The economy dictates the fortunes of American presidents, but presidents have struggled to dictate the fortunes of the economy

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We're half a day away from the end of voting, and it's time for some real-talk about an election that was supposed to be all about the economy: The economy is more important to the president than the president is to the economy.

As Republicans have warned again and again in the last year, economies make or break presidents. They're right. Carter lost in a weak economy, Reagan won in a strong recovery, Bush lost over a shallow recession, Clinton won over a booming economy, Bush eked out a win in a shallow recovery, and Democrats swept into office riding the mother of all financial calamities in 2008.

Those stories aren't cherry-picked or fudged. They're part of a long trend. Take, for example, earnings: More than any other stat, it's personal income growth that's the best indicator of an incumbent's chance at reelection. Or take jobs: Since World War II, the one-year change in the population's employment percentage has predicted the election every year but 1976 (Watergate), according to David Leonhardt. Or take animal spirits: The average October consumer sentiment before a reelection is 28% higher than before an incumbent loss.

Candidates matter, campaigns matter, demographics matter. But the pre-election economy creates fundamental momentum that is difficult to overcome.

It's much harder for a president to make or break an economy. The White House is but one of three branches of the federal government; the federal government is but one-fifth of the U.S. economy; and the U.S. economy is a fraction of global activity, which determines gas prices, exports, and the success of most multinational companies that rely on overseas markets. 

For every president in the last 50 years who appears to be the savior or wreckers of his respective economy, there is a more plausible case that each was a beneficiary or victim of circumstances. Carter was felled by an oil shock, while Reagan was the recipient of a strong recovery powered by Fed Chairman Volcker (plus an underrated lift from the boomers entering their peak-earning years). Not even the most excitable liberals would try to credit President Clinton for engineering the 1990's productivity blast-off or blame George W. Bush for the entire housing meltdown. These men were made and unmade by their circumstances.

The same goes for Barack Obama. The president, along with his keen Treasury Secretary Tim Geithner and Fed Chair Ben Bernanke, acted swiftly to set a floor under the recession, with stimulus for the states, quantitative easing for the financial sector, and stress tests for the banks. But since his first three months, the president has hardly been able to enact any sort of policy to grow the economy besides extending various policies, like the Bush tax cuts and unemployment insurance, while tacking on a payroll tax cut that replaced lost wages more than it led to an income and job-creation boom.

A weak recovery nearly destroyed President Obama's chances at reelection. But a strong economy would seal his legacy (or create a new legacy for President Romney). With government austerity gone and a housing recovery here, the next president will probably preside over a strengthening recovery in his first year. That recovery, if it continues, would make Obama the guy who came into office losing 800,000 jobs a month and oversaw a full recovery; a strong economy could also create a halo effect that would engender support for health care reform and even bolder legislation on immigration and climate change. Meanwhile, if Romney wins, and the economy turns up in early 2013, he will look like a genius.

Just as the recovery was destined to be weak no matter who was president, the early 2013 economy is likely to be strong no matter who is president. The old rule holds: The economy dictates election fortunes and legacies, but our economic fortunes are frustratingly out of the president's control.

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