Midterms and The Price of Gas

In the fall of 1998, I served as a consultant to the Fox News Channel. My task was to head up the Decision Desk operation for the network's election night broadcast. In preparation, I consulted a number of leading political analysts about mid-term election dynamics.

The general rule is that the party out of power in the White House gains in mid-term balloting. So most everyone I spoke with told me that they expected the Republicans to gain in 1998. But one Republican pollster had a somewhat different take. "Tell me what the price of gas is on the 1st of November," he said, "and I'll tell you whether or not the Republicans gain any seats."

At the time, gas was selling for about $1.10 per gallon in the New York metro area and (a lot) less than that in key districts across the country. Which meant that voters everywhere were buying gas cheap, leaving money left over to buy other products. Which meant high consumer confidence. Which meant high levels of satisfaction with the party in power in the White House. All of which translated into a net gain for the Democrats in the 1998 mid-terms. Even though the President, Bill Clinton, was well on his way to impeachment.

You can track consumer confidence -- almost exactly -- by tracking the price of gas at the pump. Upward spikes in gas prices are followed by slumps in consumer confidence. Falling gas prices result in increased consumer confidence. So it's no surprise that the White House political operation is alarmed by the recent upticks in gasoline prices. The Washington Post has a good story about this today.