Will Obama be reelected? The economy could hold the answer
By Karen Tumulty,
Will Barack Obama’s fate be written in the numbers?
A 513-point plunge for the Dow, followed a day later by a drop in the nation’s credit rating.
Home values worth one-third less than they were five years ago.
The share of working-age Americans in the labor force — at just 58 percent — lower than it has been since 1983.
Growth under 2 percent, so sluggish that a second dip into recession looks distinctly possible.
That kind of economic data amounts to a formidable headwind for any incumbent president hoping for a second term. And Democrats are worried that time could be running out to change the direction of the gale.
“The good news for the president is that the election isn’t taking place today,” said Democratic strategist Mark Mellman. “But if people look forward and see what they see today, it’s going to be difficult. The most important thing to do is change the circumstances on the ground, and that’s also the hardest thing to do.”
Campaigning in last year’s midterm elections, Obama argued over and over again that Republicans had driven the economy into a ditch; from now going forward, the question will be why he hasn’t towed it out.
If past elections are any indication, strategists and political scientists say, Obama has a limited amount of time — perhaps until next summer — to do that.
By the final months leading up to an election, voters have already decided how they feel about the outlook, said Robert J. Shapiro, who was the top economic adviser to Bill Clinton in his 1992 presidential campaign. He currently heads an economic consulting firm.
Democratic pollster Geoff Garin said his recent focus groups among swing voters suggest that they understand the intractability of the problem, but are also impatient.
“Nobody blames him for the country’s economic problems, and they are still willing to be hopeful about Obama, including hopeful about his ability to move the country in a better direction,” Garin said. “But against that, people truly are frustrated with the slow pace of change, and they don’t see enough signs at the moment that we’re on a path that will lead to better days.”
Refocusing on jobs
The White House has said that it will be pivoting to put all of its focus onto the economy and jobs. But the narrative of Obama’s presidency has been that other things — most recently, the protracted negotiations over the debt ceiling — keep interrupting that story line.
And there is always the possibility of the setback of a foreign shock, perhaps from Europe’s debt crisis.
Meanwhile, Obama will be sharing the political stage with GOP opponents, who will be lobbing their own criticisms.
“Today’s unemployment report represents the 30th straight month that the jobless rate has been above 8 percent,” former Massachusetts governor Mitt Romney said Friday. “When you see what this president has done to the economy in just three years, you know why America doesn’t want to find out what he can do in eight.”
Exactly what Obama could do to change the course at this point, however, is difficult to figure out.
Cuts vs. growth
The political exigency of cutting government spending, which drove the debt-ceiling negotiations that took the country to the brink of default, runs exactly counter to what many economists say would help boost economic growth in the short run.
So the president is left arguing for measures that could help around the edges in the near term — such as extending the payroll tax cut and emergency unemployment benefits that are set to expire in December.
One worrisome sign for Obama: In only two presidential election years since the early 1950s have the consumer confidence indexes been as low as they are today. Those two years were 1980 and 1992, which also happen to have been the only two when an elected incumbent was defeated.
Choices and correlations
Of course, every election has its own set of issues and personalities — and in the end, every one is a choice between two candidates.
But scholars have found correlations between a president’s economic performance and his electoral one.
One that has gotten wide credence among political scientists is the so-called “Bread and Peace” model designed by Douglas Hibbs of the University of Gothenberg in Sweden, which finds that a president’s reelection prospects are tied to growth in disposable income and the number of military casualties resulting from U.S.-initiated foreign conflicts.
“If I had to bet today,” Hibbs said, “I’d bet that he will lose.”
Ray Fair, a Yale University economics professor who has developed another well-known model for predicting election outcomes, has also grown more pessimistic about Obama’s prospects.
“He’s got to get going pretty quickly,” Fair said. “Other than working on the payroll tax, he’s probably not going to be able to do much between now and the election to affect the economy, as a practical matter.”
Wall Street ended flat on Friday, which actually was good news, given its swan dive the day before. And the government announced some more hopeful signs: a dip in the unemployment rate and the news that the economy had added more jobs than it had since April.
But even as Obama pointed to that slight break in the clouds on employment, he noted: “We have to create more jobs than that each month to make up for the more than 8 million jobs that the recession claimed. We need to create a self-sustaining cycle where people are spending, and companies are hiring, and our economy is growing.”
And for his own sake, he’d better do it soon.
Staff research editor Alice Crites contributed to this report.