Posted on 07/09/2011 6:38:44 AM PDT by SeekAndFind
A recent New York Times story ricocheted around the political community after opening with this revelatory sentence: “No American president since Franklin Delano Roosevelt has won a second term in office when the unemployment rate on Election Day topped 7.2 percent.”
There is the magic number! If unemployment is higher than 7.2% as we head into the general election in 2012, we know President Obama is a goner. If it is lower, Obama gets an encore term. Can it really be this simple?
First, note the necessary qualifier, “since FDR.” That is because Roosevelt was reelected to the White House in 1936 despite estimated unemployment at about 17%, but that was down several percentage points from Herbert Hoover’s Waterloo in 1932. Again in 1940, Roosevelt won a third term with unemployment at 15%. Maybe these data are too outdated to matter, but they certainly suggest it may be the trend of unemployment that makes the difference. Is the rate going up or down? Are people optimistic or pessimistic about their economic future?
FDR gave people hope. Of course, President Obama famously ran on “hope and change” in 2008, and his problem in 2012 is that, so far on the economy, Americans have little hope and haven’t seen much change. If the nation remains as glum as it is today, and if the current 9.1% unemployment rate fails to drop significantly, Obama may well get the boot in ’12 as long as Republicans nominate a mainstream candidate.
But our point is this: No way is 7.2% the magic number. Take a look at Chart 1, which shows the unemployment rate at the time of each presidential election since 1960. Generally, a relatively high unemployment rate is predictive of the incumbent party’s defeat. This happened in 1960, 1976, 1980, 1992 and 2008 (on the chart, green represents elections where the incumbent president’s party won the election; orange represents elections where the incumbent party lost).
Source: U.S. Bureau of Labor Statistics
That isn’t the whole story, however. Unemployment was at 7.2% in 1984 when Ronald Reagan ran for reelection, and he won a landslide. Why? Because unemployment was falling noticeably from its recession high of 10.8% in December 1982.
George H.W. Bush lost his presidency in 1992 with an unemployment rate scarcely different from Reagan’s in 1984. Why? Because the rate had accelerated from the 5.3% when Bush was first elected. Ronald Reagan’s 1980 debate line resonated anew in 1992, to the detriment of his chosen GOP successor: “Are you better off today than you were four years ago?”
And look at the flip side of the employment coin. If unemployment were the alpha and the omega of presidential politics, then the Democrats would have won landslides in 1968 and 2000. Instead, Hubert Humphrey and Al Gore lost (the latter, one admits, on a technical knockout). HHH had as strong an employment picture as a candidate could hope to see; the nation was at almost full employment (3.4% unemployment). But the Vietnam War dominated the election, and produced the Nixon presidency. In 2000, ethics and personality arguably counted for as much as the Democrats’ low 3.9% unemployment rate, getting George W. Bush within striking range.
It’s now clear that unemployment is an imperfect forecasting tool for presidential elections. What about overall economic growth, usually represented by the gain or loss in Gross Domestic Product (GDP)? Let’s go to Chart 2.
Note: Green represents elections where the incumbent president’s party won the election; orange represents elections where the incumbent party lost.
Source: U.S. Department of Commerce Bureau of Economic Analysis
We might have chosen to focus on GDP growth in the election year taken as a whole, but that average can hide the real trend during the most critical election months. So here, we’ll look just at the quarter closest to the actual election day: the third quarter, July 1 to September 30, which gets reported before people vote and almost always is used by one side or the other on the campaign trail to describe the shape of the economy.
GDP growth in the third quarter is actually a better indicator than unemployment of forthcoming election results. The three worst years for growth jump off the chart: 1960 (2.1%), 2000 (2.8%), and 2008 (a miserable 0.4%). In this trio of years, the incumbent White House party lost the presidency.
