President Trump’s two biggest headaches – the impeachment inquiry and a weakening economy – may soon intersect. No one supports impeachment because economic growth and business investment have slowed down. But waning growth deprives Trump of the argument President Clinton used so skillfully during his impeachment ordeal — namely, while his congressional opponents fixated on persecuting him, the president was hard at work successfully promoting prosperity for everyone.
Clinton’s case that he delivered good times was solid. His impeachment inquiry was triggered in January 1998 by Linda Tripp’s tapes of Monica Lewinsky; the special prosecutor and congressional Republicans spent a year sparring with Clinton, until the House impeached him in December. Throughout the year, the economy grew 4.5 percent, peaking in the fourth quarter with 7.0 percent growth just as the Republicans voted to impeach.
Everyone felt the boom. Over the course of that year, consumer spending jumped 5.3 percent and business investment soared 10.9 percent. Strong growth actually accelerated through Clinton’s Senate trial in January 1999, his acquittal in February 1999, on a bipartisan vote of 55 to 45, and the rest of 1999.
By contrast, Richard Nixon faced impeachment under badly deteriorating economic conditions. The economy was strong when his ordeal began in October 1972 with the Washington Post’s report that the FBI saw Watergate as part of a broader spying effort by Nixon’s reelection campaign. Growth remained robust well into 1973, as did support for Nixon. Just as Nixon’s fight with Special Prosecutor Archibald Cox over his tapes came to a head in the Saturday Night massacre, in Autumn 1973, growth, consumer spending and business investment all began to weaken substantially. By November 1973, the economy entered a recession that lasted through 1974 — through the epic struggle that ended in July 1974 with the Supreme Court directing the president to hand over the tapes, followed by his resignation in August.
Including Trump, three of the last nine American presidents have faced impeachment. In all three cases, the state of the economy and the president’s decisions about it have played no role in the actions that have led to impeachment. But economic conditions are part of the environment in which the American people evaluate for themselves the importance of a president’s decisions and actions.
While there are too few cases here to call it a sample, there is extensive research showing how economic conditions affect a president’s public support — and the paths of Clinton’s and Nixon’s struggles against impeachment generally followed the economy’s trajectory at the time. It is only sensible to expect that economic conditions affect the significance that people attach to the acts that lead to an impeachment, especially among people whose partisanship doesn’t determine their view of it.
The fact is, Donald Trump enters his impeachment period with economic conditions much weaker than those in place when his two predecessors’ troubles began. The economy grew 6.0 percent from mid-1972 to mid-1973, the year leading up to the start of the Watergate hearings and 4.4 percent in the year before Clinton’s dalliances went public. In the year leading up to the recent revelations around Ukraine, consumer spending, business investment and overall growth all rose barely 2.0 percent.
No one can say whether we will tip into recession while President Trump struggles to hold on to his office. But recent signs recall Nixon’s predicament. Growth depends on rising productivity and expanding employment. In recent months, employment gains have slowed, and productivity and output in manufacturing have both turned negative. According to the National Association of Business Economics, 74 percent of its members now expect a recession will begin in 2020 or 2021, citing Trump’s signature trade and tariff policies as a primary reason.
The intersection of economic conditions and impeachment also may have a feedback loop, whereby the path of a president’s impeachment affects the economy. Many studies have found that political and economic uncertainty dampen business investment, consumer spending and growth, especially if the economy is already weak. So, we wouldn’t expect to see evidence of economic impact from Clinton’s impeachment, since the outcome was never in doubt and the economy was strong.
By contrast, the economy went into recession just as Nixon’s impeachment battle got going in November 1973. His fate turned uncertain as the legal struggle over his tapes moved to the Supreme Court in June 1974. And some residual uncertainty persisted after he resigned, since Gerald Ford had become vice president barely eight months earlier, and most Americans had little sense of his goals and values.
Many factors drove the 1973-1974 recession. But its path was consistent with the proposition that impeachment-related uncertainty didn’t help. At a minimum, the third quarter of 1974, covering the Supreme Court’s order to release the tapes and Nixon’s resignation, was the worst quarter since the recession began more than a half-year earlier. In fact, business investment cratered in the third quarter of 1974 and continued to decline sharply for another six months.
Like Nixon, Donald Trump has to fight impeachment with a slow economy. For now, however, the outcome in the Senate seems assured. But if the Senate’s verdict becomes more uncertain and the economy deteriorates further, Trump could meet a version of Nixon’s fate.
Robert J. Shapiro, founder & chairman of Sonecon, served as under-secretary of commerce for economic affairs under President Clinton and was the principal economic advisor to Clinton in his 1991-92 presidential campaign.