We’ve had a few rounds about how much praise/blame a Prez gets for the economy under his watch. As a practical matter, from what I can figure out from past elections, the electorate gives the incumbent a pass on the first two years in office, but then begins to judge his performance after that, and makes its decision based on it. The most consistent connection appears to be - no surprise - to the unemployment rate. Graph follows:
http://www.economagic.com/em-cgi/charter.exe/fedstl/unrate+1976+2003+0+0+1+290+545++0
In 1980, unemployment rose sharply in the first half of the year, and Carter lost. Under Reagan, unemployment rose sharply in the first two years, but then fell sharply in the second two years of his first term, and he won. He got the pass on his first two years. Throughout 1987 and 1988 unemployment fell, and Bush I was elected. He was ousted in '92 as unemployment started to rise in the 2nd half of '90 right through to the first half of '92. Even though it then began to fall, the electorate had already made up its mind.
For Clinton, unemployment fell throughout his first term with the exception of a little blip up in the beginning of '95, so he was re-elected. In 2000, after another four years of falling unemployment, Gore was unable to translate a victory in the popular vote to an electoral victory, so whether or not that’s an exception to the rule is up to the reader.
All of which gets us to Bush II. That sharp uptick that started at the beginning of this year and is continuing has got to be a big worry, as we are now in the second two years of his administration. If the past is any guide, he has about a half year more to get the unemployment rate to start down.
Some other illuminating graphs:
1 - Industrial Production: like unemployment, another downdraft is now happening here.
2 - Capacity Utilization: ugly, ugly, ugly. No other way to describe it.
Ok is there a debate to this or is this another “let’s all gather 'round and tell ourselves that Bush will lose next year” thread?
Pantom:
There is no doubt that the public’s sense of the country’s economic well being is a major factor in whether or not a sitting president is re-elected. And there is no doubt that the unemployment rate is one key element in determining what that “sense” is. While you can look at a number of economic indicators to figure out the health of the economy, it’s probably best just to look at the poll numbers for “Is the administration on the right track wrt to the economy” to cut to the chase and take a reading on what the public consesus is.
And there’s a big wildcard in this next election, the first since 9/11. Some combo of how people feel regarding economic security and security from terrorism is probably the best indicator of which party will prevail.
In short, I believe that focusing primarily on the unemployment rate is overly simplisitic. Most people don’t make judgements based on the numbers-- they go by how they feel. That’s a much tougher indicator to guage.
It’s not the numbers that people make their assesment on. They don’t think “unemployment is 6%, gee that’s bad”. Most people are unaware of what the numbers are anyway.
What they can get a sense of is the trend. Whether the unemployment rate is rising, falling or steady. If it’s rising, that sense translates into a fear of losing their job. And that fear affects voting intention.
Whether a fear of terrorism will counterbalance that, remains to be seen.
Focusing on the unemployment rate in assessing Bush’s chances is, I believe, going to be key, because no net new jobs have been created under his watch. Two million have been lost, net, since his inauguration. This is the first time that’s happened since Hoover. Imagine the headlines if we go into the election next year with that being true.