Plotting Expectations

Appears in The Economist.

RESTORING confidence in America’s future is one of the overarching goals of Mitt Romney’s economic plan, entitled “Believe in America”. The very fact of his victory in the presidential election on November 6th would generate “a great deal of optimism”, he argues, even before he got a chance to do anything. Some economists doubt the president has that much sway over the economic mood. But assuming the office does hold such clout, which presidents have used it most successfully? The University of Michigan has been surveying consumer expectations every month since 1978 (and less frequently since 1946). The chart shows the change from the month before the presidency is decided to the month before a new administration is determined. The chipper Ronald Reagan, who declared “morning in America”, succeeded in raising the index 22 points during his first term. But his performance was bested by both Bill Clinton and Barack Obama. Indeed, it turns out that the man Mr Romney is seeking to oust has lifted consumer expectations by more than any other elected president has managed in a single term. But that result should not lift Mr Obama’s own spirits too much. The only president to pip his performance was Gerald Ford, who assumed the presidency after Richard Nixon’s resignation. But Ford still lost the subsequent election.