The 1948 Economic Moment That Might Explain Our Own

from The New York Times I'm Michael babo. this is the. [Music]. daily on Friday show we explored. President Biden's political challenge. with a core group of supporters black. voters today his challenge with voters. motivated by the economy at a time when. it looks good on paper but still feels. bad for so many Americans.

my colleague Nate Co says that to. understand the situation it helps to. look back at another election 76 years. ago it's Monday February. [Music]. 5th Nate we just got the latest batch of. economic news on Friday which showed a. surge in hiring a very strong us labor.

market and it really highlighted this. conundrum we've talked about a lot on. the show which is that we're living in a. pretty healthy economy and yet voters. are still quite sour on the economy and. now that we've entered this general. election phase of the presidential. campaign that Dynamic looms as a pretty. major question mark over the entire race. because it doesn't feel like we have a. precedent for it does this sentiment.

help Trump does it help Biden but you. say Nate we actually do have a precedent. for this this weird economy in an. election year it has happened before so. just. explain yes it has but I've been. searching for a long time to find a. economic and political moment that. resembles the economy we have today and. that's been really hard because you know. in the era of modern consumer confidence.

data there just isn't an economy like. this one there isn't an economy that has. this weird combination of low. unemployment High economic growth and a. dissatisfied electorate but I wound up. digging just a little bit further back. just before the era of modern consumer. confidence data and I did find an. economic moment that actually bore a lot. of resemblance to the economy today and.

it also had very similar political. characteristics to what we see today. with a dissatisfied country under. circumstances that look a lot like what. we've seen since the pandemic and it. happened to be an election year and a. very famous election year at that okay. first of all congratulations that seems. like a really big find thank you what is. the year the year is. 1948 so postwar but just barely just. barely and and like the post-pandemic.

economy the postwar economy after World. War II was really weird. H Housewives shopping for their holiday. dinners found food prices 40% higher. than 18 months ago the end of wartime. rationing LED all of these consumers to. immediately start buying goods again and. led inflation to Skyrocket trying to. replenish their wardrobes Americans. found clothing up 19% you know at the. same time all these troops had come home.

from overseas and they were looking for. housing and there was a housing shortage. against the twin handicaps of spiraling. costs and material shortages there is no. veteran problem more pressing than. housing and a lot of that is like what. we see today obviously the housing. market is really tight right now and. more generally this is the only moment. in the era of modern economic data when. a president oversaw an economy with. inflation over 7% while unemployment. stayed under 4% and and the economy kept.

growing like it did today there's no. other example like. [Music]. it so on paper in 1948 and. 20024 have just a tremendous amount of. economic similarity yeah and I think. that one thing that I think is charming. about the example is that the source of. this weird set of economic conditions. was sort of fundamental similar both the.

end of the pandemic and the end of the. war economy brought these. disruptions that led to the distortions. in prices led to the distortions in the. housing market and left Americans. feeling strangely dissatisfied even. though by other measures like. unemployment or growth things look. pretty goodh you know and at the time. Harry Truman was President he was a. Democrat he took over after the death of. FDR in. 1945 and in large part because of prices. in the economy Harry Truman's popularity.

collapsed he started out with a 90%. approval rating after World War II but. by the early part of his election year. in 1948 his approval rating was all the. way down to. 36% wow not unlike correct me if I'm. wrong you're the polling expert. President Biden today that's right it's. very similar Joe Biden's approval rating. right now is in the upper 30s so that's. right next to where Harry Truman was at. the time any know it's worth dwelling on. just.

remarkable The public's dissatisfaction. with the economy was I mean we think of. the postwar era as being the dawn of. this really prosperous time for. Americans which in retrospect it. certainly was but Americans were so. pessimistic about the economy they. thought a depression was likely and More. than. 70% of Americans said they wanted their. own wages to go down if that's what it. would take in order to bring down prices. wow okay so weird postwar economy highly. dissatisfied public and you mention. mentioned this was an election year so.

