thought: Beer-thirty fast approaches (and just maybe, RAIN??!!?).

Jay Gould Esq.'s picture

"Food security."

I am unfamiliar with this term -- one which, it would have been assumed, would have been applied, decades ago, to any one of those chronically impoverished "Third World" dictatorships in Sub-Saharan Africa or Southeast Asia.

Alas, how the worm has turned. Apathy, running hand-in-hand years upon years of accumulated credit-inspired ready comfort, does indeed have a price, and a very dear one at that: absolute, aggregated dependency.

nmewn's picture

The term "food security" and its cousin "food insecurity" are the latest in a long line of assaults on the subconscious of the public.

It basically means, have you ever been hungry in the last month and wondered where or what you were going to eat...and whether you should supersize it.

spastic_colon's picture

a friend of mine said "we dont have the soup lines like in the depression" I said, "SNAP cards are the new soup line"

nmewn's picture

Slave masters and butchers prefer the docile.

FEDbuster's picture

Can you even imagine millions of EBT cardholders queing up in line each day to get their FEMA rations?  I just think of the disaster in Atlanta with the applications for Section 8 housing.

FMR Bankster's picture

This election is all about the "Bradley effect". Obama avoided it with a positive campaign in 2008 but you will see it with a vengence this year. We have a history in this country of african american candidates who go negative recieving far less votes than they poll. The "Bradley effect" is of course a factor only with Democrats and a limited number of independents. Republicans have no problem telling pollsters they won't vote for statist liberals regardless of race.

Rubbish's picture

Obama gives me free food, Romney gives me death spiral financing....decisions decisions

Bicycle Repairman's picture

The main economic question is "Given that this is a depression, who is more likely to provide my daily bread, if I get sucked into the vortex?"  The answer is clearly Obama.  Now a Republicrat might respond, "But I'll get you a job."  Nobody believes that.  And double for Romney and Ryan.

midtowng's picture

First of all, I agree. Is this an economics site or a conservative political site?

Secondly, Obama was president in November 2008. Or December, or most of January 2009. So do we want to make an honest comparison or push a partisan agenda?

greyghost's picture

only a matter of time until twiddle dee and twiddle dumb go on the stump and tell some "safe" crowd about how unemployment insurance is killing the economy. really, some where some how some twit from the campaign will think this is 1812 with no cell/smart phones and tell a loving slobbering crowd how evil those collecting unemployment check really really are.

greyghost's picture

note to self......these guys are not ronald reagan. not even in the ball park.

Totentänzerlied's picture

That would be career suicide for any politician in the last 30 years. Politicians DO NOT question the welfare-warfare state.

Bicycle Repairman's picture

In late October when R&R realize that all is lost, they will question the welfare state.  Then the rout will be on.  An easily beatable Obama will hand the GOP (and the two most dis-likable candidates ever teamed) their worst defeat since Alf Landon.

tyrone's picture

I don't think so. In fact, IMO you could not be any further from what is actually going to happen. The lack of jobs issue will wildly overwhelm food stamps. EVERY SINGLE TIME.

Bicycle Repairman's picture

You're assuming that R&R can convince people that they will create jobs. Given Romney's track record of destroying jobs, that's a stretch. Right now R&R are perceived as champions of austerity.  That's not good for job growth at least.

On the other side of the coin, true conservatives and fans of Ron Paul know Romney is not a real Republican.  He is a fraud.

This is a recipe for a good old fashioned wipe-out.

Bananamerican's picture


Shitt "Romney likes to say he won't "apologize" for his success in business. But what he never says is "thank you" – to the American people – for the federal bailout of Bain & Company that made so much of his outsize wealth possible.

According to the candidate's mythology, Romney took leave of his duties at the private equity firm Bain Capital in 1990 and rode in on a white horse to lead a swift restructuring of Bain & Company, preventing the collapse of the consulting firm where his career began. When The Boston Globe reported on the rescue at the time of his Senate run against Ted Kennedy, campaign aides spun Romney as the wizard behind a "long-shot miracle," bragging that he had "saved bank depositors all over the country $30 million when he saved Bain & Company."

In fact, government documents on the bailout obtained by Rolling Stone show that the legend crafted by Romney is basically a lie. The federal records, obtained under the Freedom of Information Act, reveal that Romney's initial rescue attempt at Bain & Company was actually a disaster – leaving the firm so financially strapped that it had "no value as a going concern." Even worse, the federal bailout ultimately engineered by Romney screwed the FDIC – the bank insurance system backed by taxpayers – out of at least $10 million. And in an added insult, Romney rewarded top executives at Bain with hefty bonuses at the very moment that he was demanding his handout from the feds.

