The Most Important Factor In The Election?

Hint: You won't hear anyone talk about it on CNN

Good news for Joe Biden this week. Job gains beat forecasts and the phrase “surprisingly strong economy” once again appeared in headlines. Voters mostly refused to acknowledge the good news through 2023 but the latest consumer sentiment surveys suggest the sunshine is finally penetrating the gloom. Optimism is rising. If the economy maintains course through 2024, Biden, for all his faults and weaknesses, will be the heavy favourite for re-election.

That’s the standard sort of analysis political pundits churn out. It’s true, as far as it goes. But let’s push it a little further so we can make plain something that is seldom explicitly discussed — although it is far more important than what pundits usually yammer on about.

Why does a strong economy favour an incumbent president? Because voters generally credit the president for economy. This is so common, so baked into our thinking, that we seldom ask if it makes any sense.

Which is a shame because it mostly doesn’t.

No president is Stalin in the Kremlin. He can’t pick up a telephone and order major changes in the $27 trillion economy. There isn’t a row of switches and buttons on his desk that control innovation, energy costs, consumer demand, and the innumerable other factors that matter. The American economy is immense, unfathomably complex, and profoundly nonlinear. The president can nudge it here and there. But he can’t control it. He can’t even fully understand it. No one can.

Yes, there are possible exceptions, where credit or blame would be appropriate. An intervention at the right time may stop the financial system from imploding. An immense program of spending on the scale of World War II may transform the economy. But in general, crediting or blaming a president for the state of the economy makes only slightly more sense than crediting or blaming the president for the weather.

Yet people do it. Constantly. As a result, the fates of presidents and presidencies are routinely determined by something over which they have little or no control.

There’s a word for something over which you have little or no control. It is “luck.”

“Luck” is a word that should be — but almost never is — front and centre in all political analysis and commentary.

Who wins and who loses. Whose agenda becomes law and policy and whose is forgotten. Who is remembered as a towering figure who made history and who is consigned to the long list of mediocrities and failures. These outcomes are mostly not determined by the qualities of the candidates and the ideologies and policies they advocate. They are determined not by the personalities, campaigns, strategies, and communications that the people on TV obsess about. For the most part, they are the product of plain old luck.

You name the political contest. I’ll show you how luck played critical roles, at a minimum, or how it decided the whole damned thing.

Consider Jimmy Carter and Ronald Reagan.

If Carter’s presidency is remembered at all, it is remembered as a failure. Carter is the quintessential loser. Reagan, whatever else you may think of him, is remembered as the cheerful winner who, for better or worse, changed America and the world. Ask anyone — Democrats and Republicans — why one was a loser and the other a winner and you will hear stories that focus on the talents and qualities of the two men. Carter was “good-hearted but inept” is a standard line. Reagan was “the Great Communicator,” goes another cliche. What you will hear little or nothing about is luck. Yet luck was by far the single most important factor separating the fates of the two men.

Carter inherited an economy suffering from stagflation. At the end of 1978, Iran exploded in revolution. That caused oil prices to soar worldwide. Stagflation worsened. Carter’s approval rating plunged.

Carter appointed Paul Volcker chairman of the Federal Reserve with a mandate to smother inflation with high interest rates. High interest rates drove the economy into recession by the beginning of 1980. That recession lasted until July. Inflation and interest rates remained high and the recovery was anemic.

Carter was defeated by Reagan in November, 1980.

But when Reagan became president, it was not “morning in America.” Reagan kept Volcker in place, and Volcker kept interest rates high, and in early 1981 the economy slipped into an even more severe recession. Reagan’s approval rating followed the same path Carter’s took. Sure, Reagan gave great speeches. But they didn’t matter.

Things got so bad for Reagan that many Republicans speculated he was too old and too tired to campaign in 1984 and would soon announce he wasn’t running. One of those Republicans was Nancy Reagan.

So far, Reagan and Carter sound awfully similar, don’t they? But Reagan was different from Carter in one critical way: He was lucky.

After peaking in 1980, inflation started to fall rapidly, allowing Volcker to sharply lower rates in 1982 and 1983. With economic activity having been suppressed by the Fed for so long, the economy roared to life. By the election of November, 1984, the famous Republican “morning in America” ad rang true for a lot of Americans. Reagan won in a landslide.

The key driver in this drama was Paul Volcker and Fed interest rates. To their credit, both presidents were willing to suffer the political pain inflicted by Volcker’s policy. But only one of them got lucky with the timing of his re-election bid.

Three presidents a century ago provide another illustration.

