Is it really just ‘the economy, stupid’?

Tom Curry National affairs writer • Profile • E-mail

WASHINGTON - In 1932 no political consultant needed to tell voters, “It’s the economy, stupid.”

All they had to do was step off the bread lines and cast their ballot to oust President Herbert Hoover, who had come to personify the Great Depression.

After winning nearly 60 percent of the popular vote four years earlier, Hoover sank to 39 percent in 1932, the biggest collapse for an incumbent in the 20^th century.

Americans tell pollsters the economy this year is their biggest concern. Economic growth has slowed, perhaps to the point that the nation has toppled into a recession.

But that same data indicates that Americans' perception of economic conditions is more dire than the conditions themselves.

According to a survey of 1,503 adults in late July by The Pew Research Center for the People & the Press, 72 percent of respondents said the economy is either in a recession or a depression, with about one-fifth opting for the depression view.

Yet preliminary economic data from the second quarter of this year shows that the nation's output of goods and services was still growing at 2 percent when adjusted for inflation. In the recessions of 1982 and 1991, output was shrinking.

Does the apparent sense of despondency mean that the electorate will again hold the incumbent Republicans responsible, as it did in sending Hoover packing in favor of Franklin D. Roosevelt?

Perhaps. In part, the answer hinges on voters' assessment of a non-economic factor: Sen. Barack Obama's readiness to be president.

And in part, the answer depends on which party voters consider the incumbent. Naturally Republicans are using every opportunity to point to Democratic control of House and Senate and paint the Democrats as the party in power.

The economy as the key to every election?
Possibly due to Roosevelt’s lasting imprint on his party, Democratic strategists often revert to the economy as their default issue, seeing it as the key to almost every presidential election.

The 1992 election, for which Democratic consultant James Carville coined the phrase “It’s the economy, stupid,” was the most recent case of a sour economy resulting in the election of a Democratic president.

Four years ago, when terrorism and national security were vivid in voters' minds, Democratic candidate John Kerry also tried to make the election about the economy.

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After the final Kerry-Bush debate in Phoenix on Oct. 13, 2004, Kerry’s chief strategist Bob Shrum told reporters in the “spin room” that same-sex marriage and other social issues mattered very little because “the economy is in terrible trouble.”

But was the economy really “in terrible trouble”?

Unemployment was at 5.5 percent, almost exactly the average for the post-World War II period.

Per capita income, adjusted for inflation, had been growing at a rate of about 2 percent during President Bush’s first term, just a shade less than the average per capita income growth since 1952.

In 2008, in contrast, even many wealthy Americans are being hard hit by the foreclosure crisis, the sagging stock market and inflation.

Economist Douglas Hibbs estimates that the four year average growth of per capita income for Bush’s second term may be only about 0.75 percent.

Hibbs, who has studied every presidential election since 1952, has found that historically, a number that weak has usually resulted in victory for the party that was not in control of the White House, in this case the Democrats.

Does this mean the economy is the one factor above all others that will determine the election’s outcome?

That is a hard question to answer because almost all of the non-economic factors currently seem to favor Obama:

• Campaign funds: Obama and the Democratic National Committee had raised $490 million as of July 31, compared to the $364 million raised by Sen. John McCain’s campaign and the Republican National Committee, a $126 million advantage for the Democrats.

• News media favorability: Obama has been ubiquitous on television, on news Web sites, and in news magazines, and many of the stories have been positive.

• Voter registration changes: According to veteran electoral numbers wizard Rhodes Cook, since Bush won his second term in 2004, Democratic voter registration has surged by 800,000, while GOP registration has dropped by roughly the same amount. (A cautionary note: two-fifths of the states do not have registration by party.)

• Quality of voter targeting and get-out-the-vote efforts: Democrats are building field offices for Obama even in traditionally Republican states such as Indiana and Nebraska. And Democratic-allied groups such as Mi Familia Vota are buttressing the Obama effort with new registration crusades.
• The apparent decline of terrorism and national defense as top-of-the-mind issues.

Income growth favors incumbent party
Obviously, though, the economy will be at the forefront of many voters' minds.

And opinion polling indicates that Obama has benefited from Americans' sense of unease about their financial outlook.

The Pew Research survey in late July found that nearly half the respondents believed Obama would be better at improving economic conditions, while about one-third thought McCain would better handle the economy; one-fifth were agnostic on this point.

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