Category Archives: Political Science

Misery Loves Company: Incumbents, Inflation and Unemployment

I want to follow my last post regarding unemployment and reelection by discussing a few other economic measures that are often referenced as useful indicators regarding a president’s reelection chances.  One of the most frequently cited is the “misery index”, which is simply a combination of the unemployment and inflation rates.  Anna Esten has put together some more charts documenting the relationship between the misery index and the electoral fortunes of incumbent presidents dating back to Truman in 1948.  The following chart shows the misery index for each incumbent president in the October before the presidential election.  Red indicates the incumbent lost his bid for reelection.

Not surprisingly, incumbents (Ford, Carter and Bush I) lost in three of the four highest misery index years.   The exception is Reagan in 1984, but the explanation for his win becomes clear when you look at the index level four years previous, when he beat Carter.  Carter lost when the October misery index was a horrendous 20.27, the highest any post-World War II incumbent faced in the month before election.  In the intervening four years, however, it came down nearly 9 points, and voters rewarded Reagan for that drop.

Reagan excepted, it appears that incumbents are in dangerous waters when the October misery index is hovering near double figures in an election year.  Where does this put Obama?  As of this past May, the misery index, driven mostly by high unemployment,   was at 12.7 – clearly dangerous territory.  But, of course, we are a long way from October, 2012.  Moreover, one might be tempted to argue, citing the Reagan exception, that the trend in the index come next October is more important than the actual number.  However, the historical record does not necessarily support this. As the following chart shows, the misery index was going down in the third quarter leading up to the elections in 1980 and 1992, but not enough to prevent Carter and George H. W. Bush from losing their reelection bids. Truman’s experience in 1948 suggests that presidents need to see a significant drop in the index to benefit.  If you start in double figures, and only begin to come down as the election draws nigh, it may be too little too late.

Of course, inflation has not been a major concern during Obama’s presidency – as yet.  So we might think that it is the trend in the unemployment rate that will be most crucial come November 2012.  But again, history does not provide Obama much solace, as this chart showing third quarter changes in unemployment rates (actually, it’s the change from July’s rate to October’s) indicates.

As we can see, a drop in unemployment was not enough to save Carter, Bush I or Ford.  To be sure, Carter and Ford were combating “stagflation” – high  unemployment and inflation.  Jobs alone couldn’t save them.  Truman, on the other hand, presumably survived the jump in the jobless rate in 1948 because it was combined with a steep drop in prices, which sent the overall misery index down. But Bush lost mainly because of concerns about jobs, even though the job picture was actually improving.  It was Clinton, however, who benefited.

The more general conclusion is that perceptions about the economy seem to lag reality.  That means the window of opportunity for changing voters’ attitudes regarding Obama and the unemployment rate may be shorter than we think.

Before we write off Obama’s reelection chances, however, the obvious caveats remain:  First, it’s July 2011 – not July 2012.  Second, we are projecting results based on 10 data points whose historical relevance can be debated.  I hope I made clear in the last post the great uncertainty surrounding any effort to extrapolate from such a small data set.  On the other hand, we shouldn’t blind ourselves to the political reality of running for reelection when unemployment is among historically high post-war levels.  Simply put, the economic fundamentals mean Obama is facing a difficult reelection challenge no matter which of the current Republican candidates he faces.

I’ve focused on very basic economic indicators here.  Nonetheless,  they do provide a good shorthand assessment of the fundamentals that drive elections.  If I get the chance, however, I’ll present some additional economic indicators focusing on disposable income, and some more sophisticated analyses that have proved very useful in predicting past election outcomes.

 

 

Invoking the 14th Amendment: How Not To Solve the Debt Crisis

As the (purported) August deadline for raising the debt ceiling inches closer, with no sign of a budget deal between House Republicans and the President, pundits this past week began proposing a way to avoid a budget crisis (see also here) : invoke Section 4 of the 14th amendment to the Constitution.  Section 4 begins: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, should not be questioned.”  The idea, as pushed by Katrina vanden Heuvel, Garret Epps, Bruce Bartlett and others, is that by invoking the 14th amendment, President Obama simply negates the need for Congress to vote on raising the debt limit, since under the Constitution the government is obligated to pay its debts, congressional approval or not.  Under this plan, he orders Treasury Secretary Tim Geithner to continue borrowing money to pay the government’s debts.   If the House Republicans resist, Obama can simply point to the Constitution and say that the action was necessary to prevent the nation from enduring the calamity that would occur if it defaulted on its debt.

