Recent media reports suggest a rising tide of economic populism among presidential candidates and voters. In newspapers’ business sections, personal finance columnists offer advice for avoiding mortgage foreclosure, managing credit card debt and navigating a job search. On the political pages, economic rhetoric aimed at winning over anxious middle-class families forms the core of the presidential campaign messages from many candidates. This paper shows, through data and analysis, that the populist message is rooted in an empirical reality.
Economic insecurity is perhaps best understood as the intersection between “perceived” and “actual” downside risk, which carry nearly equal importance in politics. Americans’ assessments of their personal financial well-being play at least some part in shaping their candidate preferences. And the empirical reality reflected by household financial data should play a critical role for candidates’ and elected officials’ framing of policy options, particularly when faced with the challenge of efficiently targeting scarce public resources. Of course, the relationship between perceived and actual risk is an intimate one, as perceptions are often informed by, and inform, reality.