This week is the first time I’ve been able to watch any of the debates for more than five minutes. The moderator of tonight’s debate brought up Reagan’s famous debate question: “Are you better off than you were four years ago?”
The answer will vary from person to person and from time to time. But the simplest way to make a snap judgement about the overall state of an economy is to look at a statistic called real gross domestic product (or RGDP) per capita. Simply put, if that number goes up, the country’s getting richer.
You may have noticed that politicians and media figures have a tendency to hyperbolize. For instance, as we close in on November, you will almost certainly hear that our economy is in the midst of, or headed for, the “worst recession since the Great Depression”–even though we haven’t had even one month of negative growth since the summer of 2001. A recession requires at least six.
The debate was making me nauseous, so I looked up some economic growth data. Always does the trick. I wanted to see how many times RGDP per capita in a presidential election year had been lower than in the previous presidential election year. I expected that it wasn’t nearly as often as people might think.
According to the Bureau of Economic Analysis and a website called EH.net, the last time an election-year-economy was worse than the previous election-year-economy was in 1948 (“Dewey defeats Truman!”), a year after what actually was the “worst recession since the Great Depression.” From 1944 to 1947, there was a 12.8% drop in RGDP per capita. Before that, it was 1932, the first election after the Great Depression began. Before that, 1908.
Think about that: just three times in the last century has the overall answer to the above question actually, statistically-provably been “no.”
Of course, people don’t usually vote by comparing their current status to their status four years ago–our “economic memory” isn’t long enough, and our current direction matters more. But next time you hear that “worst economy” line, kindly tell the speaker to shut up.