That’s the question that seasoned political analyst Frank Sesno led with during his ISPA web seminar Nov. 14. The correspondent, anchor and former CNN Washington Bureau Chief is known for his insightful analysis of American politics and news media.
“What happened to the red wave?” Sesno asked. “The pollsters, the pundits and the polls, did they get it wrong again? My immediate response to that is . . . people matter, voters matter. They bring more complexity and nuance to the polls than a lot of the punditry often suggests, that’s probably one of the lessons out of this experience.”
So instead of the wave, the midterms were a “status quo” election, when the in-party holds on to power, according to Sesno. This typically happens during times of crisis when voters decide to keep the current party in place, rather than make changes. Sesno pointed toward current crisis-like circumstances such as the lingering effects of the Covid-19 pandemic, financial pressures and inflation, as well as the overturning of Roe v. Wade, which mobilized voters.
“This is very unusual,” Sesno said. “The last status quo election was right after 911 in 2002, when George W. Bush was president; there was a whole rally around the flag, rally around the president, rally around the party experience right after that.”
Even more important than “What happened?” — now what impact will the midterm results have on the economy and business?
“First thing we can look for is no real likelihood of any major spending bills,” Sesno said, conjecturing that the Republicans will win the House. “Republicans are going to put their foot on the brake wherever they can on anything that the federal government spends.
“So there won’t be any sweeping budget cuts, the way there might have been if the Democrats had majorities in both chambers,” he continued. “But we’re not going to have any spending increases, the kind of thing that Bernie Sanders and Joe Biden might like to do. We’ll have political stalemate.”
Typically, during a recession, there are stimulus funds, with higher unemployment and a push to get people spending money and back to work. “That will be much harder this time,” Sesno said. “Because the Republicans — with their foot on the spending break, concerned as they are over growing deficits — will be very mindful of that.”
Finally, regulation. “There will be tougher oversight of the regulators,” Sesno said. “A GOP house will give federal regulators more scrutiny, more hearings, more questioning, more pressure in a number of areas, whether it’s climate, fiscal regulation, trade, those kinds of things.”
What were voters’ attitudes and concerns during this election? Seventy-three percent, nearly three quarters of the country, said they are dissatisfied with the direction of the country. “Right now, this is a dissatisfied, angry, divided electorate, and the economy is top of mind for everybody,” he said. “The top issues as they were seen in the exit polls: inflation, abortion, crime, gun policy, immigration in that order.”
Further, the top message from this election is “go fix it,” Sesno said. “Fix the economy, fix inflation. Get us through this turbulent time; we’re really worried about it,” he said. “You’ve seen in your business a downturn in recent years. I bought a new mattress by the way, during the Covid years, and I’m sleeping on it now. But I’m not buying another one.
“So these waves come and go. ISPA is projecting some better times in ’23 and ’24 as people get a better sense of their disposable income and inflation subsides per the economic forecasts. If that happens, I think we’ll see some of these attitudes that I just mentioned change.”
Finally, perhaps the most important question: What should the bedding industry and individual member companies keep an eye on as they prepare a legislative strategy for 2023, as well make everyday business decisions.
The first place to look is the Federal Reserve. “What’s happening with interest rates? Where are mortgages going? Where does credit card debt go? Generally, this is really going to drive a huge number of things,” Sesno said. “Do the Feds continue to raise interest rates to the point that they push us into a recession? Is it a mild recession? Is it a deep recession? If we go into a deeper recession and it takes the economy longer to recover, your projections are going to need to be changed.”
Further, be aware of what housing is doing. “People live in the now and they’re trying to pay their bills today,” Sesno said. “They’re trying to figure out what’s going to happen with their 401K and what things they need to buy today. The big downturn in housing, because of mortgage rates, has blown up people’s plans for buying, and it’s a big thing for your industry. You don’t build houses, you don’t move someplace, you don’t buy a mattress, you don’t buy bedding, you don’t buy furniture, that’s a big deal.”
In sum, the midterm elections are a lens on the presidential election looming on the near horizon. “So much of this is about looking forward to 2024,” Sesno said. “And we’re going to talk about these elections for the moment. What does it mean for now, what are people saying, what does it mean for policy. But in so many ways, this is just a telescope to 2024, because that’s where the battle lines have been drawn.”