In this age of soundbite television, a pithy phrase uttered in the heat of presidential oratory can change the tide of a race. Usually carefully crafted by a cadre of political marketing experts, these snippets of powerful prose can ring eternally in the annals of history if they resonate with the electorate.
As he accepted the nomination at the 1988 Republican National Convention, George H. W. Bush proclaimed, “Read my lips: no new taxes.” That pledge had been a consistent part of Bush’s 1988 election platform and the soundbite’s prominent inclusion in his speech cemented it in the public’s consciousness. It likely contributed significantly to Bush’s victory over Democrat Michael Dukakis.
Although Bush did oppose the creation of new taxes as president, a worsening recession in 1990 and the growth of mandatory spending resulted in a widening budget deficit. Unpalatable budget cuts would be automatically triggered were the situation not remedied. The Democratic-controlled Congress settled for increases to existing taxes as a way to reduce the national budget deficit, and President Bush was forced to compromise, negotiating with Congress for a budget that technically met his pledge but would play poorly politically.
Despite the reversal, Bush’s approval rating hit 89% in February 1991 after the success of Operation Desert Storm in Iraq. Persistent economic weakness, however, quickly tarnished that sheen. When Bush sought a second term, he found himself on the wrong end of savaging soundbites. His GOP primary challenger, Newt Gingrich, skewered him for flipping his script on taxes. Democrat Bill Clinton also used the episode to paint Bush as untrustworthy.
The most memorable phrase from that election, though, is credited to Clinton strategist James Carville—the outspoken political commentator nicknamed the “Ragin’ Cajun.” Initially intended for internal use, “It’s the economy, stupid” became the de facto slogan of the Clinton campaign. The prevailing economic weakness gave Clinton the upper hand and “the economy” was indeed the rhetoric required to successfully unseat Bush. Political fortunes are as shifty as the Santa Ana winds now relentlessly fanning the wildfires in Orange County, California. By August 1992, Bush had given back—and then some—his robust approval rating of a year and a half earlier. On election eve, 64% of Americans disapproved of his job performance.
Sound Familiar?
With the general election of 2020 only days away, will the oft-repeated phrase by Donald Trump be his Bush-like undoing? He claims, “We’re rounding the turn,” just as new cases of COVID-19 are spiking to all-time highs. Worse for the president, many of these surges are concentrated in the Midwestern states that carried him to victory in 2016. Polls seem a crude means of prognostication given their historic failure four years ago, but the numbers do show growing disillusionment with the president where the virus is hitting hardest, notably Wisconsin.
As of Thursday, October 29, with five days remaining till Election Day, Americans had already cast a record-breaking 77 million-plus early ballots, putting the 2020 election on track for historic levels of voter turnout.
Seeking to turn the conversation away from the virus, Trump’s closing argument at last week’s debate made it clear who the president thinks retirees should support. “If he gets in, you will have a depression the likes of which you have never seen,” Trump warned of his Democratic rival for the White House. “Your 401(k)s will go to hell.” For late voters, perhaps Trump’s ultimate measure of economic success—the stock market—will be his undoing? At the low on Thursday, October 28, the S&P 500 was down from its recent peak over 8%, including down 3.45% on Wednesday alone, the steepest decline in four months.
The 43% of Americans who participate in retirement savings plans at work have already been to hell and back, then halfway there again, as the pandemic took stock prices on a wild roller-coaster ride. By the end of the first quarter of 2020, the average 401(k) balance was down 19%, according to Fidelity Investments, only to rebound 14% over the following three months. More ups and downs followed. The S&P 500 is now nearly flat for the year.
The Irony of It All
Soundbites by definition are succinct. Therein lies their appeal. The brevity of their summaries sideline more sustained reflection. George H. W. Bush had to eat his “Read my lips” comment in 1992, even though his actions leading to that gulping down of humble pie were presidential indeed. As for “It’s the economy, stupid,” students of economic history know that, despite the abundance of rhetoric to the contrary, presidents can do little directly to move the economic needle. Despite 2020’s pandemic-driven vicissitudes and the President’s claims to the contrary, the die for the economy largely had been cast even before Trump took office.
Secular trends in the economy are, for the most part, impervious to the election cycle. Thus, given the weight voters place on economic health, elections often are decided by events mostly outside of the candidate’s control. The president’s economic rhetoric belies an ignorance of macroeconomics. His promises of a “V”-shaped recovery are more the words of a desperate politician than anything that smacks of economic logic or realism.
The economic tides are stronger than political ones. They care little for who occupies the Oval Office.