The idea, to be succinct, is stupid.

Admittedly, I’m not a constitutional scholar.  But I do find the argument constitutionally dubious.  The clause was originally intended to reassure lenders that the U.S. government would pay the debts it incurred during the Civil War.  It may be true, however, as advocates of this approach suggest, that the Supreme Court has expanded its reading of the clause to assert that all debts incurred by the federal government are legally binding.  Fair enough. But if we read the 14th amendment in its entirety (take note, students – always read the entire article!), it concludes with this clause:  “Section 5.  The Congress shall have the power to enforce, by appropriate legislation, the provisions of this article.”

That’s Congress – not the President or his cabinet members – that is assigned the job of enforcing this clause.  And, historically, it has done so by passing a statute setting a ceiling on how much debt the federal government can incur.  That action is entirely consistent with its authority, as stipulated by the Constitution (see Article I, section 7 in particular) to control the federal government’s purse strings – authority it has zealously safeguarded against presidential encroachment since the nation’s inception.  Consistent with that authority, all previous presidents have recognized the validity of Congress’ setting a debt ceiling.  So, if Obama takes this route and invokes section 4, he not only breaks with the precedent established by previous presidents, he also runs the risk of provoking a constitutional crisis by appearing to encroach on Congress’ fiscal powers.

But even if we grant that there may some constitutional leeway here allowing Obama to act, there is a more fundamental reason why he should avoid this route by all means possible: it is bad politics in the broadest sense of the word.  The Framers created a system of shared (not separated) powers to prevent exactly the type of unilateral action vanden Heuvel, Epps and Bartlett are advocating.  Instead, by forcing the President, House and Senate – each of which caters to a different constituency – to interact in the legislative arena, policy differences are forced into the open.  The idea was to highlight disagreements, stimulate debate and resolve those differences through bargaining and compromise.  In short, if the system works as intended, we should see precisely the type of debate over raising the debt ceiling that is going on now.  Short-circuiting that debate by executive fiat is not only bad politics for Obama – it’s bad for the nation.  Of course, in the current media environment, all sorts of doom-and-gloom prognostications are aired.  All the better to raise ratings, sell advertising and stir debate.  But if you look beneath the bleatings of the punditocracy, what you see in the debate over raising the debt ceiling is a more fundamental discussion about what government does, and how we should pay for it.  This is a debate worth having, and it almost certainly will end in compromise, with Republicans conceding to raise revenue through closing various tax loopholes and Democrats agreeing to spending cuts.  Of course, it makes no sense for either side to signal their willingness to compromise until they have to.  Indeed, the history of the legislative process tells us that Congress does not legislate until the political costs of not doing so are greater.  If the sky-is-falling crowd is correct, neither side wins by allowing the U.S. to default on its debt.  So some type of agreement will be reached – if the constitutional-based system of separated institutions sharing powers is allowed to work as the Framers intended.

Could I be wrong? In this intensely polarized environment, in which elected officials of both parties pay increasing attention to the ideological extremists who fund them, aided and abetted by a media that thrives on controversy, don’t we run the risk that they would rather drive the government car over the cliff in a deadly game of budgetary chicken instead of compromising?   Certainly that’s possible.  It may be that some parties truly believe that defaulting on the debt does not pose as big a danger as the sky-is-falling crowd suggests.  Keep in mind, however, that making extreme statements is all part of the gamesmanship central to the bargaining process.  I’m not willing to discard two centuries of evidence suggesting that legislative compromise occurs only when the alternative is politically unacceptable to all parties involved on the basis of media hype and loose talk.

In the meantime, invoking the 14th amendment is a bad idea – for Obama, for Congress, but most importantly, for us.

