How recessions chased three presidents, and how two others recovered – the hill

New economic data is due on Thursday, and it could show negative GDP growth for the second consecutive quarter.

Two such classes are usually seen as indicating stagnation. But President Biden and other prominent figures, including Treasury Secretary Janet Yellen, argue that the current situation is different for several reasons, among them the strong labor market.

Biden has every reason to avoid hanging the word “recession” on an initial period already marred by high gas prices and the highest inflation in decades.

On Wednesday, the Federal Reserve sought to combat inflation by raising its benchmark interest rate by three-quarters of a percentage point.

Federal Reserve Chairman Jerome Powell said he does not believe the US is “currently in a recession”.

Biden will very much hope he is right.

Here are five presidents who have attempted to navigate stormy economic seas – with very different results.

losers

President Hoover: The Great Depression

Nearly a century later, President Hoover remains a quintessential example of what not to do in tough economic times.

The factors that led to the Great Depression were piling up before the Wall Street Crash of 1929, which occurred less than eight months after Hoover’s inauguration. But the stock market crash – the Dow Jones Industrial Average lost nearly a quarter of its value in two days – ignited a terrifying financial spark.

Hoover, a Republican, stuck to his belief that government should not interfere too much in the economy—a belief that history has come to be regarded as one of the worst political mistakes of the 20th century.

By early 1932, the year Hoover was seeking re-election, unemployment had risen to more than 20 percent.

Come Election Day, Hoover Democrat Franklin Roosevelt, whose promise of a “New Deal” propelled him to win 18 points in the popular vote.

Roosevelt served as president until his death in 1945, fundamentally rearranging American politics.

Hoover’s reputation never recovered.

President Carter: Inflation and distress

President Carter’s example is the one that has dogged Democratic presidents ever since.

Carter intended to restore decency to the White House after the Watergate scandal. In the end, he came to be seen as cowardly and ineffective.

The 1979 energy crisis blew the first big hole in Carter’s re-election hopes. Inflation has risen to more than 10% even as economic growth has slowed.

Inflation was above 13 percent in 1979. That same year, Carter delivered what became known as a “disease” speech. The president didn’t actually use that word, but he diagnosed the United States as having a crisis of confidence that “afflicts the heart and soul of our national will.”

This was not what American voters, accustomed to expressing undying optimism, wanted to hear.

The historical debate continues over whether Carter’s downfall was primarily due to bad luck or bad politics.

Whatever the case, he was ousted from office after only one term by Ronald Reagan.

President George Bush Sr.: Iraq stagnates, and its re-election lost

Foreign affairs’ victories can be fleeting — especially if they hit economic stagnation at home.

This is at least one of the main lessons learned from the single term of President Bush Senior.

Bush, who won the Oval Office in 1988 after eight years as Vice President in the Reagan administration, appeared politically indomitable at the conclusion of the first Gulf War in 1991.

US forces quickly expelled Saddam Hussein’s Iraqi forces from Kuwait in that conflict. Bush was rewarded with high approval ratings. It scored an 89 percent approval rating in a Gallup poll in March 1991.

can’t get better. It did not.

While Bush was a spectator on the world stage, economic growth was faltering badly.

Unemployment rates have also duly risen, from around 5 percent when Bush took office to more than 7 percent in 1992.

Bush advocates assert that the nation had come out of recession by 1992, and the economy was in fact growing at a fairly robust rate by Election Day.

But the public perception – of tough economic times and an unresponsive president – has crystallized.

Bush lost his re-election battle to Bill Clinton.

The winners


President Reagan: The Dark Hours Before ‘Morning in America’

President Reagan is revered, especially by Republicans, as the president who restored American pride after the malaise of the Carter years.

But early in his first term, that seemed far from a sure bet.

The nation was struggling when Reagan took power. At the Federal Reserve, Chairman Paul Volcker decided that inflation must be eliminated, no matter the pain involved.

Interest rates rose above 16 percent in 1981.

These moves contributed to a severe recession, as the national unemployment rate soared to more than 10 percent in late 1982. The Democrats increased their large majority in the House of Representatives by another 26 seats in that year’s midterm elections.

However, over time, harsh medicine began to work. The American economy was booming in late 1983 and early 1984, posting huge gains in GDP of between 7 and 8 percent year on year.

Reagan’s famous 1984 re-election campaign ad was titled “Morning in America.” He won a second term by a landslide, and his Democratic opponent, Walter Mondale, held only his native Minnesota and the District of Columbia.

President Obama: Taming the Great Recession

The country’s first black president took office and the country’s economy was on the brink of disaster.

In January 2009, the month of President Obama’s inauguration, the United States lost nearly 600,000 jobs. Unemployment continued to rise for most of the remainder of the year, eventually peaking at 10 percent in October 2009.

Progress, at least on the question of jobs, has proven painfully slow. The unemployment rate will not fall below 9 percent for another two years — as Democrats had lost control of the House of Representatives in the 2010 midterm elections.

Crucially – both for the country and for its political fortune – Obama has restored some stability to the economy.

An $800 billion economic stimulus bill was passed at his behest in February 2009. The Dodd-Frank Act, which introduced important reforms to the financial system, came the following year.

Obama also supported and managed the auto industry rescue plan that his predecessor, President George W. Bush, had initiated. The bailout, which was controversial at the time, was considered a huge success.

After the success of a daring mission to kill al-Qaeda founder Osama bin Laden in 2011, then-Vice President Joe Biden coined a phrase – “Bin Laden is dead and GM is alive” – ​​that became one of the most powerful vocal raps calling for Obama’s reelection.

In November 2012, Obama defeated Republican Party candidate Mitt Romney by four percentage points in the popular vote.

In doing so, he became the first Democrat since Roosevelt to twice win a majority of the popular vote.

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