With his selection of Paul Ryan as his running mate, Romney has made fiscal stewardship the centerpiece of his campaign. A banner at declared, "We have a moral responsibility not to spend more than we take in." Romney also opposed the federal bailout for Detroit automakers, famously arguing that the industry should be forced into bankruptcy. Government bailouts, he insists, are "the wrong way to go."

But the FDIC documents on the Bain deal – which were heavily redacted by the firm prior to release – show that as a wealthy businessman, Romney was willing to go to extremes to secure a federal bailout to serve his own interests. He had a lot at stake, both financially and politically. Had Bain & Company collapsed, insiders say, it would have dealt a grave setback to Bain Capital, where Romney went on to build a personal fortune valued at as much as $250 million. It would also have short-circuited his political career before it began, tagging Romney as a failed businessman unable to rescue his own firm."


Read more:

Romney is a shithole who believes that God lives on a planet named KOLOB!

No, he's not a "Kenyan"....

he's an amerikan

Check out the red arrows on this post (if any) and know that Wall Streeters and their drooling partisan enablers lurk among us.

RP 2012

Larry Dallas's picture

Matt Tiaibi also has to eat and knows that the majority of Rolling Stone readers are younger Ron Paul fans. He preaches well to his choirs. Just like the article on the squid.

There is always an agenda lurking behind the scenes. Always.

Bicycle Repairman's picture

Yeah, there's an agenda, but there's also the FACTS.  BTW Romney's "business model" wouldn't work without preferential tax treatment.

blueridgeviews's picture

Another wordy paragraph with no facts. Save your keyboard and stop typing.

Larry Dallas's picture

Right. The same reason you read ZeroHedge is because its not profligated on the MSM and its no BS. You both just put your foot in your mouth a la Kathie Lee Gifford.




foodstampbarry's picture

Food stamp barry is goin' down bitchez!

Bananamerican's picture

"Heal us, Mitt.....Heal amerika" (//sarc/)

Vet4RonPaul's picture

Sorry Gorog, Ron Paul didn't win because we now have more people in America that want Socialism over Liberty.  They are the local, state, federal employees, teachers, contractors, cops, etc. that keep the white collar welfare machine humming.  They far outumber the poor welfare queens and they take far more money, all the while acting like they serve society.  They're fucking hypocrits.

Bananamerican's picture

yup. I've "not voted" for either pre-selected shill before.... but I've never done a write in...

I'm literally going to write his name on the ballot, check it and drop it in the box....for what it's worth

Henry Hub's picture


Ron Paul didn't win because the oligarchs (the Koch brothers etc.) that own and control this country as well as the Republican party didn't want him to win. Witness the brutal suppression of the Ron Paul supporters at the Republican convention. If this wasn't an expression of the Fascist mindset of these billionaire scumbags, i don't know what is. Stay tuned because this is what they plain to bring to all America.

dolly madison's picture

I'm not gonna vote for either of them, but foodstampbarry, you are wrong.  Obama is not going down.  It is R&R that are going down. 

fonzannoon's picture

12.8 mil unemployed. That sounds tiny. They should have a "sucking wind" number. There are 100 million people sucking wind. Now that's a number.

Daily Bail's picture

Jon Corzine Complains To Judge Today That MF Global Trustee Actions Are Hurting His Defense, Louis Freeh Nods In Agreement

Louis Freeh is fighting for the entrenched and engorged banking status quo, where legitimizing the theft of hundreds of millions by Jamie Dimon is just another part of the fucking job.

knukles's picture

Corzine complaining about his defense?


He hasn't been charged with anything to defend!!!



malikai's picture

Are you better off now than you were 4 years ago?  The answer is likely dependent on whether or not you’ve got a job.  On average, real personal incomes are up 2.1% in the last 4 years, which is good news for those who are employed.

Wrong. Factor in inflation, and you're down, hard! But I guess not as hard as the unemployed.

lotsoffun's picture

i think jamie and lloyd answered yes.  and at 35 million- that brings the average up a bit.

Tippoo Sultan's picture

Doing God's work does not come cheap, my friend.

dolly madison's picture

All the people who were in real estate for a living in 2008 and are doing something different now, think they are much better off now.  It was a blood bath in real estate in 2008.

boiltherich's picture

Malikai, I posted this chart/link in another argument this morning but I think it is more appropriate here because it deals directly with the sad state of wages and employment as well as record corporate profits:

Wages as a share of GDP =

Corporate profits =

Corporations and the elite investor class that own and benefit from them are better off than they were 4 years ago and that is why they pushed Romney into the nomination for the GOP, they want to keep it that way. 

People, as an aggregate, are in the worst financial position they have been in since the Great Depression, and while they know Obama likely will not improve matters much they also know Romney will at least make things better for corporations and worse for people.

The claim that Romney would be good for business and thus good for people that need jobs is where the problem lay.  In fact business has never been more profitable yet business is not hiring and those still employed are not keeping up with all the unreported inflation. 