“Take a Law, Grace”: How Presidents Really Make Policy

President Franklin D. Roosevelt was known to turn to his secretary, Grace Tully, and begin dictation by saying, “Grace, take a law”.  Roosevelt’s quip was a play on line from a George M. Cohan musical, I’d Rather Be Right, which ran on Broadway during FDR’s presidency in the 1930’s.  (For the archivally-interested among you, Tully’s papers, along with those of FDR’s other primary secretary Missy LeHand, were finally acquired by the FDR Library and opened to researchers late last year.) It is appealing to think of FDR sitting behind his desk, head thrown back, his mouth clenching the ever-present cigarette holder at a jaunty angle, while he dictated the legislation that formed the core of the New Deal. Alas, the image is largely fanciful.  In fact, presidents rarely “make” laws so much as they choose among alternatives presented to them by their staff. Indeed, most presidential decisionmaking occurs at the end of a long process in which options are developed, debated and redrafted by aides before they are finally presented to the president for his ultimate decision.  To be sure, presidents can and do intervene in this process, and their initial preferences usually guide debate.  But those preferences are rarely so well refined that they dictate the details of legislative proposals or executive orders or the fine print of any of the vehicles presidents use to “make” policy.

I was reminded of this after spending a week this past January at the Jimmy Carter Library in Atlanta, putting the finishing touches on my book on White House staffing.  Carter’s papers, as is the case with the other eight presidents whose archives I’ve explored, provide a useful reminder that presidents rarely have the luxury of delving deeply into the substantive details of a policy decision.  To illustrate, consider the process which led to Carter’s “unilateral” decision to reorganize the Executive Office of the Presidency (EOP) early in his presidency.  (The EOP houses the president’s major staff support agencies, including the White House staff, and the Office of Management and Budget.)  During his 1976 presidential campaign, Carter had pledged to combat waste and inefficiency in government by reducing and reorganizing departments and agencies – something he had done as Governor of Georgia. After persuading Congress to grant him reorganization authority in 1977 (authority which had lapsed under Nixon’s presidency) Carter directed his staff to begin the reorganization process by examining the EOP first, focusing initially on his own White House staff.  The idea was that by making staff reductions within his own White House first, Carter would demonstrate his commitment to making the hard choices necessary to bring down the budget deficit by reducing waste and inefficiency.

The process of reorganizing the EOP, including the White House staff, actually began during Carter’s transition, as aides solicited input from scholars and others familiar with the EOP staff agencies and functions, examined their legal basis and tried to anticipate the political costs and benefits associated with different reorganization proposals. Not surprisingly, much of the opposition to the proposed cuts came from Carter’s own White House aides.  While most of them agreed with the need to scale back the White House staff, almost without except each of them believed their own staff should be exempt. As an example of this resistance, here’s Hamilton Jordan’s memo to Harrison Wellford and A.D. Frazier, the two aides who developed the staff cutting options.  Jordan was Carter’s top White House aide, but he wasn’t exempt from the staff cuts.  Note his complaint that the other White House staff units weren’t suffering staff reduction to the degree that his was, including his hand-written indication that “I’m serious!” (HINT: to read the document, you may need to click on the image and then enlarge it via the zoom/enlarge command).

Despite the internal opposition from Jordan and others, within three months Wellford and Frazier had developed four options for cutting the White House staff, ranging from a 30% to 20% reduction.   On July 9, 1977, Jordan presented these options, summarized in a cover memo stapled to a more detailed description of each option, to Carter.  The following images show Carter’s margin notes on Jordan’s decision memorandum.  Note Carter’s decision to pursue the most drastic, 30%, staff reduction, signified by the “J.C.” initialed at the bottom of the last page below.

And so the decision was made. However, by the end of Carter’s presidency, his aides were complaining that they had cut too much, and that Carter’s presidency was suffering because of it. (Interestingly, this entire exercise was repeated by Bill Clinton when he first took office, and with pretty much the same results). My point, however, is not to debate the choice Carter made.  Instead, it is to point out that even in something as personal as reorganizing his own White House staff, Carter’s “unilateral” decision to reduce personnel by 30% was based on alternatives largely developed by his aides, using research and assumptions of which Carter was only marginally aware.  True, his aides tried to keep Carter informed as the options were developed, and the paper record cannot fully capture the degree to which Carter discussed the reorganization effort.  Nonetheless, Carter’s decision options were primarily determined by his aides; he didn’t sit down and dictate a staff reorganization proposal on his own.