Truman politically speaking is in real. trouble yeah deep trouble the Democratic. Coalition is falling apart he's seing. his way in over his head and you take. one high-profile example the new. Republic then a very prominent liberal. magazine you know argued that he should. just leave the race alt together and not. even run for reelection but of course he. doesn't leave the race he's left facing. an opponent in Republican Thomas dwey. who he seems very likely to lose to he's. trailing in the polls he's in a lot of.

trouble heading right up to the election. so amid this toxic economic feeling. moment that seems so lethal for Truman. what happens well things start to turn. around the economy stages a big comeback. inflation plummets inflation's at 10% in. January 1948 and it falls in half by. October and voters perceived that they. reported to pollsters that they expected. prices to rise when it was the summer. and by the time the election came around.

they weren't expecting additional price. increases and with that economic. backdrop Truman runs one of the most. famous campaigns in American political. history let's take a look at the record. of the 80th Congress though so proud of. I call it the notorious do nothing. Republican 80th Congress you may. remember from your US history class that. he runs against the do nothing congress. the thing that Congress wasn't doing was. taking action to control prices that's. the true story of why prices are so high.

so he runs a populist campaign to try. and argue that the Republicans aren't. standing up for working people and. despite all of that Truman still trails. in the polls to his rival the Republican. Thomas Dey all the way up until the end. Governor Thomas E Dey proclaimed as the. overwhelming favorite records his own. vote with calm confidence the. expectation that dwey is going to win is. so strong that there are even newspapers. printed before the election is over that. say Dewey defeats Truman but in the end.

through the day and far into the night. the results come in state by state until. the news that confounded the experts and. the prophets Truman win Harry Truman. wins in what's arguably the most famous. comeback in American political. [Music]. history so how much is President Biden. on this kind of a Truman economic. Improvement political Fortune Revival. path or not economically I think there's.

a really good case that Biden is on the. Truman path or even ahead of schedule. inflation has been steadily declining. already over the last year you know as I. just mentioned a moment ago inflation. was still at 10% in January 1948 and. inflation today is already down under 4%. and may still be expected to fall. heading into the election and there are. already signs that voters are beginning. to respond to the positive economic news. we just got new consumer confidence data. over the last few days and it shows that.

consumer sentiment has risen to the. highest level since 2021 which is of. course the year that post pandemic. inflation really began to set in and it. also happens to be the last time Joe. Biden's approval rating was over 50% and. importantly Americans expect that. inflation is going to continue to. decline so there's this sort of sense. that maybe we've gotten through the. toughest part here in brighter days are. ahead and these gains in consumer. sentiment are broad it's up across every. age group group every income group and.

every educational group so those are. very positive signs for Joe Biden if he. wanted to try and pull off something. like what Harry Truman was able to pull. off in 48 so this very much does seem to. be a largely analogous trajectory. economically speaking 1948. 2024 Democrat Harry Truman Democrat Joe. Biden yeah absolutely I mean that. doesn't mean they're the exact same. election there are all kinds of. differences Truman had to overcome.

challenges that Biden won't have to. overcome Biden will have to overcome. challenges that Harry Truman didn't have. to overcome and one of the biggest. differences here is that Joe Biden owns. the blame for inflation in a way Harry. Truman didn't why not well you know as I. mentioned Harry Truman was able to blame. Congress he said he had the solution to. inflation in a way that Joe Biden simply. can't say. today but one of the biggest differences. and what may prevent history from. repeating itself today is that. the economy just is not nearly as.

powerful as it once was in shaping. electoral. outcomes and so even if Biden is able to. replicate Truman's exact same economic. Fortune it may not be enough for him to. win. [Music]. re-election well we'll be right.

back n you just said that a major. difference between 1948 and now. 2024 and whether or not Biden is or is. not Truman in this election has a lot to. do with the economy and you suggested. that it's not as powerful of force in. elections as it had been in the past and. that's surprising I mean every thing we. have been told as political journalists.

and As Americans is that it's the. economy stupid right the economy is. decisive in elections so you're just. going to have to explain yourself well. the economy is absolutely a huge factor. in shaping our elections still but it's. not the only thing that matters and over. time there have been more and more signs. that the economy has become a little. less important in shaping the outcome of. our elections and what are those signs. well one easy sign that I think we can.

all see in our everyday lives is the. approval ratings of our presidents take. Donald Trump Donald Trump presided over. an excellent economy an economy that. apparently is so good that many voters. are yearning for it again. today but his approval ratings were. never over 50% there's nothing like that. in the longer term historic record right. that's something that's very different. that we see today that we haven't seen. in the past and it's a sign that there. are other things that are shaping.

