- - Wednesday, December 13, 2017

ANALYSIS/OPINION:

The invisible hand of American presidential politics is economics. Almost imperceptibly guiding the electorate, no other issue is as determinant of a presidency’s success. Currently, it is supporting Donald Trump through his political problems and could push him to re-election, as it has so many others.

Adam Smith in “The Wealth of Nations” observed that a capitalist pursuing his self-interest is “led by an invisible hand to promote an end which was no part of his intention.” Economics exerts a similarly surreptitious force in American politics. It seemingly pushes the electorate into bipartisan support for an incumbent president — even when no part of their intention.

In the United States, sitting presidents almost always win elections. They do so because they are most frequently running on a positive economy. Since 1932, only four presidents seeking to stay in office have lost; 11 have won. This lopsided political success rate follows the measure of economic success.

Of the four losing presidents, each has had annual negative real gross domestic product (GDP) growth within a year of their election losses. In 1992, George H.W. Bush lost (minus 0.1 percent in 1991). In 1980, it was Jimmy Carter (minus 0.2 percent in 1980). Gerald Ford lost in 1976 (minus 0.2 percent in 1975 and minus 0.5 percent in 1974). And, of course, Herbert Hoover in 1932, who had three negative years following the Depression. So rare are negative growth years during this period, that only one other such year appears within a year of a presidential election — 2008, when Republican John McCain failed to succeed George W. Bush.

Bill Clinton proved how powerful a strong economy can be — even to a politically weak president. In 1992, Mr. Clinton won with just 43 percent of the popular vote — far less than Mr. Trump’s 46 percent in 2016. Even in his first Congress with strong Democratic majorities, Mr. Clinton accomplished little, notably failing to pass health care reform.

In a 1994 landslide, Democrats lost both houses for the first time in four decades. Mr. Clinton confronted aggressively hostile Republican majorities throughout the remainder of his presidency.

Mr. Clinton remained relatively unpopular. Even being re-elected in 1996, he failed to win a popular vote majority. Plagued by scandals, he was only the second president to be impeached.

Mr. Clinton survived, not from political strength, but owing to a robust economy. From 1946 to 2008, U.S. real GDP averaged 3.1 percent annual growth. During the Clinton years of 1993 to 2000, it averaged 3.9 percent. Devoid of political accomplishments, economic prosperity became his greatest achievement.

America’s invisible economic hand that guided Mr. Clinton through his political shortcomings, and re-elected 10 other presidents since the Depression, could do the same for Donald Trump.

Headlines have trumpeted the stock market’s success throughout Mr. Trump’s first year in office. Of late, broader economic indicators have followed the same upward direction, including the GDP.

Fresh off upward revision, third-quarter GDP now stands at 3.3 percent. Following the second quarter’s 3.1 percent rise, these are the first two consecutive quarters above 3 percent in three years. Should the fourth quarter follow suit, it would be the first quarterly trifecta since 2005. Three percent growth was the post-World War II norm through 2008, but from 2009 to 2016, the average annual rate has been less than half that — just 1.5 percent.

Further, if tax reform is enacted, Mr. Trump will gain even more. Tax reform is widely expected to boost the economy, already a demonstrable good for presidents. Such legislation would additionally give Mr. Trump an unmistakable political claim on further economic success — something presidents get under normal circumstances.

The American economy’s invisible hand may be subtle, but it is unquestionably powerful. Since the Depression, no sitting president seeking election has lost the White House with positive economic growth within a year of that election. In the case of some, such as Mr. Clinton, it has even compensated for the lacking political power of some of its beneficiaries.

America’s invisible hand again could be on the verge of favorably guiding a president. Mr. Trump may not simply benefit from a good economy, as all presidents have, but benefit even more from a stronger claim on an economy looking even stronger in comparison with his predecessor’s.

J.T. Young served in the George W. Bush administration as director of communications in the Office of Management and Budget and as deputy assistant secretary in legislative affairs for tax and budget at the Treasury Department.

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