Electoral Misers

Early last year, George Bush enjoyed an 88-percent approval rating, but by last summer conservative pundits were urging the president to prevent an embarrassing loss and drop out of the race. University of Chicago business professor Sam Peltzman suggests a simple reason voters turned against Bush: He is a profligate spender. An electoral model spelled out by Peltzman in the May Quarterly Journal of Economics predicts that any incumbent who followed Bush's spending policies during an economic slowdown would face a serious backlash from voters.

Peltzman reviewed all the presidential, senatorial, and gubernatorial elections from 1950 to 1988 and set up an equation that attempts to predict which lever a "marginal" voter will pull. He concluded that, while incumbents do have an advantage over challengers (the incumbent's party starts with a 6.3-percentage point lead in presidential races), bungled fiscal policy can wipe out that edge, especially in bad economic times.

The Bush administration increased spending by 37 percent. Using the coefficients in Peltzman's study, these spending increases (given the sequence in which they occurred) would cost Bush 15 points in the polls, more than eclipsing his initial 6-point advantage.

Rising unemployment also hurts incumbents. During the second Reagan term, the unemployment rate hovered around 5 percent. But unemployment in the Bush era has risen steadily, reaching 7 percent at the end of last year; this pattern could clip another 7 points or so from Bush's vote.

Peltzman challenges the conventional view that presidents can "buy" votes, as Bush tried to do, with pork-barrel programs just before an election. Instead, he writes, voters tend to "punish spending in the last two years of a President's term and basically ignore the rest."

Moreover, "voters do not much care how the Federal government allocates its spending….Basically, every extra dollar is equally bad."