Is The Economy Destiny For Gore? Not necessarily. The economic growth rate is key to the outcome of presidential races. But it isn't everything. George W. Bush still has a chance, despite boom times.
By Jeffrey H. Birnbaum

(FORTUNE Magazine) – Common sense says that a growing economy during a presidential election year ought to favor the party in power. Professor Patrick Lynch of Georgetown University has studied the relationship between the economy and presidential elections in the second half of the 20th century. His statistical model says that if the gross domestic product keeps growing at nearly 5% this year, Democrat Al Gore will win eight percentage points more of the popular vote than he would if the economy remained flat. With so huge an advantage for the Vice President, Lynch sees only one outcome: "Gore's going to win."

If political predictions were that easy, we could drop the "vice" from Gore's title and be done with it. But no regression analysis can take the place of voters at the polls. Gore has been trying hard to grab credit for the longest economic expansion in history, and he is likely (eventually) to get his share. But it would be wrong to assume that boom times alone are enough to elect him President.

The economy, of course, is a major factor in choosing a President. In eight of the 12 elections since 1950, the direction of the economy has predicted the outcome (see chart). The correlation is particularly strong when GDP is falling. With the exception of President Dwight Eisenhower's reelection in 1956, the party in power lost the White House every time GDP growth declined during an election year. When GDP growth was rising, the in party generally won.

Still, presidential elections are not bound by the economic determinism implicit in James Carville's famous 1992 slogan, "It's the economy, stupid." If prosperity were all that mattered, we would have had President Hubert Humphrey in 1968 (instead of Richard Nixon); President Gerald Ford in 1976 (instead of Jimmy Carter); and President George H.W. Bush in 1992 (instead of Bill Clinton). That's right, even when Carville was bemoaning the state of the economy eight years ago, the country was pulling out of a recession, not dipping into one. And therein lies an important lesson: In politics, the verifiable facts aren't as important as the political feel of the situation. The winner of an election is often the person who controls the illusion. That's what Carville helped Clinton do so well in 1992. This year George W. Bush is trying to make the case that prosperity isn't enough. Government must promote compassion and integrity as well, he says, something a Clinton clone can't do.

Gore is in a frustrating position right now. There's no question that if the economy were to nose-dive, he would get the blame. "If the economy were in the tank today," says Democratic pollster Mark Mellman, "Gore would probably be 20 points behind. The fact that the economy is continuing to expand is good for the Vice President. The fact that it's expanding at a lower rate is less good." At the same time, Gore is not getting much credit for the unprecedented prosperity of recent years. "Alan Greenspan, high tech, and business in general get more credit than the Clinton Administration," says Karlyn Bowman, a polling expert at the American Enterprise Institute. "That's why Gore's not benefiting from the strong economy the way he might otherwise."

The good times have been rolling for so long, in fact, that voters appear to be taking them for granted. Many people barely remember the last downturn, in 1991. Furthermore, prosperity enables voters to mostly forget about government and politics; Washington always gets more attention if the economy stumbles. "When the economy is doing as well as it is right now, people tend to escape from politics," Bowman says.

That escapism should favor Gore; if the Democratic economy ain't broke, why would voters want Republicans to fix it? Here's a possible explanation: Gore is Vice President, not President, and he and Clinton have already been in office for two terms. If Clinton were running again, the combination of a strong economy and his high job-approval rating would probably ensure his reelection. But Republican pollster Richard Wirthlin notes that "when the presidency is an open seat, the job rating isn't immediately transferable." Since 1950, incumbent parties have lost control of the White House during a rising economy three times. In every case, the incumbent party was booted out after its second or third term in power (1968, 1976, 1992).

Bush has his own set of problems. Although he has passed the congeniality contest (he's much better liked as a person than Gore), voters aren't sure he's smart enough to be President. His fumbling manner of speaking, his inexperience in foreign affairs, and his admitted preference to delegate the details of policy to others have heightened the problem for him. "Unless the economy just goes through the floor this autumn," says Charles Cook of the nonpartisan Cook Political Report, "Bush will have to clear that threshold of competence to have a chance to win." His choice of running mate at the Republican convention in Philadelphia will be the first major test of his ability to lead and to govern (see box).

At the moment, voters aren't paying much attention to the presidential campaign. To the extent that they are, they care mostly about noneconomic issues: health care, education, family values. This is good and bad for Gore. The budget surplus has whetted voters' appetites for more government, and Gore is more inclined than Bush to provide it. Yet here, too, Gore has been unable to get traction from favorable news. Sitting Vice Presidents traditionally command the support of two-thirds of the people who believe the country is headed in the right direction. But Gore gets only half those people in the latest poll by Public Opinion Strategies. Gore has also consistently received lower marks for overall leadership and his ability to handle the economy than the Texas governor. He has been trailing Bush all summer in most polls.

Part of Gore's difficulty is that he has been in Clinton's shadow for eight years (pundits call him the bathtub ring of the Clinton Administration). That should be remedied during the Democratic convention in Los Angeles in mid-August. A more vexing problem for Gore is the hangover from Monica Lewinsky. While Clinton's job-approval rating has remained in the high 50% range, his personal-approval rating is in the low 30s. The gap between those two measures has never been so wide. "Gore's problem is that [the public's concern about] declining moral values is negating some of his economic pluses," says pollster Ed Goeas.

Bush is already trying to capitalize on these misgivings. He loudly promises honesty in the Oval Office. And despite assertions that Republicans intend to be positive in their message at the convention, expect plenty of pointed references to the lack of trustworthiness of both Clinton and his Vice President.

Can the sins of a President really be visited upon the Vice President? Sometimes they can be. If Vice President Hubert Humphrey had not been tarred by Lyndon Johnson's Vietnam war, he almost certainly would have defeated Nixon in 1968. The economy was on the upswing in the fourth quarter of 1968, but what mattered most back then was not inflation or interest rates, but body counts. "You take some real risks if you rely on any one measure [to predict the outcome of an election]," says Wirthlin, who was Ronald Reagan's pollster. "Changes in the President's job performance, perceptions of how the economy is doing, per capita disposable income--these are all good measures, but they aren't infallible."

To illustrate his point, Wirthlin cites the 1980 election, when Reagan challenged incumbent Jimmy Carter. Although the slowing economy should have been hurting the President, polls right before Election Day showed Carter ahead. After the final campaign event, Nancy Reagan asked Wirthlin: "Are we going to win?" The pollster swallowed hard, but he answered confidently because he had studied everything from voters' take-home pay to Carter's sliding job-approval rating (the hostages were still in Iran). "Yes, Nancy, we're going to win."

Such certainty isn't possible for either side now. Barring a disaster--such as choosing a Quayle-like running mate--Bush will get a bounce in the polls from the GOP convention. Gore will get a similar spike after the Democrats' soiree. By Labor Day the gyrations will have smoothed out, leaving what most pollsters expect to be a very close contest in the fall. The variables to victory are legion. Will anyone even notice there's a presidential campaign while the summer Olympics are on TV for most of September? Who will make the most glaring mistake? Will Gore, an accomplished debater, destroy Bush in two pivotal debates late in the campaign? Who will show up to vote in greater numbers--Republicans hungry for a return to the White House or Democrats fearful of a return to conservatism? And how, exactly, will they vote? University of Virginia political science professor Larry Sabato notes that as many as 10% of the people who go to the polls are undecided even as they stand in line to vote.

Underlying all these questions is the superlative U.S. economy. For Gore, the history of the economy's role in presidential elections provides comfort--but no guarantees.