And that is how most presidential decisions are made. Presidents deal with a never-ending series of memoranda that cross their desk on a daily basis, asking them to choose among different options developed by aides, often with deadlines looming that leave little time for careful reflection. Rarely do presidents have the luxury to delve as deeply into the substance of these issues and choices as they might like. Indeed, they are lucky if they can affect these options at the margins.  More generally,  the president must depend on the expertise and judgment of his (someday her) advisers, knowing full well that the repercussions of the choices they make will fall on their shoulders, and not their aides’.  George W. Bush’s memoirs Decision Points (of which I will have much to say in a future post) focuses on the key decisions he made during his presidency.  What it does not reveal, however, is how those decisions and option papers were developed en route to his desk; only rarely do we get a hint that his mistakes – and he admits to many – were rooted in part on the advice and information provided by others.  Bush’s willingness to take the blame is an admirable trait, to be sure, and reflects the reality that, in the end, presidents are the ones who are rightly held accountable for the choices they make. But it also gives a misleading picture of the way decisions are made.

In a television interview two years into his presidency John Kennedy acknowledged the difference between campaigning and governing, and in his perspective versus those of his advisers. When the interviewer asked him what he had learned about being president, JFK responded: “So that I would say that the problems are more difficult than I had imagined them to be. The responsibilities placed on the United States are greater than I imagined them to be, and there are greater limitations upon our ability to bring about a favorable result than I had imagined them to be. And I think that is probably true of anyone who becomes President, because there is such a difference between those who advise or speak or legislate, and between the man who must select from the various alternatives proposed and say that this shall be the policy of the United States. It is much easier to make the speeches than it is to finally make the judgments, because unfortunately your advisers are frequently divided. If you take the wrong course, and on occasion I have, the President bears the burden of the responsibility quite rightly. The advisers may move on to new advice.”

Egypt, Iraq and the Limits of Presidential Power

One of the enduring debates among presidency scholars is whether and to what degree presidents are more powerful in foreign than in domestic affairs. The answer, as you might expect, depends in large part on how one defines “power” and “foreign” affairs. I won’t bother taking you through the extended debate among scholars, much less deign to provide an answer (as with most complicated questions, the best response is “it depends”), but the intellectual roots of this controversy date back at least to a famous article published in 1966 by Aaron Wildavsky in which he claimed that presidents in fact wield much more power in foreign affairs, in part because they have a near monopoly on crucial information pertaining to international events and because there are fewer competing power centers within the foreign affairs bureaucracy.   Two recent events remind me of why I have long been skeptical of this portion of Wildavsky’s argument, and why I don’t think presidents view themselves as very powerful in foreign affairs at all. .

To begin, as most of you know, yesterday in Egypt (their time) it appeared that President Mubarak was poised to step down. Testifying today (our time) before the House Intelligence Committee, CIA director Leon Panetta seemed to confirm that expectation.  When Mubarak subsequently went on state television to announce that although he was relinquishing some, or all, of his powers, he was not stepping down, the CIA had to put out a public clarification noting that Panetta was reacting to news stories, and not basing his statements on any inside intelligence gathered by the CIA.  Panetta’s actions come on the heels of reported exasperation within the White House regarding the intelligence community’s failure to give any hint of the impending uprisings in Tunisia or Egypt.

Meanwhile, it is clear that the Obama administration is unsure of how to respond to the unrest in Egypt. Most noticeably, the President’s national security team and the State Department issued different responses to news stories reporting that Mubarak’s son had been removed from power and that Mubarak was ceding power to his new vice president Omar Suleiman. (Predictably news stories covering this internal debate focused on the role of Frank Wisner, Secretary of State Hillary Clinton’s unofficial Egyptian envoy who is also working with lobbying firm Patton Boggs – a firm that has Mubarak as a client. As I have written on many previous occasions, the divide between the White House and State Department is rooted in differing institutional vantage points more than in personalities – this runs deeper than Clinton/Wisner vs. Obama).

