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It’s still about the economy

IThe amount of time, money and energy that will be spent in trying to find out what you and I will do on Election Day 2012 is staggering.  Whether it’s the campaigns, or a host of professional pollsters, they all want to know what issue, perception, worry, or loyalty is going to sway our decision to vote one way or the other.  There are even polls and focus groups that assess the reaction we have to the way the candidates talk, their mannerisms, and how “likable” they are. It’s a multi-million dollar industry and it’s the driving force behind the campaigns, their strategy and their messaging.

 However, it can be argued that none of this really matters.  That’s because overwhelmingly, in

every election since 1972, the outcome of the Presidential contest, almost without fail, can be tied directly to the state of the economy.  Presidents running for reelection in a bad economy, usually with unemployment over 7%, and sluggish growth, have gone down to defeat.  Incumbents running for reelection in a good or improving economy have won reelection with ease.

 Many attribute Gerald Ford’s loss to Jimmy Carter in 1976 to the legacy of Watergate and Ford’s decision to pardon Richard Nixon.  That didn’t help, but the real determinant in that election, an argument Carter used relentlessly, was the poor state of the economy.  Unemployment was at 7.8% in October and rising.  Growth was sluggish.  The Carter campaign even crafted a “misery index” to show the voters the combined effects of inflation, high unemployment and weak growth.

 Four years later, the hostage crisis and foreign policy fumbles, seemed to be President Carter’s biggest problems, but his opponent, Ronald Reagan saw it differently.  While Reagan advocated a more strident anti-communist foreign policy, most of his message in 1980 was about the economy.  He saw free market solutions as the only path to resolve America’s economic woes.   In a sad twist of fate, Jimmy Carter went into that November with unemployment at 7.4%, rampant inflation, and weak economic growth.  Reagan knew the economy was the defining issue for most Americans and even resurrected Carter’s 1976 “Misery Index” to show that things had gotten worse in the prior four years and not better.  Reagan won a decisive victory.  Carter was the first President to lose reelection since 1932.

 It would also be the economy that helped President Reagan win reelection.  Unemployment, in 1984, spent the entire year above 7%, but the difference, which was good for Reagan, was that this statistic started to fall by the end of 1983 and dropped each month after that.  Also, the optimism of the voters was boosted by a robust improvement in GDP.  The 1980’s boom was getting underway and Ronald Reagan won that election in one of the biggest election landslides in history.  His, “It’s morning in America,” campaign spot, considered one of the most effective political ads ever, was all about the improving economy.

 Moving the clock forward to another President, it was the economy, in spite of some remarkable successes in foreign policy that proved his undoing.  In 1991, with the close of the First Gulf War, George H.W. Bush had a popularity rating somewhere above 80%.  He looked unbeatable. But, as 1991 became 1992, the U.S. fell into recession; unemployment rose above 7%, and stayed there.  GDP was down, and as quickly as the President’s popularity had risen, it fell.  And it was all because of economics.  One of the principal advisers to then candidate Bill Clinton posted a sign above his desk which said, simply, “It’s the economy stupid” and it’s a reference almost no one in politics has forgotten since.

 It was also 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 special prosecutors and investigations and even the loss of the Congress to the Republicans in 1994, Clinton easily won reelection.  In 2004 when George W. Bush ran for reelection the economic picture was as rosy as it had been in years.  He easily defeated the Democrat John Kerry.  And four years later in 2008, it was the state of the economy, as characterized by the housing crisis, the banking crisis, rising unemployment and reduced output that defined the campaign.  Though there was no incumbent in the race, Obama deftly laid the fault for our economic woes at the feet of the Republicans.  This highly successful tactic all but undid John McCain’s shot at the White House. 

Unfortunately for President Obama, as he starts his campaign for a second term, some of the very economic statistics that helped elect him are working against him. That’s not to say he can’t get reelected.  History is a guide, not a sentence, and what’s more there is evidence the economy is improving.  The jobless rate fell last week, but it’s going to have to drop a lot further, before the President can claim any success in the management of the domestic economy.  In the meantime, both he and the Republicans know (or if they don’t they should) that it will be the state of the economy in the fall, more than any other issue that will guide the result of this election.

You may reach David Kerr at This email address is being protected from spambots. You need JavaScript enabled to view it.

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