Recessions haunted 3 presidents, and how 2 recovered

(The Hill) – New economic data is due Thursday, and it may show negative gross domestic product (GDP) growth for the second consecutive quarter.

Two such quarters are usually seen to indicate a recession. But President Biden and other senior figures, including Treasury Secretary Janet Yellen, argue that the current situation is different for a number of reasons, chief among them a strong job market.

Biden has reason to avoid the word “recession” in a first term that has been marred by high gas prices and the highest inflation in decades.

On Wednesday, the Federal Reserve sought to combat inflation by raising benchmark interest rates by three-quarters of a percentage point.

Fed Chairman Jerome Powell said he did not think the United States “is currently in a recession.”

Biden will be desperately hoping that he is right.

Here are five presidents who tried to navigate the stormy economic seas — with wildly different results.

The Losers

President Hoover: The Great Depression

Almost a century, President Hoover remains a textbook example of what not to do in dire economic times.

The factors leading to the Great Depression had been building before the Wall Street crash of 1929, which occurred less than eight months after Hoover’s inauguration. But the collapse of our stock market – the Dow Jones Industrial Average lost almost a quarter of its value in two days – ignited a terrifying financial blaze.

Hoover, a Republican, held the belief that the government should not interfere much in the economy – a belief that history has judged as one of the worst political mistakes of the 20th century.

By early 1932, the year Hoover would be re-elected, unemployment had risen to over 20 percent.

Come Election Day, Hoover was crushed by Democrat Franklin Roosevelt, whose “New Deal” promises propelled him to an 18-point victory in the popular vote.

Roosevelt would serve as president until his death in 1945, fundamentally reordering American politics.

Hoover’s reputation never recovered.

President Carter: Inflation and malaise

President Carter’s example is one that has followed Democratic presidents ever since.

Carter intended to restore decency and humility to the White House after the Watergate scandal. Finally, he came to be seen as timorous and ineffective.

The 1979 energy crisis blew the first big hole in Carter’s re-election hopes. Inflation rose to double digits even as economic growth fell sharply.

Inflation was running above 13 percent in 1979. In the same year, Carter sent what has come to be known as “malaise”. The president never actually used the word, but he diagnosed the United States as suffering from a crisis of confidence “that strikes at the heart and soul of our national will.”

That’s not what the American electorate, accustomed to expressions of unbridled optimism, wants to hear.

The historical debate still rages about whether Carter’s downfall was mainly due to bad luck or bad policy.

Whatever the case, he was ousted from office after just one term by Ronald Reagan.

President George HW Bush: Iraq, recession and lost reelection

Foreign affairs victories can be fleeting – especially if they clash with declines at home.

That is at least one of the key lessons of President Bush’s single term in office.

Bush, who won the Oval Office in 1988 after eight years as vice president in the Reagan administration, seemed invincible politically at the conclusion of the first Gulf War in 1991.

American forces quickly drove Saddam Hussein’s Iraqi forces out of Kuwait in the conflict. And Bush was rewarded with sky-high approval numbers. He registered an 89 percent approval rating in a March 1991 Gallup poll.

It couldn’t have been better. And no.

When Bush took to the world stage, economic growth was badly affected.

Unemployment has also risen, from roughly 5 percent when Bush took office to more than 7 percent in 1992.

Bush’s defenders insist that the country was out of recession by 1992, and that the economy was actually growing at a fairly robust pace by the time Election Day rolled around.

But the public perception — tough economic times and an unresponsive president — has crystallized.

Bush lost his re-election fight to Bill Clinton.

The Winners

President Reagan: Dark hours before ‘Morning in America’

President Reagan is revered, especially by Republicans, as the president who restored American pride after the malaise of the Carter years.

But at the start of his first term, it looked far from a sure bet.

The nation was struggling when Reagan took office. Over at the Federal Reserve, Chairman Paul Volcker had decided that inflation must be crushed, no matter the pain involved.

The interest rate moved above 16 percent in 1981.

Those moves contributed to a severe recession, with the national unemployment rate rising above 10 percent by the end of 1982. Democrats increased their large House majority by another 26 seats in that year’s midterm elections.

Yet over time, the drug began to work. The US economy boomed in late 1983 and early 1984, posting large GDP gains between 7 and 8 percent on an annualized basis.

A famous Reagan ad in his 1984 re-election campaign called it “Morning in America.” He won his second term in a huge landslide, his Democratic opponent Walter Mondale only carried his native Minnesota and the District of Columbia.

President Obama: Taming the Great Recession

The nation’s first Black president took office and the nation’s economy was on the brink of disaster.

In January 2009, the month of President Obama’s inauguration, the United States lost nearly 600,000 jobs. Unemployment continued to rise for most of the rest of the year, eventually peaking at 10 percent in October 2009.

Progress, at least on the employment question, proved to be very slow. The unemployment rate will not drop below 9 percent for two more years – at which point Democrats have lost control of the House in the 2010 midterm elections.

Crucially – both for the country and its own political fortunes – Obama reintroduced some stability to the economy.

The $800 billion economic stimulus bill was passed by his order in February 2009. The Dodd-Frank Act, bringing significant reforms to the financial system, came the following year.

Obama also supported and managed the auto industry bailout initiated by his predecessor, President George W. Bush. The bailout, controversial at the time, became seen as a huge success.

After the daring mission to kill Al Qaeda founder Osama bin Laden succeeded in 2011, Vice President Joe Biden coined the phrase – “Bin Laden is dead and General Motors lives” – which became one of the strongest sound bites in Obama’s defense. re-election.

In November 2012, Obama defeated GOP nominee Mitt Romney by 4 percentage points in the popular vote.

In doing so, he became the first Democrat since Roosevelt to twice win an outright, majority-popular vote.

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