Presidential Elections and the Economy

1. 1976: Ford 48.0%, Carter 50.1%

   Real GNP growth (Economy):
   Two Year: 2.57%
   Four Year: 2.60%
   Previous Administration: 2.98%

   Unemployment Rate (Jobs):
   Two Year: 8.09%
   Four Year: 6.69%
   Previous Administration: 5.00%

   This election is quite an unusual one to examine, as Gerald Ford replaced Richard Nixon after Nixon's resignation. As well, we are comparing the performance of a Republican incumbent (Ford) to a previous Republican administration. Looking at these economic indicators, it is easy to see why the incumbent lost. The economy was in a slow decline during this period, and the unemployment rate jumped sharply. Given the performance of the economy during Ford's tenure, it's a little surprising that this election was a close as it was.

2. 1980: Carter 41.0%, Reagan 50.7%

   Real GNP growth (Economy):
   Two Year: 1.47%
   Four Year: 3.28%
   Previous Administration: 2.60%

   Unemployment Rate (Jobs):
   Two Year: 6.51%
   Four Year: 6.56%
   Previous Administration: 6.69%

   In 1976 Jimmy Carter defeated an incumbent president. In 1980 he was the defeated incumbent president. It would appear that the unemployment rate had little to do with Reagan's landslide victory over Carter, as the rate of unemployment improved over Carter's presidency. However, the last two year of the Carter adminstration saw the economy grow at a paltry 1.47% per annum. The 1980 Presidential election suggests that economic growth, and not the unemployment rate, can bring down an incumbent.

3. 1992: Bush 37.8%, Clinton 43.3%

   Real GNP growth (Economy):
   Two Year: 1.58%
   Four Year: 2.14%
   Previous Administration: 3.78%

   Unemployment Rate (Jobs):
   Two Year: 6.32%
   Four Year: 6.44%
   Previous Administration: 7.80%

   Another unusual election, as we are comparing the performance of a Republican president (Bush) to another Republican adminstration (Reagan's second term). The strong performance of third party candidate Ross Perot caused Bill Clinton to win the election with 43.3% of the popular vote, a level usually associated with the losing candidate. Republicans who believe that Bush's defeat lies solely on the shoulders of Ross Perot should think again. Although the unemployment rate decreased during the Bush administration, the economy grew at a paltry 1.58% during the final two years of the Bush administration. The economy was in recession during the early 1990s and voters took out their frustrations on the incumbent.

Incumbent 42.3%, Challenger 48.0%

Real GNP growth (Economy):
Two Year: 1.87%
Four Year: 2.67%
Previous Administration: 3.12%

Unemployment Rate (Jobs):
Two Year: 6.97%
Four Year: 6.56%
Previous Administration: 6.50%

Be sure to continue to Page 4 of "Presidential Elections and the Economy".

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