Opinion Editorial | |
| Wednesday, January 28, 1998 | |
Americans Approve of Economy, Not Clinton | Polls show Bill Clinton's approval rating remains strong despite a growing sex scandal involving a White House intern. A Washington Post-ABC News poll taken over the weekend shows 59 percent of Americans still saying that they approve of the job he is doing in office--virtually unchanged from before the latest scandal erupted. For those who have always had a negative opinion of Clinton, such numbers are baffling. Most Republicans believe that no president of their party could have stood up under so many repeated blows to his character, and they blame pro-Clinton bias in the Washington press corps for the continued support Clinton receives in the polls. While it is true that the press has been less than eager to investigate many of Clinton's alleged wrongdoings, there is, I believe, another explanation for his popularity, and that is the outstanding performance of the economy on his watch. It may be, as many economists believe, that Clinton's policies have had little to do with the low inflation, low unemployment, low interest rates and steady growth we now enjoy. Nevertheless, it is the case that presidents always get the credit or blame for whatever happens on their watch, regardless of what role their policies actually had to do with it. To show how intimately economic conditions affect presidential popularity and the ability of a president to weather scandal, it is worth reviewing the case of Richard Nixon. The Watergate scandal broke in June, 1972, well before the election, when police arrested the Watergate burglars. Yet in November, 1972 Nixon won reelection with an astonishing 60.7 percent of the vote. However, by August, 1974 just 24 percent of Americans still approved of his performance and he was forced to resign from office. Although the Watergate scandal obviously contributed to this downward spiral, we should not overlook the rapid deterioration of the economy between 1972 and 1974. In 1972 the economy grew a healthy 5.5 percent. Unemployment was 5.6 percent and prices rose just 3.4 percent. In January, 1973 Nixon's approval rating stood at 67 percent. Unfortunately for Nixon, these benign economic conditions began to deteriorate very rapidly throughout 1973. The main culprit was inflation, let loose by Nixon's closing of the gold window in 1971, but kept in check with wage and price controls. However, as the controls were removed, prices made up for lost ground. By August, 1973 the consumer price index was rising more than 21 percent per year. This led the Federal Reserve to tighten credit sharply, causing interest rates to rise and the stock market to plummet. Interest rates on 3-month Treasury bills rose from 5.4 percent in January to 8.7 percent by August, 1973. The stock market fell 20 percent in 1973. By the end of the year Nixon's approval rating had fallen to just 29 percent. According to the National Bureau of Economic Research, a recession began in November, 1973. By the first quarter of 1974, real gross domestic product was declining at a 3.9 percent annual rate. At the same time, inflation accelerated, rising 12.3 percent in 1974. Of course, this was partially due to the first Arab oil embargo, which raised the price of imported oil from $4.24 per barrel in October, 1973 to more than $10 in 1974. But however much or little Nixon's policies had to do with this, he got the blame. It is impossible to say whether Nixon could have survived Watergate with a good economy. Nixon himself thought so. He later told journalist Jude Wanniski that "it is very rare in history to see a political leader touched by scandal who is brought down during an expanding economy." If this is true it suggests that economic conditions, not Ken Starr or Monica Lewinsky, ultimately will determine whether Clinton survives politically. Source: Bruce Bartlett (senior fellow, National
Center for Policy Analysis), January 28, 1998.
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