It’s not just the economic numbers that are looking up for President Obama. A new New York Times/CBS News poll puts his approval rating at 50 percent, his highest mark since May 2010 (except for a brief bump after Navy Seals killed Osama bin Laden in May). That’s a couple of points better than the RealClearPolitics average as displayed in the above chart, but the uptrend is clear.
Now, let’s assume the economy continues to grow—not gangbusters, but something along the lines predicted by economists in the recent Wall Street Journal survey. We’re talking slow-but-steady 2.5 percent GDP growth and a slowly falling unemployment rate of 8.0 percent by year’s end. That level of unemployment, by the way, is about what White House economists are predicting, along with average monthly job growth of about 167,000. Subpar numbers, but a lot better than what we saw in 2011: 1.7 percent GDP growth, average unemployment of 9 percent, and average monthly job growth of about 150,000.
With the recovery ever-so gently accelerating, what would be the Republican argument—fair or not—that Obama doesn’t deserve reelection? Maybe something along these lines:
1. Better but not nearly good enough. The pace of the Obama Recovery has been only about half that of other post-WWII recoveries. Sure, the unemployment rate has fallen to its lowest level since Obama took office. But that’s in good part due to a massive collapse in the size of the labor force, not rapid job growth. Income growth is still tepid at best. And just look at the housing market! You call this a recovery!? It’s still mourning in America, at least the part outside of Washington and Wall Street. Obama’s stagnant, declinist New Normal is unacceptable for the Last, Best Hope on Earth.
And many voters might agree. A recent survey of consumer sentiment found expectations about the job market at the highest levels in the history of the survey. There’s lots of room for disappointment here.
2. The Big Spend was a Big Bust. Obama’s policies don’t deserve much, if any, credit for the weakest economic recovery since the Great Depression. Obama’s signature economic achievement is the trillion dollar stimulus. In Money Well Spent? — The Truth Behind the Trillion-Dollar Stimulus, the Biggest Economic Recovery Plan in History, journalist Michael Grabbel notes that Vice President Joe Biden said the stimulus would “literally drop kick us out of the recession.” But Grabell concludes that the “poorly designed” stimulus “ultimately failed to do what America expected it to do — bring about a strong, sustainable recovery. The drop kick was shanked.” Indeed, it was only after stimulus money dried up that the economy began to perk up. And economies eventually will recover on their own, and recover more quickly, if government empowers the private sector rather than trying to usurp it. See: Reagan Recovery.
3. The recovery isn’t “built to last,” not with all that debt. Obama added $5.3 trillion to the federal debt to juice the economy—and this is the best his old-fashioned Keynesian policies could do? You could call it a “sugar high,” but it doesn’t even qualify as a sugar buzz, really. And now Obama wants to add another $7 trillion in a second term, according to his new budget, just to keep the wheels grinding along. The “built to last” economy is a “built on debt” economy and thus unsustainable. Just ask the Europeans.
4. Obama is President (Didn’t) Fix It. When Obama came into office, healthcare and other social insurance spending were on a trajectory to bankrupt America, banks were too big to fail, and the tax code was stifling American competitiveness. And which of these problems has been solved or substantially dealt with? None. The healthcare cost curve wasn’t bent, banks are bigger than ever, and Obama’s investment and corporate tax hikes are about manufacturing fairness rather than growth or jobs.
5. Obama wants to “win the future”—with crony capitalism. It was government meddling in the private sector that created the housing bubble and financial crisis. But rather than learn that lesson, Team Obama wants to double down on “state capitalism,” whether through new policies to try and reinflate the housing market or venture socialism/industrial policy in the “clean energy” sector.
The primary purpose of state capitalism, whether in Beijing or Washington, is to cement political power, not produce economic growth. What did Obama do after passing the stimulus in 2009? Next up was massive regulation of healthcare and Wall Street. State capitalists fear Schumpeterian creative destruction because they cannot control it or squeeze campaign contributions from it.
Economic freedom, on the other hand, creates prosperity by unleashing the imagination of the individual and rewarding his or her effort. As analyst Ian Bremmer puts it, “Creative destruction invests liberal capitalism with a self-regenerating dynamism. … Human beings value opportunities to create prosperity for themselves and their families, and free markets have proven time and again that they can empower virtually anyone.” Crony capitalism only empowers politicians, bureaucrats, and entrenched interests.
Would voters find these arguments persuasive? With the economy humming along at 4 percent growth and unemployment under 6 percent—both White House 2012 predictions back in 2009—maybe not. But in Stagnation Nation? They just might.
While it’s always good to have a Plan B, I simply don’t see the economy improving.