The second piece of evidence pertaining to the Wildavsky thesis came courtesy of my coauthor Andy Rudalevige, who forwarded me a link to documents released by former Secretary of Defense Donald Rumsfeld as part of the publicity tour associated with the publication of his memoirs Known and Unknown.   The partially redacted nine-page document from Rumsfeld to Richard Myers, the chairman of the Joint Chiefs of Staff, was declassified last month, and contains an assessment of the status of Iraq’s WMD (weapons of mass destruction) biological, chemical and nuclear programs. Its contents are succinctly summarized in Rumsfeld’s cover letter to Myers, which states, “Please take a look at this material as to what we don’t know about WMD.  It’s big.”  As it turned out, that knowledge gap regarding WMD’s was even bigger than Rumsfeld or the intelligence community surmised.

This, of course, was not the only intelligence summary that got the Iraq WMD issue wrong – declassified portions of the National Intelligence Estimate from that period show that in the collective judgment of the U.S. intelligence agencies Iraq did possess WMD’s. In reading Bush’s own memoirs, Decision Points, it’s not clear if the uncertainty associated with these intelligence estimates was correctly conveyed to him (“Slam Dunk” anyone?)  But he was clearly blindsided by the failure to find WMD’s – just as Obama has been blindsided by the recent uprisings in Tunisia and Egypt.

My point is not to defend Bush for acting on faulty intelligence, or to criticize the divisions within the Obama administration regarding how best to respond to the Egyptian crisis.  It is instead to point out something that is abundantly clear to anyone who spends even a modicum of time reviewing presidential archives pertaining to foreign policy decisions (as I have spent a good portion of the last decade doing): presidents may feel greater pressure to lead in foreign affairs, but their actual capacity to shape events in this sphere is distinctly limited – often more so than it is at home.  And, as Bush’s memoir reminds, presidents certainly don’t feel any more powerful in the international arena compared to the domestic one.  Indeed, the frustration is often greater in foreign affairs. This is in large part because, in contrast to the Wildavsky thesis, presidents are often acting on incomplete or even inaccurate information, and the foreign affairs (or national security) bureaucracy is no more monolithic or responsive to presidential direction than is its domestic counterpart.  Indeed, the notion that the president is “in charge” of the national security bureaucracy and can use that authority to act unilaterally in foreign affairs is, in my view, a dangerous perspective, in no small part because presidents quite naturally feel pressured to act on that misperception.  The end result of such unilateral efforts is often a weakening of their power base.

Already we are beginning to see an undercurrent of restlessness, especially among progressives, wondering why Obama hasn’t acted more forcefully to push Mubarak out. (Presumably they believe there is a happy medium located somewhere between toppling a ruler through invasion versus watching and waiting – but this leaves a very very large grey area for U.S. intervention).  We can’t be sure what behind-the-scenes steps Obama is taking, of course, but the complaints are a reminder that even in foreign affairs, presidents are not as powerful as we think they are or that they might wish to be.

Reagan, Obama and the Myth of the Teflon Presidency

Last Sunday marked the centennial of Ronald Reagan’s birth.  The anniversary occasioned numerous tributes and remembrances, most of which noted Reagan’s celebrated skills as the “Great Communicator” and his reputation for developing a “Teflon Presidency” – one that somehow escaped blame for the economic problems of the day.  That latter sobriquet was coined by Democratic Congresswoman Pat Schroeder in a 1983 speech on the House floor, when she said of then President Reagan: “He has been perfecting the Teflon-coated presidency: He sees to it that nothing sticks to him.” Schroeder’s exasperation was shared by many Democrats at the time, and it is a characterization that, as last Sunday’s remembrances indicates, has only grown more widespread through the intervening years.

What is the source of the Teflon-like qualities attributed to Reagan’s presidency?  In a editorial in Sunday’s USA Today, Schroeder explains: “Why was Reagan so blame-free? The answer can be found in the label that did stick to him — “The Great Communicator. Reagan’s ability to connect with Americans was coveted by every politician. He could deliver a speech with such sincerity. And his staff was brilliant in playing up his strengths. They made sure the setting for any speech perfectly captured, re-emphasized and embraced the theme of that speech. And, let’s be honest, Reagan told people what they wanted to hear.”