political opinions about the president. that just didn't exist decades ago now. some of that could be about the. specifics of Donald Trump or Joe Biden. or Barack Obama but when it happens now. for three straight presidents that's. when you start to wonder whether it's. not really about anything about them but. something deeper happening in American. politics I just want to be clear so over. the last three. presidencies Biden Trump Obama you're. seeing more and more of a disconnect.

between the health of the economy and. the president's approval ratings which. used to be a lot more of a kind of on. toone relationship economy was good. approval ratings good economy was bad. approval ratings bad you're saying that. relationship has kind of ruptured a. little bit it's not just ruptured it's. almost gone over the last three. presidents well why is that I mean what. explains why this economic relationship. to presidential approval ratings is.

evaporating well in a certain sense the. answer is obvious you know it's that we. live in a more polarized country that's. deeply divided on a pretty long set of. ideologically charged issues that voters. care a lot about going back to the. example about Donald Trump I don't think. that our listeners should have any. difficulty imagining all of the reasons. why voters disapproved of Donald Trump. even though the economy was good there. were his views on immigration there was. his conduct in office there's also just.

the general backdrop of deeply polarized. country where there are far fewer. persuadable voters there are things like. this for Joe Biden as well there are. voters who have a lot of skepticism. about his age there are people who are. concerned about his stance on Israel. there are people who are concerned about. immigration and the Border there's a lot. of different reasons why voters can. disapprove of Joe Biden even though they. think that the economy is pretty decent. and indeed in 1948 for what it's worth.

Harry Truman had a lot of issues like. this Civil Rights was becoming an issue. in 1948 the first Israeli Arab war and. Israel's existence was also in 1948 but. the number of Voters who care about. these issues and now vote on them is. much higher than it used to be H in a. polarized America where perhaps a more. and more nationalized and partisan media. exists what you're describing is an. environment in which non economic issues. become more Central to people's identity.

more Central to how they vote yeah and. you know it's worth thinking about a. sociological element here too which is. that Americans are much more affluent. and highly educated than they were in. 1948 back in 1948 fewer than 10% of. Americans had graduated college and most. people didn't have deeply informed views. on these kind of Arcane social issues. they might have had some view but it. wasn't nearly as important to them as.

getting their weekly paycheck and. providing a basic standard of living for. their families and today in 2024 more. than 40% of Voters will come from. households making more than $100,000 a. year this combination of material. affluence and high. education creates a set of conditions. where voters have the privilege as. people like to say the luxury right the. luxury of voting on non-economic issues. and the. knowledge of the issues that would allow.

them to care about them to treat. politics like a sport and to Value these. kind of ideological questions more than. they would have in the past okay so who. in. 2024 given everything you just explained. does the economy matter to most well. everyone cares about the economy a. little bit right but not everyone has. the luxury to care about other issues. and not everyone. has deeply well-informed views of those.

other issues like abortion or the border. and so on and the people who care about. the economy but don't have the same kind. of ideological politics tend to be. working class it's not that there's no. one who's workingclass that cares about. these things of course and it's not that. everyone who's highly educated and Rich. cares about abortion but you're much. more likely to be persuadable on the. economy if you have lower educational. attainment and you have lower levels of.

income okay so you're saying unlike. presumably 1948 today there are just. fewer voters who are persuadable based. on economic issues alone or primarily. and the ones who are tend to be lower. income and have lower education levels. so I guess the question is are those. voters even really available to. President Biden because we tend to think. of them as Trump voters is that. understanding correct yeah that's.

absolutely right I mean Donald Trump's. political strength is among working. class voters and then on the economic. issue in particular he's always had an. advantage over Joe Biden on who would. handle the economy best and you know we. haven't said this explicitly but it's. worth noting that there are a lot of. polls showing Joe Biden really weak. among low-income voters and that. shouldn't be too much of a surprise. given his poor economic ratings and the. basic theory of modern politics that. I've outlined to you but Democrats.

usually do best among low-income voters. so if the economy turns around you're. hoping if you're Joe Biden that you. start to do better among those lowincome. traditionally Democratic voters the sort. of people who voted for Harry Truman in. 1948 who are voting for the Democrats. because they thought the Democrats were. the party of the working class and were. good for their material interests got it. so you're saying yes these voters have. tended to vote for Trump in the past but. that's not set in stone they are. potentially persuadable and in fact an.