An economy only grows through some combination of businesses adding employees and consumers increasing their spending… and neither takes place in an environment of fear and concern about the future. And per Newton, businesses and consumers that are scared stay that way until something happens to make them change their outlook.
What has changed that will cause a single business to think the time is now right to hire someone? Or that will lead consumers to think their futures are solid enough that it is okay to increase their spending, to buy the cars they’ve been holding off from buying? If people have been worried about Europe, is there any indication that this will not be an issue in the coming months? If a business has delayed investments because of concern of higher taxes and regulations, what will have happened to make them change their mind? Are gas prices going to go back down to under $2 a gallon?
Now, it is possible that the Obama Administration will attempt to cook the books in an attempt to depict the economy as doing better than it is. But even that is likely to fail as the made-up reports are likely to conflict with what people are seeing with their own two eyes.
All good points but you seem to gloss over the whole loss of revenue through tax breaks. Plus the massive amount we spend on defense (our and foreign). And lets face it, pretending Bush didnt exist or that he was a neutral/positive influence on the economy, is why the GOP is losing/lost respect as a political party.
The democrats have their problems, same as the Grand Ol’ Party. For god’s sake though, both sides cant wait forever for the other to go first. Who is going to grow up first? Right now it looks like the democrats are in the awkward teenage years attempting to grow into this country, while the GOP seems content to try to keep it stuffed in a familiar box. WHo can blame the GOP really? I mean c’mon, who wouldnt like every money law and financial policy to be written in favor of them?
how does the unprecedented rebuke of the democrats way back, 15 months ago, in Nov 2010, fit into this fantasy analysis. pencils up!
that was really funny dude.
hey, riddle me this: hows the impending collapse of entitlement programs look for those adolescent dems? hows that gonna work out for them? ya know, short term? long term? those big ideas they have on the the most important issue of our times? i know! tax the rich. 100 bill in revenues? maybe 200? so instead of borrowing 1300 billion, WE’RE only going to borrow 1200 maybe 1100 billion! nice. and definately adolescent. peace bro.
“how the” = how does
definately = definitely
At least you’re for peace.
I hope you are right, but I am becoming increasingly pessimistic. To my mind the all-important swing voters will not be asking rational questions like what has Obama done to deserve being re-elected. Rather, Obama and his media supporters will be framing the question as: is this Republican contender really up to the job, given that his own party has already torn him to shreds and (whoever he is) doesn’t have the party solidly behind him. The Obama naif narrative of this basically good President who, if he has failed, it’s because he couldn’t get past that obstructive Congress, is also gaining traction. I just wish the Republicans would stop doing the opposition’s job of trashing each other and start focusing on Obama and why they would be the best person to replace him. For example, a promise a la Scott Brown to repeal Obamacare would get my vote without hesitation.
I just cannot fathom how some pundits see a drop in employment to the fictional 8.3% as positive, or allege that the slow rise in gas prices means people have simply adjusted to the increase by altering other spending. That other spending is on food that is much higher, health insurance that is much higher, and utility costs that are much higher. I work with people that actually do live paycheck to paycheck, and all of these issues have soured them on Obama’s policies. I know my observations may be anecdotal, but if these concerns of real Americans are expressed properly, I still believe that Anybody But Obama can prevail.
This comes down to “trust us, we’ll do a better job”.
But just how will the Republicans do a better job? There are no positive solutions given here. All the Republican presidential candidates are offering a return to the exact same policies that got the country into trouble in the first place: lower taxes for the rich and gut regulations.
And given that Republicans in congress have obstructed or watered down Democratic proposals where ever possible a more compelling argument can be made for a Democratic Senate and House that will actually legislate President Obama’s policies.
Ian, remember that for his first tow years Democrats controlled BOTH houses of Congress and look at what that got us. Obamacare shoved down out throats on a purely partisain basis. We can’t afford anymore Democrat Party ‘majority rules’ in Washington.
The vast majority of the country knows that Obama has done nothing but try and divide us for almost 4 years. He knows he can’t win on his record and the one rule of thumb, which always seems to work out is, you have to give people a reason to vote FOR you and not just why they shouldn’t vote for the other guy.
Spending millions of dollars on negative ads might get him close, but the way he’s handled being President, these past 3 years, isn’t enough to push him over the 50% mark. Look for the Democrats to try and push Ron Paul into running 3rd Party, it’s the only way Obama can win.
That the economy will shows signs of recovering is a big assumption. Especially with increased defecit spending, the threat of revenue reducing and economy slowing tax increases, the costs of Obamacare and strangling regulations I am not hopeful for economic recovery until there is a change in leadership. People are aware of the struggling economy because we live it despite what manipulated economuc numbers try to spin. This will be a regerendum on Obama’s first term where the question will be between a new direction or more of the same failed policies.
