Remembering the False Gloom and Doom of the 1992 Elections—and the Upcoming Midterms

Victor Davis Hanson
American Greatness

In 1992, Bill Clinton won the presidential election partly on the basis of his campaign’s false accusation that George H. W. Bush had overseen “the worst economic performance since the Great Depression.” Or so claimed Clinton’s running mate Al Gore.

James Carville, chief campaign adviser to Clinton/Gore, amplified that message with the constant refrain: “It’s the economy, stupid.”

That strategy worked for three reasons.

First, third-party candidate Ross Perot siphoned off nearly 19 percent of the vote. Most of his supporters would otherwise likely have gone to Bush. Perot allowed Clinton to win with a mere 43 percent of the popular vote, in part by echoing the false narrative of a crushing Bush recession.

Second, the brilliant Bush campaign strategist Lee Atwater, who had virtually destroyed the Dukakis campaign in 1988—remember the tank ad, the Boston Harbor ad, and the Willie Horton ad?—had died in 1991 at the age of 40 from a brain tumor.

Atwater’s canny but hardball 1988 tactics had turned off establishment Republicans. So in 1992, Republicans reverted to the notion of losing nobly rather than winning ugly and resumed unilaterally playing by the Marquess of Queensberry rules. The result of Democratic demagoguery was that the sober and competent elder Bush was branded a heartless elitist who had wrecked the economy and defended Kuwait only for “blood for oil.” And without Atwater, the Bush team utterly failed to refute such caricatures and counterattack.

Third, and most important, the anemic Bush reelection campaign never refuted the Clinton-Gore economic hysteria. That “recession” deception had drowned out the historic foreign policy achievements of Bush’s four years, from the successful policies that followed the fall of the Berlin Wall in 1989 to the decisive 1991 Gulf War.

Despite overwrought claims about a recession or even a new Great Depression, in truth, the recession had ended in March 1991. In fact, final GDP growth for 1992 was a robust 3.52 percent. That was hardly a recessionary indicator. Indeed, the election-year growth proved even stronger than in Clinton’s first year of governance in 1993.

While unemployment was still high at 7.5 percent, the 1992 stock market nonetheless grew by 7.6 percent. And the 1992 inflation rate had stayed moderate at 2.9 percent.

In other words, the economy had already begun to recover from the 1990–91 recession, which—to reiterate—had officially ended 20 months before the 1992 election.

One cause—eerily now familiar—of the earlier 1990–91 downturn was that oil prices had initially doubled after the 1990 Iraqi invasion of Kuwait and the U.S. military response. But prices collapsed as soon as Operation Desert Storm began, despite the later torching of the Kuwaiti oil fields and continued uncertainty in the Gulf. Yet by the November 1992 election, oil prices had long been back to pre-invasion levels.

In short, the Democrats’ charge that 1992 saw the worst recession in 60 years was absurd. (The 1973–75 and 1981–82 recessions were far worse than the 1990–91 recession.)

Fast forward to the present. The economy today is far better than in 1992. But Democrats’ successful 1992 demagoguery should remind Republicans that the perception of the economy peddled by campaign rhetoric can often decide elections more than the reality does.

Take the just-released 2025 poverty rate. It hit an all-time low of 10.2 percent. Child poverty also fell to a historic low. Such amazing news refutes wild leftist charges that uncovering vast welfare fraud, deporting thousands of illegal aliens, and cutting 400,000 federal jobs would spike poverty. In fact, those actions more likely contributed to reducing poverty, as did an astounding lowest violent crime rate in some 70 years.

Median household income also hit a record high of $87,460. That is the highest median household income in the world, dwarfing all other large industrial nations that are not petro-states or tax havens. The same holds true for our GDP per capita—which, incidentally, was already over $34,000 higher than in Canada.

New business reports show that this past August manufacturing achieved its largest monthly increase since 2022. And service-sector growth jumped to its highest level since 2021. New orders for metals, machinery, computers, appliances, communications—in truth, almost everything—continue to rise every month, especially and most recently in August.

Despite the Iran war and its global petroleum interruptions, the Atlanta Federal Reserve now predicts that third-quarter GDP growth will finish at a blistering 5 percent. The Dow and the S&P have grown by a strong 8.1 percent and a staggering 13.5 percent, respectively, in 2026.

Take away the climb in gas prices from a January 2026 average of $2.81 a gallon to $4.50, and the inflation rate was only 2.5 percent—below the 2025 yearly average of 2.7 percent—and Wall Street estimates put the annual rate at around 2.2 percent once the Iran war ends and a huge influx of oil hits the global market. The United States is now the greatest producer of oil and the greatest producer and exporter of natural gas in history—and is still increasing output.

