Politics & Policy

Another Reelection Economy

Bush will join a line of presidents who rode good times back to the Oval Office.

President Bush should win reelection handily if history is any guide.

In the post-World War II era, nine other presidents have asked voters to return them to office. Of these, six won voter approval (Truman, Eisenhower, Johnson, Nixon, Reagan, and Clinton), and three were kicked out (Ford, Carter, and Papa Bush).

The six victors had at least this much in common: They were all reelected during times of economic growth and when inflation and unemployment were relatively low. With only one exception, no president in the modern era has been turned out of office during economic expansion.

The exception was Gerald Ford. At the time he sought election (as opposed to reelection, having assumed the presidency following Richard Nixon’s resignation), gross domestic product was growing, and the rates of inflation and unemployment were on the decline. Yet voters turned thumbs down on Ford, largely on concern about his competence and in response to his unpopular pardoning of Nixon. Still, the election was close: Ford and Carter split the popular vote 48 to 50 percent.

Only one incumbent’s defeat, Jimmy Carter’s, can rightly be attributed to a poor economy. When the 1980 election was held, the country was just exiting a brief recession. Worse, though, consumer price inflation had reached 14.6 percent, and the jobless rate had hit 7.8 percent. That’s not to mention the public’s frustration with gasoline lines and the seemingly endless hostage crisis in Iran.

Voters, not surprisingly, jumped at the chance of implementing the supply-side policies advocated by Ronald Reagan. He won 51 percent of the popular vote to Carter’s 41 percent.

In 1992, George H. W. Bush — Reagan’s political heir — also lost his reelection bid. While the nine-month recession of 1990-91 had raised voter concerns, it’s certain that other factors were in play — notably, the third-party candidacy of Ross Perot and Bush’s own abandonment of his “read my lips” no-new-taxes pledge.

Bill Clinton secured 43 percent of the popular vote to Bush’s 37 percent, with third-party challenger Ross Perot capturing 19 percent. All in all, the sizeable Perot vote handed Clinton the victory.

Democrats are hoping now that 2004 will be a repeat of the election of 1992. But a review of the historical record suggests that the closest parallels to next year’s ballot are Richard Nixon’s reelection in 1972, when he trounced ultraliberal George McGovern, and Reagan’s impressive win over another unabashed liberal, Walter Mondale, in 1984.

On both occasions, the country was newly emerged from a recession, and confidence in the economy was growing.

Though Nixon used harmful short-term fixes, unemployment was on the decline and inflation was under control in 1972. Nixon’s reelection was made easier by the fact that the Democrats had nominated a left-winger as their standard-bearer. Nixon won by a landslide 61 to 38 percent.

The election of 1984 was, in effect, a referendum on supply-side economics, and voters gave it an unmistakable stamp of approval. Once the Federal Reserve had wrung inflation out of the system and Reagan’s 5-10-10 tax cuts came into full effect, the economy surged, with GDP rising 8.5 percent year-on-year in the first quarter of 1984. By election time, unemployment was down to 7.2 percent from a high of 10.8 percent in 1982, and inflation had fallen to a bearable 4.2 percent from the 11.8 percent rate Reagan inherited from Carter.

The Gipper won a resounding victory with 59 percent of the popular vote to Mondale’s 41 percent.

As for the remaining presidents in the good-economy six, timing was almost everything.

Truman beat Thomas Dewey in 1948 by 50 to 45 percent. Ironically, economic activity peaked around election time. By December, the economy started into a nearly year-long slump.

Two-termer Dwight Eisenhower weathered two economic contractions, but his reelection bid of 1956 fell in the middle of a three-year economic expansion. He easily beat Adlai Stevenson, winning the popular vote by 58 to 42 percent.

Lyndon Johnson, who assumed the presidency after John F. Kennedy’s assassination in November 1963, beat Barry Goldwater a year later. To make matters worse, Goldwater was stupidly against the President Kennedy’s tax cuts.

Finally, the strong, technology-driven economy of the 1990s gave Clinton’s 1996 reelection effort a major boost. He garnered 49 percent of the vote to Robert Dole’s 41 percent and Perot’s 8 percent.

As the current economic and stock market revival continues to vote for Bush, it seems near certain that he will win in a landslide. Huge progress in the war against terrorism will add to his totals, with the GOP picking up 3 to 4 seats in the Senate and 10 to 12 in the House.

And Bush will make it seven out of ten presidents since the end of WWII who rode a good economy back to the Oval Office.

— Larry Kudlow, NRO’s Economics Editor, is CEO of Kudlow & Co. and host with Jim Cramer of CNBC’s Kudlow & Cramer. William P. Kucewicz is editor of GeoInvestor.com and a former editorial board member of the Wall Street Journal.

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