08/05/2012 06:47 pm ET Updated Oct 05, 2012

How the Economy Can Help or Hurt President Obama

GOP presidential contender Mitt Romney predictably jumped all over the jobs report for July which saw joblessness tick up slightly. He called it a hammer blow for the middle-class. Certainly much has been made of the fact that no president has won reelection since World War II with the jobless rate above 8 percent. That and the report seemed to spell bad news for President Obama. But it's anything but that. The report also showed a jump in the number of jobs for the month. Some non-partisan economists and financial experts predict a slow but steady trend upward in the job numbers over the next few months. That's potentially a plus for Obama's reelection.

But it's not strictly good or bad job numbers that pretty much determine whether sitting presidents will continue to sit in the Oval Office or will be sent packing by voters. It's the timing of the positive or negative numbers. In a look at how six of eight presidents fared since 1948 when the economy hit the skids or appeared to skid, the scorecard for presidents winning and losing because of economic misery is a draw. Three incumbents were beaten and three incumbents beat back their challengers. It came down to whether voters really perceived that their economic plight would stay the same, or get worse, if the incumbent got another four years in the Oval Office.

The winners and losers have been both Republican and Democratic presidents. They have won and lost even when there was widespread public unease over the economy and many voters believed things wouldn't get any better. The presidents who won had to do and have two crucial things in the face of rising unemployment, recession, inflation, and public grumbles. One is that the economy had to improve or appear to improve immediately before the election. And they had to assure a majority of voters that things would and could get better with them if they stayed in the White House and their opponent couldn't do any better. Romney and Obama understand that the battle is not so much with the job numbers and the economy's performance, since the numbers can be spun for and against the incumbent. Obama must drive home the notion with voters that things are and will get better under him in the next four years. Romney's single-minded aim is convince voters that they won't. Incumbents and their challengers have played the dance around the economic numbers and voter perceptions repeatedly with mixed results.

Presidents Gerald Ford and Bush Sr. lost the dance. The combination of real and voter perceived economic woe helped sink both of them. In Carter's case, it helped and hurt. It helped him win when the economy went bad for Ford in 1976. Carter played up that fact and won a narrow victory over Ford. Voters must perceive that the economy will get worse under the incumbent and the challenger has to reinforce public fears that things will get worse.
But four years later, GOP presidential challenger Ronald Reagan turned the tables on Carter. With interest rates soaring , home prices escalating, high unemployment, and a seeming clueless Carter on how to halt the slide, Reagan was able to nail Carter with the enduring question "Are you better off than you were four years ago" during their debate on October 28, 1980. Reagan won in a near landslide. The exact reverse was true for Reagan and Bill Clinton. Reagan's supply side economics and big tax cuts were credited with igniting a mid-1980s economic boom. Clinton's tax hike, deficit reduction program, and investment stimulus program, was credited with turning a record deficit into a record surplus and adding millions of new jobs to the rolls.

As Reagan's vice president, Bush Sr. benefited from his economic policies. In 1988, he won the election. Four years later, when things turned sour he lost. It was not just a bad economy but at the point the economy turns bad in the life of the administration, and the public perception that things will get better or worse. The downturn for Bush Sr. came during the last two years of his term. The last thing that an incumbent wants is for voters to go to the polls with fear and doubt fresh in their minds about the economy.

Bush Sr.'s history did not repeat itself with George W. Bush in the 2004 election. Unemployment was high, and economic growth, as Democrats happily noted, was slower than during Clinton's second term. But the Clinton record was the stuff of envy and was impossibly hard to match. Bush didn't have too. There was just enough economic growth and a slightly downward trend in overall unemployment during the last two years of Bush's first term, to largely mute any Democratic attacks on him for a miserable economy.

Bush took the cue and solemnly pledged the economy would grow even more with his tax cuts, downsizing of government spending, and stepped up drive to deregulate in his second term. If the economic negatives had hit harder in Bush's last two years, as it did with his father, this could have spelled the same disaster for him as it did for Bush Sr.

The proverbial "it's the economy, stupid" is a hard fact of presidential elections. But history has shown it can work for or against sitting presidents depending on when voters see the economy as improving or failing. That can help or hurt President Obama.

Earl Ofari Hutchinson is an author and political analyst. He is a frequent political commentator on MSNBC and a weekly co-host of the Al Sharpton Show on American Urban Radio Network. He is the author of How Obama Governed: The Year of Crisis and Challenge. He is an associate editor of New America Media. He is the host of the weekly Hutchinson Report on KPFK-Radio and the Pacifica Network.

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