- Published on Tuesday, 12 June 2012 23:09
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During any campaign for the White House there is a staggering amount of money, time, and energy spent trying to find out what you and I are thinking and what we will do on Election Day.
They all want to know what issue, worry, or loyalty is going to sway our decision. However, it can be argued, that election 2012 is over before it begins. Since 1924, and arguably, even before that, the state of the economy, gross domestic product, unemployment, and inflation, have been a near absolute determinant in the outcome of an election.
No incumbent has won reelection without favorable economic winds at his back. It’s as simple as that. There are no exceptions. That’s not what a struggling incumbent wants to hear, but almost 90 years of data, going back to Calvin Coolidge, is hard to challenge.
For example, many equate Gerald Ford’s loss in 1976 to his decision to pardon Richard Nixon. That didn’t help, but the real determinant in that election, an argument his opponent Jimmy Carter used relentlessly, was the economy. The Democrats even crafted a chart, using unemployment, growth and inflation statistics, to create a “misery index.”
Four years later, the hostage crisis and foreign policy fumbles seemed to be President Carter’s biggest problems. But Ronald Reagan saw it differently. In an odd twist of fate, Reagan used the same chart Carter had used four years earlier to show that the nation’s economy had only gotten worse.
In 1984, when it came President Reagan’s turn to seek reelection, unemployment spent the entire year above 7%. But the difference was that it was falling month by month. GDP was up sharply, and inflation, the scourge of the 1970’s was down. Ronald Reagan won that election in one of the biggest election landslides in history.
Moving the clock forward to another President, the economy, in spite of some remarkable successes in foreign policy, proved his undoing. In 1991, with the close of the first Gulf War, George Bush was riding a wave of popularity. But, as 1991 became 1992, the U.S. fell into recession. Unemployment crept above 7% and stayed there. GDP, while improving by 1992, still wasn’t robust enough to help President Bush win reelection.
In the term that followed, it was once again the economy, in this case growing and with low unemployment, that kept a scandal-worn Bill Clinton in office when he came up for reelection in 1996. In spite of investigations and the loss of the Congress to the Republicans in 1994, Clinton was reelected.
When George W. Bush won re-election in 2004, the economic picture was as rosy as it had been in years. Some claim it was the “security” election. Perhaps, but if the economy had been sour, the outcome might have been different.
In 2008, it was the state of the economy, as characterized by the housing crisis, the banking crisis, rising unemployment and reduced output, which candidate Barack Obama so deftly laid at the feet of the Republicans. John McCain wasn’t the incumbent, but as far as the Obama campaign was concerned, he might as well have been.
Unfortunately for President Obama, as he starts his campaign for a second term, the very economic statistics that helped elect him are working against him. That’s not to say he can’t get reelected. Just because everyone from Calvin Coolidge to George W. Bush got a second term only when the economy was in good shape, doesn’t mean that he somehow can’t buck the trend.
But from this economist’s view, it’s hard to see how that’s going to happen.