Megan McArdle discusses it here. And this came in last night from a historian I know:
I think you are on to something about prosperity/World War II.
WW2 created a false prosperity (with all the unemployed or formerly unemployed in the Army). The real prosperity comes after the war, after the GOP Congress basically allows the the economy to finally fix itself. The results weren’t always pretty (primarily inflation and housing shortages), but as with Harding, things ran their course fairly quickly–unfortunately not before the Congress got it in the neck for not doing all the politically proper things that would have prolonged both their own rule–and a bad economy.
BTW, even a year before the 1948 election, Congress’ approval (22%) was even worse than Truman’s. That’s one reason Truman felt safe to go after them hammer-and-tongs. Robert Taft was not exactly “The Great Communicator”–and, in any case, the GOP’s hold on Congress had resulted from a very depressed turnout in 1946.
Even with Dewey so heavily favored in 1948, there was heavy speculation the GOP would lose one or both houses of Congress (they lost both). That would have been very unusual back then for the vote to go one one way for Congress and the other for the President (never happened until 1956), yet nobody quite picked up on what that really meant for Dewey.
Update: From a reader in the financial press:
Let’s not underestimate the astonishing effect of most of the rest of the industrialized world being bombed out – leaving us standing strong. That *might* have had something to do with our years of prosperity. Even fairly early on in the war.
This sometimes gets spun as WW2 being the mother of all New Deals– and that’s both fair and, after a point, fairly ridiculous. Sure we ramped up spending. But DEMAND for US goods went up – and stayed up.
The lens of government is made from fun house mirror glass – it makes everything around it look a lot smaller.