How past presidents have coped with similar domestic strife
For Reagan, the economy recovered quickly and strongly, carrying him to re-election in 1984, one of the biggest landslides in US political history. It’s possible Obama could benefit from an equally robust economic revival before Election Day 2012. But expectations are lower this time, because the government has already used up most of its tools to boost the economy.
Recent history suggests a president’s fortunes can turn dramatically, for better or worse, on economic swings from the halfway mark of his first term to the next Election Day. Here are some examples:
Midway through his first term, Reagan’s approval rating was 37%. No wonder. When Reagan delivered his State of the Union address in January 1983, the unemployment rate was at 10.4% — nearly 3 percentage points higher than when he took office.
Federal Reserve chairman Paul Volcker had pushed interest rates as high as 20% to slow the economy and snuff out inflation. He succeeded. But the result was the deepest recession since the Great Depression. Political pundits wrote Reagan off as a one-term president.
Yet once he whipped inflation, Volcker reversed course and lowered interest rates. Reagan’s tax cuts also jolted the economy. By Election Day 1984, the unemployment rate had fallen to 7.2% and was still dropping.
A little more than two years into his presidency, George HW Bush looked invincible. His approval rating had hit 89% after the US military drove Saddam Hussein’s Iraqi forces from Kuwait in February 1991.
But a weak economy extinguished Bush’s hopes for re-election. The military triumph in the Persian Gulf temporarily lifted Bush’s popularity after the United States slid into recession. Rising unemployment, though, gradually took a toll. So did the perception that Bush had lost touch with voters who were struggling financially. His opponent in the 1992 election, Bill Clinton, famously built his campaign around the phrase: “It’s the economy, stupid.”
By November, the unemployment rate was 2 percentage points higher than when Bush took office.
Bill Clinton was floundering after two years in the White House. His healthcare reform plan had failed. In the 1994 midterm election, Republicans had seized back control of both the House and Senate. Clinton’s approval rating was at 47%.
But over the next two years, a strengthening economy, and a successful budget standoff against congressional Republicans, reversed Clinton’s fortunes. From his inauguration through Election Day 1996, the unemployment rate fell from 7.3% to 5.4%.
Attention to terrorism and war overshadowed George W Bush’s first term, despite an eight-month recession in 2001 and a slow recovery that produced few jobs. After the 9/11 attacks, the nation rallied around Bush as he prepared for the March 2003 invasion of Iraq.
Two years into his presidency, Bush’s approval rating was 58%, even though unemployment was higher and the stock market lower than when he took office. His approval rating would top 70% after US troops occupied Baghdad in April 2003. From there, Bush’s approval rating would fall steadily.
The unemployment rate rose from 4.2%, when Bush entered the White House, to 5.4% on Election Day 2004. By then, the economy had lost jobs since the president had taken office. Even so, Bush managed to score a solid victory over Senator John Kerry in November 2004.
President Barack Obama’s popularity could be worse considering the unemployment rate remains 9.4% more than a year after the recession ended. An Associated Press-GfK poll found that 53% of Americans approve of how Obama is governing, a middle-of-the-pack ranking for presidents in a second year.
More than half of Americans disapprove of his handling of the economy. Only 35% say it’s improved on his watch. That’s down from 40% a year earlier.
But analysts expect the economy to pick up speed between now and Election Day 2012. But Obama can’t benefit as Reagan did from aggressive interest rate cuts by the Fed. Fed chairman Ben Bernanke has practically run out of ammunition, having already lowered short-term interest rates to near zero. So Obama faces the risk unemployment remains high when voters decide if he deserves four more years.
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