In 1923, Calvin Coolidge was Warren Harding’s vice-president when the feckless Harding did Americans a favour and dropped dead. Coolidge was doubly lucky. He inherited the presidency — and he inherited it just as the difficult early years of the 1920s were giving way to the golden age of jazz and gin we remember from Fitzgerald novels. As the Republican incumbent in 1924, he won by a landslide. “Silent Cal” did a decent job as president, but the dour New Englander didn’t enjoy the hand-shaking and back-slapping, or the grinding hours, that came with the office. So in 1927, even though another landslide was assured, Coolidge announced “I do not choose to run for president in 1928.”

With Coolidge out, Herbert Hoover stepped to the fore.

At the beginning of the 1920s, Hoover was already renowned thanks to several urgent and complex international jobs — notably saving the lives of millions of refugees in war-ravaged Europe — he had handled for the government. (Trivia question: Who said the following about Hoover shortly after the end of World War One? “He is certainly a wonder and I wish we could make him President of the United States. There could not be a better one.” Answer: Franklin Delano Roosevelt. Yes, really.) He then held a succession of Cabinet positions under Harding and Coolidge and performed them with great skill and energy. When Coolidge dropped out, Hoover was the natural next-in-line, so Hoover duly won the Republican nomination, then, as the economy roared and the stock market soared, he coasted to victory in the 1928 presidential election. The poor bastard.

At the end of 1929, stocks crashed. Hoover wasn’t responsible for that. In fact, as a Cabinet member, Hoover had actually opposed one of the key Coolidge decisions that helped inflate the bubble that made the crash so destructive. No matter. He was president so he was blamed for the crash and the Great Depression that followed and his once-sterling reputation was dragged through the mud of the shantytowns dubbed “Hoovervilles.”

In popular legend, Hoover did nothing to fight the Depression, but that is not at all true. Hoover threw his himself into the job of rescuing the American economy, but he followed the conventional economic thinking of the day. Balanced budgets. The gold standard. Poor relief at the state and local level. By the standards of that conventional thinking, Hoover was actually quite daring, particularly as the crisis worsened and the usual policies failed. But he did not stop the slide.

Enter Franklin Delano Roosevelt. When Roosevelt campaigned against Hoover in 1932, he offered few concrete policy proposals and mostly stuck to the same conventional thinking as Hoover. Roosevelt even attacked Hoover for failing to balance the budget. Only after winning the election, only after taking office when the decline had turned into a terrifying plunge, and only after seeing that conventional thinking had been exhausted and it had utterly failed — only then did Roosevelt embrace the radical experimentation that created the New Deal. In 1936, he was resoundingly re-elected, the first step on his path to the pantheon of great presidents.

Now let’s throw a little counterfactual history into the mix.

If we bear in mind that Roosevelt’s presidential ambitions dated back all the way to the Wilson administration, and he had been the Democratic candidate for vice-president in 1920, it’s quite easy to imagine a few tweaks here and there that turn the Republican dynasty of the 1920s into a Democratic dynasty — culminating in Franklin Delano Roosevelt becoming president in 1928. If that had happened, FDR would have been president when the calamity struck. How would he have responded? Probably much the same as Hoover actually did. With the same results.

Then the Republican Party would have looked for someone to lead the party into the campaign of 1932 and save the nation. Who would they have turned to? Why, at the top of everyone’s list would have been the famous and accomplished Mr. Hoover. He had saved Europe, hadn’t he? Now he could save America.

And in the election of 1932, the incumbent President Roosevelt, who had so signally failed to save America from disaster, would surely have been defeated by the energetic Herbert Hoover.

And then?

Before I answer that, let’s set aside the counterfactual and go back to real history. Read this gobsmacking paragraph from a 2008 essay by political scientist Larry Bartels.

In the United States, voters replaced Republicans with Democrats in 1932 and the economy improved. In Britain and Australia, voters replaced Labor governments with conservatives and the economy im­proved. In Sweden, voters replaced Conservatives with Liberals, then with Social Democrats, and the economy improved. In the Canadian agricultural province of Saskatchewan, voters replaced Conservatives with Socialists and the economy improved. In the adjacent agricultural province of Alberta, voters replaced a socialist party with a right-leaning party created from scratch by a charismatic radio preacher peddling a flighty ­share-­the-­wealth scheme, and the economy improved. In Weimar Germany, where economic distress was deeper and ­longer ­lasting, voters rejected all of the mainstream parties, the Nazis seized power, and the economy improved. In every case, the party that happened to be in power when the Depression eased went on to dominate politics for a decade or more thereafter. It seems far-fetched to imagine that all these contradictory shifts represented ­well-­considered ideological conversions. A more parsimonious interpretation is that voters ­simply—­and simple-­mindedly—­rewarded whoever happened to be in power when things got better.

Now back to my counterfactual: If Republican challenger Herbert Hoover had beaten incumbent President Franklin Roosevelt in 1932, what would have happened? Hoover would have done some things. Those things may or may not have helped. But the economy would have improved, relatively, as it did most places. And in 1936, running as the man who had stopped the slide into oblivion, Hoover would have been re-elected. Hoover and the Republicans may not have delivered the sort of sweeping ideological realignment, and lasting dynasty, that Roosevelt landed in 1936, but they would have been solidly in power. And history would have been firmly on a different path — a path in which Roosevelt is remembered as the hapless president and Hoover the man who save the country.

