You'd be wrong, at least according to the economists who study these things. They've come up with a surprising conclusion: Even if the economy continues at its current languid growth rate, Bush will be reelected. And, according to some analysts, he'll win handily. "With this economy," says Yale University economist Ray Fair, "it is unlikely that Bush will lose."
Bush has three big things going for him. He's a Republican (and the nation has been trending GOP for years). He's an incumbent -- an immensely powerful advantage, most of the time. And while the economy may not be great, it may be just good enough.
DISPOSABLE INCOME. Fair was uncannily correct in 2000. He predicted six months before the election that Al Gore would receive 50.8% of the vote -- he actually got 50.3%. In '04, Fair sees Bush getting as much as 55% -- a big victory. Another student of the economy and Presidential elections, Douglas Hibbs of Sweden's Goteborg University, uses a different model. While he's less confident than Fair, Hibbs also projects a Bush win.
He figures the best economic indicator of a Presidential election is the increase in real per capita disposable personal income -- the amount of income each person has to spend or save after figuring in inflation and taking out taxes. That measure has been rising at an annual rate of about 1.8% during the Bush Presidency -- below average but enough to give his reelection chances a solid boost.
Fair uses a three-part calculation: He looks at overall growth, inflation, and what he calls good news -- the number of quarters in which the economy grows at 4% or higher. Bush benefits from very low inflation, but GDP has risen at only 1.7% since he took office, and he has had only one good-news quarter. Still, Fair figures if the economy expands at just its current modest rate of 2.4% for the first three quarters of '04, Bush will be in good shape. If growth next year hits 3% -- below most economists' expectations -- he could win in a landslide.
THE JOBS FACTOR. Of course, there are no guarantees. The economy could crater. Or the President could fall victim to a gap between economic reality and public perception. That's what did in Bush's father in 1992. He was defeated by Bill Clinton soon after the U.S. rebounded from recession but before voters felt the turnaround.
A key to that perception lag may be unemployment. Hibbs and Fair don't pay much attention to the jobs data because employment usually tracks GDP growth so closely. But if the expansion picks up and people don't get back to work quickly enough, Bush could have a problem. After all, the growth rate in 1992 was 2.3% -- not much different than today's -- but unemployment remained at a stubbornly high 7.5%. Fair predicted Bush pere would get 50.9% of the vote in'92, but he received just 46.5%. And some hints indicate that the same problem could trouble Bush fils.
Many economists feel the economy will have to grow at 3.5% before employment starts picking up. But whether the nation will enjoy that kind of rebound next year is problematic at best. Says John S. Irons, another election-and-economy watcher: "Usually, it's clear. The economy is doing well and employment is strong, or GDP and employment are terrible. This election might test that. GDP has been slow, but employment has been unambiguously bad."
CREDIBILITY AND CASUALTIES. That's one reason why the White House is anxiously talking up the expansion. Even modestly good news, such as the positive second-quarter GDP numbers, sent Administration aides scrambling to declare a turnaround. "The recovery," Treasury Secretary John Snow insisted on July 31, "is well under way."
It's also important to remember that economics isn't destiny. Other issues could have a powerful impact on the '04 election, chief among them Iraq and Afghanistan, and the war on terrorism. Indeed, Hibbs thinks another key election indicator is the number of U.S. military personnel killed in action during a President's term. Bush's credibility is also becoming an issue, and the possibility of scandal is always a factor.
Still, if the economy is the Democrats' best hope, they face an uphill climb in '04. Perhaps they ought to hope that James Carville's famous rule of Presidential elections -- "It's the economy, stupid" -- turns out to be wrong this time around. Gleckman is a senior correspondent in BusinessWeek's Washington bureau. Follow his views in Washington Watch, only on BusinessWeek Online