However, even the GDP measure is far from a slam-dunk predictor. Near 7% growth in 1968 couldn’t negate Vietnam as an election factor. Watergate and the Nixon pardon, as much as anything else, sunk Gerald Ford in 1976, despite a healthy 7.6% GDP gain in the third quarter. And look at Jimmy Carter in 1980: An 8.6% growth rate — the best on the chart — couldn’t save a president stuck in the malaise of high inflation, high interest rates and an insoluble Iranian hostage crisis.
Similarly, a solid 6% growth rate was unable to rescue Bush Sr.; the economy had been too sluggish for too long, and Bush didn’t appear to “get it.” Bill Clinton actually had a lower economic growth rate in 1996 for his successful reelection (4.8%) than Bush had in his losing race (6.1%). The difference? Perceptions of the economy were better. Voters felt the modest growth surge and believed America had finally turned the corner.
Whether voters are looking at unemployment or growth rates, they are asking themselves whether conditions are improving (meaning the incumbent party is reelected) or stagnating and worsening (incumbent party is defeated).
Even that common sense model is oversimplified. If a big scandal or an unpopular war takes center stage, the economy can take a back seat. It is not always the economy, stupid.
If you insist on looking at just one number for an incumbent president seeking reelection, it is probably best to choose presidential popularity — the answer to the question, “Do you approve or disapprove of the job President X is doing?” This is a marvelous summary statistic, because it forces voters to take all the issues of the day into account, projecting their own issue priorities onto the president. When reliable polls show the proportion approving of presidential job performance is 50% or above, the incumbent is highly likely to win. The further the number falls below 50%, the less likely the incumbent is to get his second term.
Note: The most recent Gallup polling before the presidential election was used. Green represents elections where the incumbent president’s party won the election; orange represents elections where the incumbent party lost.
Source: Gallup Presidential Job Approval Center
Notice that presidential approval cannot always be transferred to the non-incumbent candidate of the president’s party. Dwight Eisenhower had a very healthy job approval before the 1960 election (58%), but his candidate, Richard Nixon, lost. Bill Clinton was at 57% right before the 2000 election, but that wasn’t enough to get Al Gore into the White House. Ronald Reagan’s role in delivering his third term to the senior Bush in 1988 was extraordinary, not the norm. More often, the converse is true: unpopular incumbents insure the defeat of their party’s nominees: Harry Truman in 1952, LBJ in 1968 and George W. Bush in 2008.
Finally, let’s remember that third-party candidates can add to the unpredictability of allegedly predictive numbers. While the available research doesn’t fully support the conclusion, it is at least possible that George H.W. Bush would have won a second term without the presence of Ross Perot on the November 1992 ballot. And Ralph Nader may have received just 2.7% of the vote in 2000, but it was enough to deprive Gore of both New Hampshire and Florida, either of which would have given the Democrat the presidency. For 2012, one could conjure up a multi-candidate field — say, including an independent Tea Party contender or a Green party nominee — that could produce an odd outcome.
So data crunchers, continue your search for the magic number. We do it ourselves. These analyses are always fun and sometimes enlightening. But to a degree, this is a search for El Dorado, the mythical city of gold that tantalized — and ultimately frustrated — European explorers in the sixteenth century. Maybe it’s truly there, but nobody ever found it.
The biggest part of UE claims will have expired by election time. The unemployed will still be there just not counted (unlike the Million Man March where shadows and hidden spots were counted just to be sure).
“Obama may well get the boot in ’12 as long as Republicans nominate a mainstream candidate.”
Anybody else catch the implicit threat not to nominate Sara Palin?
Of course, I said nobody named Hussein would ever be elected president, so what do I know?
Idiots!
This is not a horse race.
This is not a numbers game.
Candidates must be right on the ISSUES.
Forget about who’s AHEAD or BEHIND, rather concentrate on their positions.
An articulate CONSERVATIVE with PRINCIPLES will win every time he (or SHE!) gets the nomination.
Too bad we try it only once in a lifetime.
Under the Clinton regime the way the unemployment rate was calculated was re-figured to artificially drive the number down.