Last, here is a cartoon I think sums it up pretty well:

Occupy Marines at Fbook, great website


boiltherich's picture

Gina Rinehart, world's richest woman.  Her fortune grew by more than 19 billion in 2011, this kind of concentration of wealth will kill whole economies, she is not a job creator, she is a job destroyer.  Look at the graphic linked above, that is a wealth increase of $52 million a day.  Two bucks shy of 600 per second every single second of the year.  Can people just not understand that when a single individual takes that much money out of an economy the economy dies?  You think they are "investing" that money in productive activities that help the poor and middle class?  It goes into the financial sector never to be seen again, and if you all think that stocks and debt markets create jobs then why hasn't all those trillions the Fed has plunged into markets done anything to help the people of Main Street?  Now, multiply that bitch above by about 40,000 individuals and about 75,000 global corporation and you get so many trillions sucked out of the economic equations that it is a wonder anyone still has employment.

Wealth equality will be leveled.  It is not if but when.  One day people will be so bad off that they will finally pick up arms and go after the rich, I would prefer a political solution now rather than a violent one later, but I know that will not happen as long as people like Romney can get the GOP nomination.  Still, it will happen eventually.

ChacoFunFact's picture

Rich men can live easy under any government, be it ever so tyrannical. They come in for a great share of the tyranny, because they are the ministers of tyrants, and always engross the places of honor and profit, while the greater part of the common people are led by the nose, and played about by these very men, for the destruction of themselves and their class. Be wise, be virtuous, and catch the precious moment as it passes, to refuse this newfangled federal government, and extricate yourselves and posterity from tyranny, oppression, aristocratical or monarchical government. . . .


-A Farmer and Planter, The Federalist Papers

Tippoo Sultan's picture

To which number "Federalist" is this excerpt attributed ? It appears counter to federalist principle.

Totentänzerlied's picture

That's from the ANTIFederalist Papers, #26.

Just before the part you excerpted:

"[...] if you should, at any time, think you are imposed upon by Congress and your great Lords and Masters, and refuse or delay to pay your taxes, or do anything that they shall think proper to order you to do, they can, and I have not a doubt but they will, send the militia of Pennsylvania, Boston, or any other state or place, to cut your throats, ravage and destroy your plantations, drive away your cattle and horses, abuse your wives, kill your infants, and ravish your daughters, and live in free quarters, until you get into a good humor, and pay all that they may think proper to ask of you, and you become good and faithful servants and slaves.(1) Such things have been done, and I have no doubt will be done again, if you consent to the adoption of this new Federal Government"

My, how little has changed in these 222 years. Yes, by 1788 people already knew what was in store for this country should the Federalists prevail; meanwhile most who are even aware seem to think our national problems go back what, 4? 10? 20? 30? 40? years. The Federalists prevailed and the rest, bitchez, is history.

boiltherich's picture

Rich men can live easily under any government because rich men are the government everywhere they exist.  They bitch and whine that they have to pay 10% of their income and zero on their accumulated wealth and warn you that it is you who are destroying the "job creators."  It takes a set of brass balls to snivel about paying 10% of your income to the government in taxes when you got 98% of your millions or billions from that same entity. 

And then there are the poor fucktards that defend them, you work minimum wage and your kid is on Medicaid and you get food stamps but you DEFEND these rich pricks that laugh at you.  They almost deserve the wealth they cheat the rest of us for if for no other reason than the rest of us are too stupid to add one and one. 

If life is going to continue on this planet beyond the next 50 years a lot will have to change, one of them will be that the richest people will not have more than ten times the wealth or income than the poorest people.  And when you stop to think about that it is fair, if by brains, hard work and ethics you have ten times the income and wealth (security) of your neighbor then by comparison you are still rich.  But, when some fat witch in Australia makes 52 million bucks per day without brains, ethics, hard work, and that is more than the poorest 100 million people on this planet and then she has the gall to say the rest of you should drink less and work harder (for me) that is when I say the class war is ON BITCHEZ!



    OH lookie, one of the fucktard defenders of the rich have already given me a red arrow, nice work Nazi.

Jlmadyson's picture

Haha this market got smacked by Lockhart and Plosser before and after hours today.

Moody's Spain Credit Rating remains on review for possible downgrade.

blunderdog's picture

That's after three years of recovery, too.  Whew,  Imagine if things had gotten WORSE.


Brazillionaire's picture

The funniest thing (in a twisted kind of way) about the stimulus bill was its name: The American Recovery and Reinvestment Act.

I suppose if you voted against it, you were against "recovery". I really don't think George Orwell could have imagined this.

Börjesson's picture

SNAP, is that one of those clever acronyms, sort of like SNAFU?

Situation Normal: Abject Poverty