• Location: on the comfy loveseat with Abby
• Mood: geeky
• Music: Randy Newman-"It's Money That Matters"

It's the Economy Stupid: Presidents and the Economy

In 1991, President George H. W. Bush successfully and succinctly led a coalition of nations in the first Iraq war in the Persian Gulf. During his term the Berlin Wall had fallen and the Soviet Union had broken up. Bush enjoyed an approval rating higher than probably any president in modern times. A year later, in November of 1992, he was defeated in his bid for re-election. Despite an excellent track record for leadership on the world stage, Bush was defeated at the polls by a previously little known governor of a southern state that ranked 49th in quality of education, and who had a series of his marital infidelities aired publicly. How did this happen? Bush's opponent, President Bill Clinton, campaigned by telling voters a simple message: it's the economy stupid.



The election campaign of 1992 came on the heels of an economic slowdown. Exit polling showed that 75% of voters thought that the economy was in "Fairly Bad" or "Very Bad" shape. Although 63% of voters thought that their personal finances were better or the same as four years ago, the decision by President Bush to accept a tax increase hurt his re-election bid. Faced with rising budget deficits, Bush agreed to a budget compromise with Congress that raised taxes. The Clinton campaign reminded voters that just four years ago Bush had promised "Read my lips, no new taxes!"

This brings us to our theme for this month: Presidents and the Economy. We will especially focus on what one person in the Twitterverse has called "the Panic Presidents", those on whose watch "panics" (as economic depressions were once called) occurred. In some cases, Presidents suffered because of the actions of their predecessors, in other cases the economy crashed because of a series of bad decisions. Some Presidents tried to apply a series of cures and some believed that the market would cure itself. Some believed that an atmosphere of optimism was a cure for the problem. In the recent past, one called for personal austerity, while another famously claimed "government is not the solution, government is the problem."



Do voters make their decisions on pocketbook issues? It it enough for an incumbent or his opponent to ask "are you better off now than you were four years ago?" I don't promise definitive answers, but hopefully the lessons of history will offer some insight into these questions.