She concludes: “…Reagan’s incredible ability to communicate and his staff’s genius in exploiting that ability are the reasons his presidency will be sealed forever in a Teflon coat.”

Schroeder’s characterization, as Sunday’s remembrances remind, is shared by many.  It is also completely wrong.  In fact, Reagan did not escape blame for the economic recession, high unemployment and other problems that occurred on his watch. Instead, the dynamics driving changes in his popularity were largely the same as those governing approval ratings of most presidents – including Barack Obama. Note that he left office with a lower average approval rating (based on Gallup polling) than his three successors: George H.W. Bush, Bill Clinton and George W. Bush. That average, of course, masks tremendous variation in his month-to-month ratings, as  these Gallup Poll surveys indicate:

It is true that he left office slightly more popular than when he entered – one of the very few modern presidents who can make this claim.  But clearly his popularity was not static. Instead, we see a slow but steady decline from a peak of near 70% shortly after the failed attempt on his life early in his administration to a low of 35% in January, 1983.  Thereafter it begins a steady rise before enduring a steep, sudden decline in 1985.  That is followed by a slight recovery to a peak of 68% in May of 1986, but he suffers another decline in 1987 that brings him down to about 50%, where he remains until benefiting from the typical post-election bounce as a lame duck president.

So much for the approval numbers. What explains them?  Greatly simplified, the answer is jobs and Iran-contra.  Consider the following chart (courtesy of Jay Cost).

We see that Reagan’s net popular approval (approval minus disapproval) is almost the mirror image of the national unemployment rate – when unemployment goes up, his net approval drops.  And for most of his first term, the nation was experiencing a severe job loss, one largely induced by the Fed’s stringent monetary policies designed to wring inflation out of the economy.  The result was that by 1982 unemployment had reached record post-World War II levels, averaging 9.7%, and remaining high, at 9.6% on average through 1983.  Even though inflation dropped from a yearly average of 9.2% in 1981 to 3.8% in 1983, Reagan paid a steep political price for the job loss, despite the fact that the economic conditions were arguably driven more by the Fed’s actions than by his.  The Republican Party also suffered, losing 26 seats in the 1982 midterm elections despite raising far more money than Democrats. This was a bigger than typical midterm loss (although smaller than one might expect given the horrendous unemployment figures).  It was not until job growth began that Reagan’s approval ratings reversed course, and he cruised to reelection with a landslide victory in 1984.

The Iran-contra affair – Reagan’s ill-fated attempt to trade arms for hostages, and to funnel “residual” payments to the contras in Nicaragua – provided the second huge influence on Reagan’s popularity. When that scandal broke in 1985, Reagan suffered the greatest one-month drop in approval ever recorded for any president. Although he regained some of that support, he suffered another hit when the Democratically-controlled Congress released its summary report of the affair, which roundly criticized Reagan, in 1987.

The mistaken belief that Reagan’s presidency exhibited Teflon-like qualities is more than a misreading of history – it also contributes to a misperception regarding Obama’s popularity.  Early in his first term, when his approval ratings remained above 60% despite high unemployment, political analyst Steve Kornacki wondered whether Obama was exhibiting a Reaganesque-Teflon touch. As Obama’s approval ratings began a steady decline, however, analysts changed their tune, with many pondering why Obama had suddenly lost the communication mojo that had characterized his successful presidential campaign.  Some even suggested that the public – influenced by unusually negative news coverage – was holding Obama to a more stringent standard, in part due to his race.  After all, Reagan had also experienced high unemployment, but his approval ratings – thanks to that mystical “Teflon” – seemingly remained impervious to the bad news.

Alas, those who misread history are condemned to misuse it.  Obama – like the Great Communicator before him – has discovered that no amount of “hope and changey” rhetoric can overcome the negative political impact of persistent 9-plus unemployment.  A Teflon presidency?  That’s the wrong material.  Think Velcro instead – when problems of national magnitude occur – they stick to the President, whether justified or not.   If Obama is to make a Reagan-like political recovery, it won’t be because he suddenly rediscovers his communication skills – it will be due to a steady drop in the unemployment rate.