US Politics: Extrapolating Hope and Change to Presidential Term Realities

In politics “hope” and “change” are common catchphrases which may help serve as a useful ticket to winning elections.

According to the Economist, ``BARACK OBAMA is fond of hope and change. By one tally, he said “hope” nearly 450 times in speeches delivered on the campaign trail. (By contrast, his rival John McCain only used the word 175 times.) “Change”, too, was a campaign buzzword. In his inaugural speech Mr Obama made three mentions of hope and only one of change (plus a “changed”). He mentioned America seven times, followed by “work” and “common” (six times each).

``While hope has found a place in each of the 26 inaugural addresses, change is used more sparingly. Seven inaugural speeches did not contain the word; six more made use of it just once. Presidents coming to office during economic booms, such as Calvin Coolidge and Warren Harding in the 1920s, Dwight Eisenhower and then George Bush junior, have been heavier users of hope than those who were inaugurated during leaner times.”

The Economist list the number of times “hope” and “change” were used in all previous presidential inaugurations.

Why the prominent use of hope and/or change by politicians? To market themselves…even after elections.

As Seth Godin explains, ``The reason is simple: people need more. We run out. We need it replenished. Hope is almost always in short supply.

``The magical thing about selling hope is that it makes everything else work better, every day get better, every project work better, every relationship feel better. If you can actually deliver on the hope you sell, there will be a line out the door. Hope cures cynicism. Hope increases productivity. Hope needs no justification.”

Yet, marketing and delivering promises are two distinct things. In the political sphere, sloganeering can be possibly shaped by the prevailing economic conditions or by just plain rhetoric.

To advance this perspective, we will attempt to get some clues by comparing these to several indicators.

But we will have to narrow the Economist list starting from 1953. The abridged ranking is as follows:

1. Dwight Eisenhower (1953,1957), 2. George Bush Sr (1989), 3. George Bush Jr. (2005), 4. Richard Nixon (1969), 5. Lyndon Johnson (1965) 6. Ronald Reagan (1985), 7. John Kennedy (1961), 8. Harry Truman (1949), 9. Ronald Reagan (1981), 10. Bill Clinton (1993, 1997), 11. George Bush Jr. (2001), 12. Jimmy Carter (1977) and 13. Richard Nixon (1971).

And we will concentrate on the top 5 heavy political rhetoric (PR)…

Chart Federal Reserve of Atlanta

From the GDP standpoint there seems to be little correlation between the top PRs and economic rate of change.

What seems noteworthy however is that the GDP volatility had been materially been narrowing from the Eisenhower to the Reagan Period (1953-1981) compared to the Reagan to Bush era (1981-2009).

Chart Federal Reserve of Atlanta

The next chart is the measured against unemployment.

The top 4 out of 5 PR Presidents: Eisenhower, Bush Sr., Bush Jr. and Nixon saw unemployment surge as their inaugurals nearly coincided with the US economy’s transition to recession periods.

Only President Lyndon Johnson presided over a declining unemployment rate.

But noticeably for the two term Presidents in Eisenhower and George Bush Jr., the trend had mostly been up during their entire tenure!

Chart from Wall Street Journal

The above chart from the Wall Street Journal exhibits the approval ratings during their tenure.

Some noticeable points:

-Harry Truman and George Bush Jr. had the highest approval ratings but spectacularly collapsed at the culmination of their term.

-George Bush Sr., who also had a surge in ratings possibly due to the Iraq war, likewise saw a sharp decline but not as steep as George Bush Jr. or Harry Truman.

-Dwight Eisenhower, who oversaw a sharp rise of unemployment, managed to end his term with exceptionally high approvals rating similar to Bill Clinton. Could this be due to the Korean war?

-Except for President Bill Clinton every past Presidents saw lower exit ratings compared to when they assumed office but the degree of variances are dissimilar. Nonetheless, in his inaugural address, Bill Clinton had the highest use of the word "change" among the Presidents.

-only George Bush Jr. seemed to score low in terms of popular ratings combined with a tenure of rising unemployment.

The high approval ratings can be expressed in terms of public approval of perceived actions or satisfaction of economic conditions or influenced by nationalistic fervor (war, 9/11 etc.) or expectations of hope or change and cannot be directly measured as economic performances.

Yet high approval ratings tend to be followed by a collapse over the years.

Finally we find no strong general association between political rhetoric and economic performance or whether politicians delivered the goods they promised.