But none of that happened because luck screwed Hoover, smiled on Roosevelt, and decided that Calvin Coolidge should be the man who walked away laughing.

It is hardly a new observation to say that luck is a relentless driving force in human affairs. Napoleon acknowledged it when he said he would sooner his generals be lucky than good. Ecclesiastes 9:11 tells us “the race is not to the swift, nor the battle to the strong, nor bread to the wise, nor riches to men of understanding, nor favour to men of skill; but time and chance happen to them all.” Ancient Greek mythology is all about capricious gods and the remorseless Fates which answer not even to the gods.

So if it has been obvious to any thoughtful person since the time of Aristotle that luck plays an enormous role, why is it so seldom explicitly mentioned in political analyses?

I think a big part of the answer lies in psychology.

Our need for a sense of control is profound. That’s what makes uncertainty so unsettling. Uncertainty is not knowing, and if we don’t know, we cannot control.

Every informed person understands the stakes are enormous in this November’s election, so it is more than a little disturbing to see plainly that the single biggest determinant of who will win is luck. To focus instead on the personalities, campaigns, strategies, and communications that the people on TV talk about endlessly is a psychological relief. Those are things we can understand. And control.

So we stare intently at beetles to avoid looking the dragon in the eye.

But the dragon is there, whether we acknowledge it or not. In this essay, I’ve reached back decades to provide illustration but perhaps the most spectacular illustration of luck determining who occupies the White House happened only four years ago.

Donald Trump was narrowly defeated in his re-election bid by Joe Biden. Why? Trump was the incumbent. Incumbents routinely win re-election unless the economy has tanked. But going into 2020, the American economy was continuing the long, smooth upward trajectory that started in the Obama years. Things looked great. Of course Trump would be re-elected!

So what happened? A microscopic virus no one had ever heard of starting spreading from human to human in an obscure place on the other side of the planet. As a result, we are now in the fourth year of the Biden administration, not the eighth year of the Trump era. Pure, crazy luck. But how often do we hear that critical election discussed in this way? In my experience, the answer is never.

What could upend the election in November? It takes only a little imagination to realize the possibilities are vast.

Anything that blocks the Strait of Hormuz in the Persian Gulf could change American history, and, by extension, world history. (That would be a bit of a repeat. Remember how surging oil prices doomed Jimmy Carter? They surged because Iranian production was curtailed by the Iranian revolution, an event which surprised everyone from the CIA to the revolutionaries themselves.)

So could a decision by one mercurial and isolated dictator in Pyongyang. And. And. And. The list is endless.

And that’s before we remind ourselves how chaos theory works — even a tiny change in initial conditions can cause enormous change in outcomes — and get down to the truly weird possibilities.

Here’s my favourite illustration of how weird the weirdness can get.

After Franklin Roosevelt won the election of 1932, but before he assumed office, a man named Giuseppe Zangara pointed a revolver at him and fired five shots. The mayor of Chicago, standing alongside Roosevelt, was killed. Roosevelt was uninjured.

Why had the assassin missed?

Because he had been standing on a wobbly chair.

Why was he standing on a wobbly chair?

The answer can be seen in the photograph below.

The assassin was extremely short. That is why he had been standing on a chair. And why he missed.

If Giuseppe Zangara had not been extremely short, Franklin Delano Roosevelt may never have become president.

I should also note that an alert woman hit Zangara’s arm with a handbag. That woman’s reflexes, or the length of her handbag, may have made the difference. Which only underscores the point. It’s also a nice illustration that even after the fact, with lots of eyewitnesses, we can seldom be truly certain about what precisely happened and why.

That’s luck. Always there. Always at work. Always more important than the things we spend most of our time thinking about.

A final thought.

People sometimes dislike talk of luck because it seems to invite fatalism and passivity. If luck will determine who wins in November, why bother donating or canvassing or campaigning? Just wait for the dice roll.

But that is as foolish as the opposite mistake of denying the overwhelming presence of luck.

We do understand some things, although much less than we suppose. And we do control some things, although much less than we think and vastly less than we would like.

Combine knowledge and control with determined effort and we are sometimes able to nudge probabilities in one direction or another. Seldom dramatically. But incrementally, a little here, a little there.

Then, when the dice roll, our chances are a little better.

That’s what all our decisions and hard work come down to. Nudging probabilities. That’s the whole game.

This is not fatalism. It is realism. It does not preclude action and accomplishment. It simply provides a more accurate assessment of the situation.

Daring to look the dragon in the eye is the essential first step in good judgement.