August unemployment was a low 4.1 percent, while 162,000 new jobs were created in that month alone. Consumer spending remains strong.

The U.S. economy is entering a boom cycle. Its growth ensures that it remains the largest in the world and continues to outpace all competitors.

Many of the dire predictions at the millennium about the supposedly superior collectivist paradigm of the European Union—or the inevitable rise of a China of 1.4 billion people—surpassing the United States simply did not come true.

The EU has about 100 million more people than the United States. China’s population is four times larger than America’s. Yet both have fallen further behind the United States in terms of economic production.

Indeed, the U.S. economy is roughly $10 trillion larger than either China’s or the EU’s. Far from some predictions of a decade ago that within 10 years China would overtake the United States, the opposite has occurred. America’s nominal GDP of $18.8 trillion in 2016 soared to $32.4 trillion in 2026—as the American share of global GDP increased to 26 percent. In contrast, the EU’s share of global GDP actually shrank, and China’s still stayed well behind the United States.

In key categories such as digital media, software, AI, bioengineering, and space technology, American companies remain the world’s largest and most successful. They usually dominate global top-ten rankings, with eight or nine U.S. corporations among the top slots.

If the Republicans broadcast this positive news about the economy, it will in turn complement Trump’s unambiguous foreign policy successes, which are largely underappreciated, if not unknown, among the public.

But they remain impressive: the rebooting of NATO by getting its members to rearm and take up their fair share of collective defense; the acquisition of new treaties ensuring an American military presence in the Greenland to monitor the contested Arctic; the radical transformation of much of the Western Hemisphere from leftist and anti-American nations into pro-American, tough-on-crime, free-market countries; the expulsion of the Chinese bad actors from the Panama Canal and the extradition of the anti-American communist Maduro from Venezuela; the restoration of Pentagon recruitment; and the change in Pentagon procurement to emphasize quantity of weaponry along with quality.

The verdict on the unpopular war against the Iranian theocracy is still out. But the idea that the last seven months of on-again, off-again strikes and negotiations amount, in terms of human and material costs, to a “forever war” is absurd and a lie.

While all our soldiers’ deaths are tragic, the conduct of the war against the terrorist powerhouse of the Middle East had deliberately been waged to limit the loss of American lives. Indeed, the average daily fatality rate due to accidents in all branches of the military during the seven months of the Iran conflict is some eleven times greater than the number of those killed fighting Iran.

The roughly $40 billion cost of the war so far, while substantial, amounts to about 25% of the conservative estimates of recently discovered welfare corruption and fraud in California alone—involving theft of Medi-Cal, unemployment insurance, in-home services, and hospice funding.

The war will be judged by historians, fairly or not, on whether it delays for years or, if not, ends Iran’s quest for nuclear weapons altogether, and on whether it so weakens the theocracy that it permanently loses its terrorist leverage over the Middle East—if not eventually implodes from popular resistance. If such a regime collapse should follow the conflict, the Middle East miasma of the last 70 years would largely end, marking the most profound American achievement abroad since the fall of the Berlin Wall.

So much is at stake.

Nevertheless, the Republicans have not yet developed a strategy to inform the public that the economy is sound and improving—and will likely soon take off, after the Iran conflict is over, oil becomes plentiful again, and tax cuts, foreign investment, deregulation, and productivity gains from AI take their full effect.

Most importantly, Republicans have still not articulated why the “affordability” issue persists. Under Joe Biden, average prices were nearly 21 percent higher than when he took office, with a yearly average increase of more than 5 percent.

The Trump administration nearly halved that annual rate in 2025. It will reduce Biden’s yearly inflation rate substantially again in 2026.

But neither Trump nor any other president could or would wish by design to engineer radical deflation to restore prices to the pre-Biden levels of 2020 during Trump’s last year in office.

Trump’s first-term total four-year inflation rate was under 8 percent, averaging about 2 percent per year—far less than half the yearly inflation average of the subsequent Biden years.

In 2025, wages still climbed higher than the rate of inflation. But it would require a damaging recession to undo Biden’s 20 percent rise in prices. And worse still, the cost of staples such as food, shelter, vehicles, fuel, and insurance rose nearly 30 percent over Biden’s four years.

Nor have Republicans made the easy case that the midterms are no longer merely a matter of liberal versus conservative, Democrat versus Republican, or even progressives versus MAGA.

Rather, November 3 represents normality and common sense pitted against an unrecognizable “Democratic” revolutionary party that is driven by Islamist-sympathizing socialist zealots who are not fond of the United States as it has existed for 250 years. They are not shy about planning to remake America along the lines of, at best, radical European socialism and, at worst, something resembling Cuba.

Needless to say, if they get their way, even the most lurid false liberal claims about our current alleged economic problems will pale by comparison.