According to the Gallup Polling Organization, public opinion on the true state of the union is assessed according to three key measures. The first is the current president's job approval ratings, followed by the measure of public satisfaction overall, and thirdly, public confidence in the economy.
However, it is public confidence in the economy, more than any other measure, that contributes to overall public satisfaction. And that, in turn, affects the current president's job approval rating, closing the circle.
The question is, does the president control the economy? It depends on who you ask. The Republicans controlled the purse strings during most of the Clinton years. The economy continued to expand, and both sides took credit for it.
When the bubble burst toward the end of Clinton's last year in office, the Democrats blamed the Bush economic plan, even though Bush hadn't yet been elected when the economic slide began.
Clinton ran on the slogan, "It's the economy, stupid!" and, thanks to a fortuitous historical accident, it actually began to look as if Clinton was responsible for the economic miracle. The 'stupid' part, I have always believed, was an inside joke by the spin doctor who coined the phrase. If the president could control the economy, then how come George Bush the Elder couldn't keep the recession that cost him his job at bay for six lousy months?
If Clinton could control the economy, as he claimed, then why did he let it tank in 2000?
The Clinton economic 'miracle' was the result of the discovery of the vast, untapped and potentially limitless market created by the internet. It was as we had discovered a new economic market on the dark side of the moon. The 90's Boom would have happened even if Jimmy Carter had been in office.
Presidents routinely claim credit for the economy when it is good, and blame market conditions or other outside forces when it is bad. Conversely, presidential challengers credit market forces when challenging a president presiding over a strong economy, and blame the incumbent when it is weak.
It is true that a president can mishandle domestic policies that result in economic difficulties, but, absent some real bungling, presidents generally cause the US economy to go up or down in the same way that a rooster's crow causes the sun to rise.
A word from the President has far less effect on the market than does a word from Alan Greenspan. If a president wants his economic policies to succeed, then they must meet with the Federal Reserve Chairman's approval. To that day, George Bush the Elder blames his loss to Bill Clinton on Alan Greenspan, who raised interest rates just before the election.
A president might have priorities and agendas of his own, or of his party's, but in the final analysis, the buck REALLY stops at the Fed Chairman's desk, where he decides what a buck is worth when the market opens that morning.
Type the keywords, 'Bush', 'economic' and 'Kerry' into Google News search and see what headlines Google spits back out at you. The stories are all about how Bush ruined the economy, or how Kerry plans to fix it.
Except for the stories about how Bush saved the economy from the Clinton train wreck, and how Kerry plans to ruin the Bush recovery.
It is an axiom of logic that both cannot be simultaneously true; either Bush saved the economy or he wrecked it. The economic numbers all suggest he saved it. But the Kerry side can produce equally convincing numbers that say he wrecked it and that only Kerry can save it again.
The truth is that the economy operates on a debit-based system.
There is a vast discrepancy between what the economic numbers show and the way they are interpreted. For every positive economic indicator, there is a partisan spin doctor waiting somewhere in the wings to explain why that positive indicator is really an indicator of some 'underlying fundamental' that is failing beneath the surface.
Our economy and how it works is a mystery to most people, and that is what makes it so easy to get confused. So confused, in fact, that people are actually mounting campaigns to repeal tax cuts and raise taxes to 'pay off the deficit' - without ever understanding what that would mean.