improving economy could bring them into. Joe Biden's Camp that's right an. improving economy could change the math. here the risk for Donald Trump is pretty. serious if the economy becomes less. important to voters then his biggest. Advantage goes away among the group he. usually counts on in order to win. elections Donald Trump's going to win. voters without a college degree no. matter what happens right I'm not saying. that Joe Biden's going to go and win the. white working class or something like. that but whether Donald Trump can. generate huge margins among that group.

whether he can keep gaining among that. group that's what keeps him in the game. that's what gives him a chance to win. the election what I think is interesting. is we're seeing an awareness already. from Trump that this is a problem for. him you know the other day he said. something about how some of the recent. gains in the stock market we've seen can. actually be attributed to the polls. showing him in the lead that's the sort. of thing you say when you know the. economy is really important to you and. you want make sure that if it is. improving Joe Biden doesn't get credit.

for it right I think what he said. specifically was that the rising stock. market was a trump stock market because. it was a stock market reacting to the. assumption that he would win which felt. like a little bit of a stretch but what. you're saying is that is a sign that. Trump recognizes that a kind of rising. economic Fortune for Biden is bad for. him and he needs to come up with some. sort of plan to do something about it. and that's a struggle yeah I mean it's. almost better than any consumer.

sentiment PLL that we've got right I. mean if Donald Trump knows that he can't. pretend like the economy is bad that. says something about how credible he. thinks that side of the argument is. fascinating so really just to return to. our 1948 example for a moment the. difference with today is the scale of. Voters who may be persuaded based on. economic conditions in 1948 a whole lot. of Voters felt much happier by the time. the election rolled around and so that. may well have convinced. a lot of them to reelect Harry Truman.

and sway the election in his favor today. that number of people who can be. persuaded by the economy alone is a lot. smaller as you've explained but both. candidates would still love to have. their support especially in a close race. which we expect to have so what we're. likely to see now if the economy keeps. improving is a pretty robust fight and I. guess we're already starting to see it. over who should get the credit for it. Biden or Trump yeah I think we could see. something like that but look Biden is.

likely going to get the credit for an. improving economy not Trump Biden's the. president Trump can try and spin the. stock market all day but that's going to. be a tough sell for the American people. I think that if you're Biden if the. economy continues to improve that's. probably going to help him to some. extent or another it could even be the. foundation for his. re-election but remember we're talking. about a persu able group of Voters not. single isue voters we can't assume that.

just because the economy improves it. means Biden's going to win there are. other issues that can sway these voters. the Border Biden's age the war in Israel. or something else it's not so simple as. to say that their vote will be dictated. exclusively by the economy but I think. it's fair to say that with all of the. huge issues that Loom over the country. today and how polarized our country is. that an improving economy may not be the. the same kind of wind in Joe Biden's.

sales that it was for Harry Truman in. [Music]. 1948 well Nate thank you very much for. the history lesson and the analysis we. appreciate it thanks for having. me we'll be right. back. here's what else you need to know day.

over the weekend the United States and. its allies carried out a barrage of. attacks on Iranian forces and the. militias they support the strikes began. on Friday targeting sites in Syria and. Iraq in response to attacks that killed. three American soldiers in Jordan and. injured at least 40 more US troops the. attacks continued on Saturday and Sunday. with us strikes against dozens of.

Targets in Yemen controlled by the. Iranian backed houthi militia which has. continued to threaten global Shipping in. the Red Sea while the United States says. that it is not looking to widen the war. in the Middle East the strikes over the. past 3 days represent a clear escalation. that American officials said was far. from over so I don't have anything to. share with you today un precisely. who was taken out in those strikes but I.

would just say that the president was. clear when he ordered them and when he. conducted them that that was the. beginning of our response and there will. be more steps to. come and in the first Democratic. presidential primary President Biden. thoroughly dominated his rivals in South. Carolina winning more than 96% of the. vote Biden's campaign team was AAL. especially interested in the turnout of. black voters who poll show are less.

enthusiastic about him than in the past. Biden's AIDS said that early data from. Saturday's primary showed that the share. of black voters in South Carolina was. 133% higher than in. 2020 today's episode was produced by. Alex Stern muj Z Claire tennis and Mary. Wilson it was edited by Devin Taylor.

with help from Patricia willins was fact. checked by Susan Lee contains original. music by Rowan misto and Marian Lozano. and was engineered by Chris Wood our. theme music is by Jim runberg and Ben. lurk of. [Music]. wonderly. that's it for the daily I'm Michael.

borro see you. [Music]. tomorrow.