In the mid-2000s in Atlanta, I saw the late Hamilton Jordan riding up a bookstore escalator. If you've been around a while, you’ll recall that he was White House Chief of Staff during the Carter administration.
It had been over twenty-five years since Jordan was regularly in the media, but I recognized him instantly. He looked pretty much the same.
I wondered whether Jordan harbored any bitterness over President Carter's tough defeat after just one term in office. Jordan was the main strategist who helped the relative unknown rise to the very highest elected office. He was in the trenches when Carter's prospects were no sure thing. He was a loyal intimate of the former Georgia governor.
Then, the whole journey ended with Carter's decisive re-election defeat.
But why did the electorate fire President Carter?
Was it the unresolved Iran hostage crisis? Double-digit interest rates? Economic recession?
Well, some political commentators do say that foreign policy may play a role in presidential elections.
But far more say, "It's the economy stupid!" The conventional wisdom is indeed that the economy, above all else, will determine whether a president is re-elected.
But what people presume is not always true.
We decided to find out for ourselves:
...we tested changes in four different measures of the economy: gross domestic product (GDP); real GDP, in other words, GDP divided by the PPI; the inflation rate according to the change in PPI; and finally, unemployment. … Why did we choose these measures? Because in several political science papers, GDP, inflation and unemployment are referred to as the “big three.” This is not because they are proven effective motivators of people in the voting booth; it’s presumed that they should be.
Elliott Wave Theorist, April 2012
But after rigorous statistical analysis, we discovered that the economy is not determinant when it comes to a first-term president keeping his job.
So what is the main gauge of presidential re-election outcomes, and why?