From the New York Times, I'm Michael Barbaro. This is The Daily. On Friday's 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 Cohn, says that to understand the situation, it helps to look back at another election 76 years ago. It's Monday, February fifth. Nate, we just got the latest batch of economic news on Friday, which showed a surge in hiring, a very strong US labor market. 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 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. That's been really hard because 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. I did find an economic moment that actually bore a lot of resemblance to the economy today. 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. 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 like the post-pandemic economy, the post-war economy after World War II was really weird. 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%. 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. A lot of that is like what we see today. Obviously, the housing market is really tight right now. 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 the economy kept growing like it did today. There's no other example like it.

On paper, 1948 and 2024 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 fundamentally 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 good. At the time, Harry Truman was President. He was a Democrat. He took over after the death of FDR in 1945. In large part because of prices and 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%.

Well, 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. That's right next to where Harry Truman was at the time. It's worth dwelling on just how remarkable the public's dissatisfaction with the economy was. 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 mentioned this an election year. So Truman, politically speaking, is in real trouble.

Yeah, deep trouble. The Democratic coalition is falling apart. He's seen in his way in over his head. And take one high-profile example, the New Republic, then a very prominent liberal magazine, argued that he's just leave the race altogether and not even run for re-election. But of course, he doesn't leave the race. He's left facing an opponent in Republican Thomas Dewey, 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 back. Inflation plummets. Inflation is at 10% in January 1948, and it falls in half by October. And voters perceived that. They reported to posters 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. 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 they're 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? Mm-hmm. 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 Dewey all the way up until the end. Governor Thomas E. Dewey, acclaimed as the overwhelming favorite, records his own vote with calm confidence. The expectation that Dewey 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 wins. Harry Truman wins in what's arguably the most famous comeback in American political history.

So, Ned, how much is President Biden on this a Truman economic improvement, political fortune, revival path or not?

Economists 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. As I just mentioned a moment ago, inflation was still at 10% in January 1948. Inflation today is already down under 4% and may still be expected to fall heading into the election. 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 in a 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. 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. There's this sense that maybe we've gotten through the toughest part here and brighter days are ahead. These gains in consumer sentiment are broad. It's up across every age group, every income group, and every educational group. 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.

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. One of the biggest differences here is that Joe Biden owns the blame for inflation in a way that Harry Truman didn't.

Why not?

Well, 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 re-election. We'll be right back.

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. You suggested that it's not as powerful a force in elections as it had been in the past. That's surprising. Everything we have been told as political journalists and as Americans is it's the economy, stupid, right? The economy is decisive in elections. So you're just going to have to explain yourself.

The economy is absolutely a huge factor in shaping our elections still. But it's not the only thing that matters. 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.

What are those signs?

Well, one easy sign 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. That's something that's very different that we see today that we haven't seen in the past. 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. Over the last three presidencies, Biden, Trump, Obama, you're seeing more 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 one-to-one relationship. Economy was good, approval rating is good. Economy was bad, approval rating is bad. You're saying that relationship has ruptured a little bit.

It's not just ruptured, it's almost gone over the last three presidents.

Why is that? What explains why this economic relationship to presidential approval ratings is evaporating?

Well, in a certain sense, the answer is obvious. 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. 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.

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.

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. Most people didn't have deeply informed views on these 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. 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 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. The people who care about the economy but don't have the same ideological politics tend to be working class. It's not that there's no one who's working class that cares about these things, of course. 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. 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. 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. 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. If the economy turns around, you're hoping, if you're Joe Biden, that you start to do better among those low-income, traditionally Democratic voters, the 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 is going to win voters without a college degree no matter what happens. I'm not saying that Joe Biden is 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. 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 thing you say when you know the economy is really important to you and you want to 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 rising economic fortune for Biden is bad for him, and he needs to come up with some plan to do something about it, and that's a struggle.

Yeah. I mean, it's almost better than in any consumer sentiment poll that we've got. 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. 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. 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. 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 spend 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 persuadable group of voters, not single issue 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 same wind in Joe Biden's sales that it was for Harry Truman in 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 today. 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 three days represent a clear escalation that American officials said was far from over.

I don't have anything to share with you today on 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 especially interested in the turnout of Black voters who polls show are less enthusiastic about him than in the past. Biden's aides said that early data from Saturday's primary showed that the share of Black voters in South Carolina was 13% higher than in 2020. Today's episode was produced by Alex Stern, Muj Zady, Claire Tennisgetter, and Mary Wilson. It was edited by Devon Taylor, with help from Patricia Willens, was fact-checked by Susan Lee, contains original music by Roni Misto and Marion Lozano, and was engineered by Chris Wood. Our theme music is by Jim Runberg and Ben Lanfer of WNDERly. That's it for the Daily. I'm Michael Maboro. See you tomorrow.