So when he compares FDR's unemployment rate to Obama’s he is comparing two different methodologies. Using the unemployment rate methodology of the FDR era, Obama unemployment rate is actually around 18%
“Sarah”
The economy would have to be going like a post-WWII or mid-80’s rocket from now to election day to get unemployment down to 7.2. Only Obama’s czars believe that it can or will perform so.
To be more specific:
USA Has To Create 250K Jobs A Month For 66 Months To Return To December 2007 Unemployment By End Of Obama’s Second Term
See here :
Good luck with a second term.
Bingo - and sorry to say, it won't matter if the advertised rate is 9% or 12%, there's still enough racist idiots out there to give Obama a fighting chance - we need to be very careful this election cycle to ensure we have a good candidate who isn't afraid to tell it like it is and then come out and refute any lies that get spoken during debates. If you don't show how bad your opponent lied, then the lies are accepted as facts by far too many.
I believe Palin would be willing to do both - tell the raw truth and expose the lies without regard to what the more "politic/polite" so-called conservatives might advise.
If this is too complicated here’s the Cliff Note version:
The number that matters is: ZERO. Anyone but Zero!
Most people listened to FDR and got their News from a even more controlled Media than today.
He convinced the electorate that Wall Street caused the depression.
Which in reality was not even true. The people could buy and sell stocks with the ease of Fannie and Freddie with little money down and only a fraction of the cost of the stock. Shoe Shine boys were playing the market with more money than they could make in their lifetime.
The Economics of that year should the economy contracting yet the markets were setting highs. Remember we had the Federal Reserve at that time. While the rest of the world was coming out of the depression we went into a Great Depression.
RE: Using the unemployment rate methodology of the FDR era, Obama unemployment rate is actually around 18%
A horrible thought just crossed my mind when you mentioned FDR... HE WAS REELECTED 3 TIMES ! This inspite of the double digit unemployment rate and the Great Depression !!
Is Obama the next FDR? (God Forbid).
Also the author’s bias as evidenced by “Gore lost by a technical knock-out.” Yeah, the Constitution and the Electoral College are nothing but a “TKO.”
The Republican nominees running against FDR were as socialist as he was.
One of them actually wrote a book called “One World” (We have it) in which he says Stalinist Russia was a great place to live, and everyone loved Stalin....
FDR had a huge Dem machine that all fell in line right down to the smallest town. He coerced and bought votes across the land. All of his New Deal agencies put money into states and cities where they could most effectively buy re-election votes; no money flowed to areas that were lost causes.
Obama blew his trillion-dollar vote-buying stash way too soon. Nobody will remember it at election time. Heck, it didn't even work for November 2010.
“A consensus of unbiased media experts agree that the discrepancy was inadvertent and slight and would have had little effect on the close reelection of Barack Obama.”
Very, very interesting; thanks for this Post. But, I sure find it hard to believe that in Nov. of 2008, George W.’s approval rating was only 25%. I guess my memory fails me.
The way unemployment is calcualted has changed so it no longer includes ‘marginally attached people’ so the real rate is probably near 15% or 18% today. I always thinks it’s funny when anyone compares todays unemployment rate to historical numbers from back before they changed the calcualtion.
Question: Is it the actual published number for unemployment that affects peoples voting choice? Or is it the general perception/hopelessness people have about finding a full time job?
If its the former, I’m sure the number can be tweaked lower right before the election by using some tricks and he will win.
If its the latter, what effect will never expiring unemployment benefits, mortgage bailouts, snap cards, free cell phones and other goverment handouts do to affect the voters decision?
To me, this is the biggest factor that totally seperates this recession from all others in the history of the world.
During the first depression, people were sleeping on the ground and praying for a soup line so they would not starve to death.
Compare this with today. You lose your job and you get a perpetual check from the goverment. Sure, you have to cut down to basic cable, change cell phone plans and eat out twice a week instead of 6 days a week, but does that suffering compare with the first depression? I don’t think so and when it comes time to vote, many people will vote for more handouts.
WE ARE ON THE PRECIPICE, THIS ELECTION IS OUR LAST STAND!
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