Paul Krugman reminded me of an old theory of mine. I’m afraid that Krugman looks at as a kind of conspiracy, but it isn’t that at all. At least, it isn’t a conspiracy that anyone responsible is aware of. Basically, it is a way in which Republican presidents are almost guaranteed re-election, while making Democrats much more likely to lose.
It is all based on the fact of political science that the single most important factor in the re-election of a president is the economic trend. Regardless of how good the economy is, if it is improving, the president is likely to be re-elected. If it is getting worse (even if it is still strong), the president is likely to be thrown out. Thus, if a president were really smart, he would cause the economy to tank for the first half of his term and then allow it to improve in the second half.
Of course, even I don’t think that presidents are that cynical. Anyway, they don’t have that much control of the economy. But there is a natural process that causes this effect to take place anyway. Economic policy in this country is now totally out of whack. Democrats have good economic policy ideas that range from quite liberal to quite conservative. Republicans now have pretty much all bad economic policy ideas. Basically, there are two: cut the taxes of the rich and cut spending on the poor. Now, cutting taxes on the rich isn’t terrible, but it does very little good for the economy because the rich already have more money than they can spend or invest. Cutting spending on the poor is terrible because it simply slows the economy.
When presidents first get into office, they have their greatest power. Normally, their big proposals are passed in the first two years or even the first year. This means that Republicans get in and enact policies that harm the economy. But two to three years in, the economy adjusts and finally starts to grow. This happens just in time for the Republican presidents’ re-election campaigns. Remember: it doesn’t matter how bad the economy is, only that it be improving! Thus Republicans have a distinct advantage in this regard.
Democrats, on the other hand, enact policies that improve the economy. So things really do get better the first couple of years of their presidencies. But during the last year or two, the effects have run their course. There may be lower unemployment as the president faces re-election, but it will likely be stagnant or even going down a bit. Thus, for all the good work the president did on behalf of the economy actually works against him.
It is hard to see this effect directly because the Federal Reserve has an enormous impact on the economy. But look at the following graph of civilian unemployment since 1972:
The beginning is complicated. Ford really should have won in 1976; I think we can blame that loss on Nixon. The 1980 election was changed because the Fed created a recession to get inflation down. But when the Fed lowered interest rates in 1983, it made Reagan look really good and assured his re-election in 1984. Bush Sr road the Fed wave into office, but then lost partly just because of cyclical effects, but also because he stopped spending like a drunken sailor. Clinton does his thing. Bush Jr stole the election. (Just look at the graph!) But Bush is the best example of this effect. His policies make things worse but the harm stops when he is up for re-election. Obama gets the same free pass into the White House that Reagan did. But the crisis was so bad that he managed to slide into a second term.
This was the main reason that I feared Romney getting elected. I was sure that he was going to have this kind of effect on the economy and that he’d get re-elected because things were finally getting better in 2016. But it might not have worked out that way. Romney might have had a Democratic arc. After all, the economy was still terrible in January. He probably would have made the Bush tax cuts permanent and that would have been good for the economy. The Republicans are always against Keynesian stimulus when a Democrat is in the White House, but they love it when a Republican takes his place. So maybe Romney would have been a one term president too. Things are so bad, all bets are off.
The main thing is that Republican economic ideas are generally bad and Democratic economic ideas are generally good. And this means that Republicans have a distinct advantage in controlling the White House.