(The Hill) – New economic data shows the U.S. economy shrank for the second straight quarter.
Two such quarters are usually seen as indicating a recession. But President Biden and other senior figures, including Treasury Secretary Janet Yellen, are arguing that the current situation is different for several reasons, prime among them the strong job market.
On Wednesday, the Federal Reserve sought to combat inflation by raising its benchmark interest rate by three-quarters of a percentage point.
Fed Chairman Jerome Powell said that he did not think the United States is “currently in a recession.”
Biden will be desperately hoping he’s right.
Here are five presidents who tried to navigate stormy economic seas — with very different results.
President Hoover: The Great Depression
Almost a century on, President Hoover remains the textbook example of what not to do in dreadful economic times.
The factors leading to the Great Depression had been building before the 1929 Wall Street crash, which took place less than eight months after Hoover’s inauguration. But the stock market’s collapse — the Dow Jones Industrial Average lost almost one-quarter of its value in two days — ignited a terrifying financial blaze.
Hoover, a Republican, held fast to his belief that the government shouldn’t meddle much in the economy — a belief that history has come to judge as one of the worst political mistakes of the 20th century.
By early 1932, the year when Hoover would seek reelection, unemployment had soared to more than 20 percent.
Come Election Day, Hoover got thrashed by Democrat Franklin Roosevelt, whose promise of a “New Deal” 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 has never recovered.
President Carter: Inflation and malaise
President Carter’s example is one that has stalked Democratic presidents ever since.
Carter intended to restore decency and humility to the White House after the Watergate scandal. In the end, he came to be seen as timorous and ineffective.
The 1979 energy crisis blew the first big hole in Carter’s reelection hopes. Inflation climbed into the double digits even as economic growth fell away.
Inflation was running above 13 percent in 1979. That same year, Carter delivered what has come to be known as the “malaise” speech. The president never actually used that word, but he did diagnose the United States as suffering from a crisis of confidence “that strikes at the very heart and soul of our national will.”
That wasn’t what American voters, used to expressions of undying optimism, wanted to hear.
Historical debate still rages as to whether Carter’s downfall was chiefly due to bad luck or bad policy.
Whichever is the case, he was ousted from office after just one term by Ronald Reagan.
President George H.W. Bush: Iraq, recession and a lost reelection
Foreign affairs triumphs can be fleeting — especially if they clash with a downturn at home.
That’s at least one of the key lessons from the elder President Bush’s single term in office.
Bush, who had won the Oval Office in 1988 after eight years as vice president in the Reagan administration, seemed politically invincible at the conclusion of the first Gulf War in 1991.
American troops speedily drove Saddam Hussein’s Iraqi forces out of Kuwait in that 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 get much better. And it didn’t.
While Bush was astride the world stage, economic growth was sputtering badly.
Unemployment duly edged up as well, from roughly 5 percent when Bush took office to more than 7 percent in 1992.
Bush’s defenders emphasize that the nation had come out of recession by 1992, and the economy was in fact growing at a fairly robust rate by the time Election Day rolled around.
But public perception — of tough economic times and an unresponsive president — had crystallized.
Bush lost his reelection fight to Bill Clinton.
President Reagan: The 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 early in his first term, that 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 had to be crushed, no matter the pain involved.
Interest rates moved above 16 percent in 1981.
Those moves contributed to a steep recession, with the national unemployment rate moving above 10 percent in late 1982. Democrats grew their sizable House majority by another 26 seats in that year’s midterm elections.
Yet over time, the harsh medicine began to work. The U.S. economy was booming by late 1983 and early 1984, posting huge GDP gains of between 7 and 8 percent on an annualized basis.
A famous Reagan ad in his 1984 reelection campaign heralded “Morning in America.” He won a second term in an enormous landslide, his Democratic opponent Walter Mondale carrying only his native Minnesota and the District of Columbia.
President Obama: Taming the Great Recession
The nation’s first Black president took office with the nation’s economy on the brink of catastrophe.
In January 2009, the month of President Obama’s inauguration, the United States lost almost 600,000 jobs. Unemployment continued to climb for most of the rest of the year, eventually peaking at 10 percent in October 2009.
Progress, at least on the jobs question, proved painfully slow. The unemployment rate would not fall below 9 percent for another two years — by which point Democrats had lost control of the House in 2010’s midterm elections.
Crucially — both for the country and for his own political fortunes — Obama reintroduced some stability into the economy.
An $800 billion economic stimulus bill passed at his behest in February 2009. The Dodd-Frank Act, bringing significant reforms to the financial system, came the following year.
Obama also supported and administered the bailout of the auto industry that had been initiated by his predecessor, President George W. Bush. The bailout, controversial at the time, came to be viewed as a big success.
After a daring mission to kill al Qaeda founder Osama bin Laden was successful in 2011, then-Vice President Joe Biden coined a phrase — “Bin Laden is dead and General Motors is alive” — that became one of the most potent soundbites advocating for Obama’s reelection.
In November 2012, Obama beat 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, popular-vote majority.