James carville, who worked for Bill Clinton’s presidential campaign, hung a sign in his Arkansas headquarters in 1992. Designed to keep the candidate on-message, it read: “Change vs. more of the same. The economy, stupid. Don’t forget health care.” The second injunction has become famous. It is common knowledge that a strong economy helps an incumbent, whereas a weak one is a liability. But this is less true than it used to be.
Between 1952 and 2009, when Barack Obama became president, the popularity of America’s leaders was quite strongly influenced by the economy. Excluding the first six months of every president’s term (a honeymoon period when ratings tend to be high) a quarter of the variation in monthly presidential approval ratings could be explained by variation in the index of consumer sentiment. Ronald Reagan had an approval rating of 42% when Americans were suffering under high inflation in the summer of 1982. By the time the economy rebounded four years later, his rating had increased by 25 percentage points.