Improved economy? The author has no idea what they’re talking about. That, or they believe everything the government tells us about what a great job it’s doing for the American people…while also believing that the government is full of liars and thieves.
BDI is collapsing, labor participation rate has plummeted, downgrades left, right and center…housing and commercial real estate are still collapsing …and that’s just a start.
Hint: The markets are in another bubble, held up by one or two companies.
Cluebat number 2: The Republicans in D.C. are just a sgilty as the Democrats.
Thank you! The economy is not recovering. The numbers are being massaged to make it look like it is. Obama will continue to fudge the statistics throughout 2012. Arguing that “the economy is recovering, but…” concedes to Obama’s lies. Reps need to keep hammering away at the evidence that the economy is NOT recovering. It’s out there, if they’ll just get off their lazy duffs and find it.
Well according to the MSM, the recovery is well under way, so there’s no reason for it to be a campaign issue – Mission Accomplished!
Count on them to challenge any attempt to highlight economic performance. Obama won’t have to defend himself, they’ll do that for him.
IS THE ECONOMIC RECOVERY JUST HYPE? HINT” it cannot improve enough in 8 months
When they try to convince you that the economy is getting better, ask them these questions.
If the economy is getting better, then why did new home sales in the United States hit a new all-time record low during 2011?
Why are there 6 million less jobs in America today than there were before the recession started?
Why is the average duration of unemployment in this country close to an all-time record high?
Why has the number of Americans on food stamps increased by 3 million since this time last year and by more than 14 million since early 2009?
Why has the number of children living in poverty in America risen for four years in a row?
Why is the percentage of Americans living in “extreme poverty” at an all-time high?
Why is the Federal Housing Administration on the vergeof a financial collapse?
Why do only 23 percent of American companies plan to hire more employees in 2012?
Why has the number of self-employed Americans fallen by more than 2 million since 2006?
Why did an all-time record low percentage of U.S. teens have a job last summer?
Why does median household income keep declining?
Why has the number of Americans living below the poverty line increased by 10 million since 2006?
Why are 19 percent of all American men between the ages of 25 and 34 living with their parents?
It’s all Bush’s fault. Obama inherited everything that is bad.
With all of these numbers and facts that are not helpful to Obama, this article is clearly racist.
Don’t worry guys! The Republican house will tank the economy and bring down the President.
They’ll bring down the country too, but anything to get that nigg*r out, right?
Wow, the perfect example of socialist racism, hate and hypocrisy. You can’t defend your pathetic cause that way sweetheart.
The “improving” economy is largely fictitious.
Housing did not recover last quarter as initially reported and is not recovering now.
The lending rules are preventing credit worthy people from getting mortgages.
The “improving auto sales” is the result of shipping cars to dealers where they sit unsold. Car sales by dealers is flat.
The BLS stated when it issued the 8.3% figure that it was no comparable to the figures for 2011 because of changes in their assumptions.
Current national average for a gal of gas is $3.51 – add $0.25 for upcoming EPA changes. Then add the normal cyclical summer price increase and $4+ is pretty much a sure thing. $4 is the price at which people alter their spending in a fashion that negatively impacts the economy. Not to mention the general impact on transportation costs.
So what will the independent swing state voter believe? Manipulated numbers and a cheerleading MSM or what they see in their day to day lives? That my friends is where the $4+/gal gas price really matters. Because voters are reminded of the reality of the economy with every fill up.
Republican policies, ten years of two wars and tax cuts for the wealthy have almost driven this country into the ground. Finally things are starting to improve. Withou the stimulus the country was headed off a cliff. You idiots want to return to the same policies that got us into this mess in the first place.
If the economy recovers, it will be in spite of what 0 did, not because of it. If he had left it alone, it would have recovered a lot sooner.
a lot of scared people on here. I’m not an obama fan, but its more than just being optomistic to think he can lose this election. Sorry, it’s just the truth, i wish it wasn’t. Until the consrvatives get off their morality high horse and start dealing with actual problems they will continue to lose. Whats more important to people right now, contraception or jobs?
Economy? I’m still pissed off about Obamacare. If he’s re-elected the prospect for nullifying it are minimal.
can you imagine what Obama will do if he doesn’t have to worry about re-election?
“Tax cuts for the rich” account for a negligible portion of the deficit. The lion’s share of the red ink comes from (1) the general decline in revenues caused by the recession, slow recovery, and financial crash; and (2) increased spending.
As for the recession, I’d like to see a liberal give a reasoned argument as to how it was supposedly caused by “tax cuts for the rich.” Also, a reasoned argument that convincingly associates any specific act of deregulation for the financial crisis. (The problem wasn’t so much that regulations were “gutted,” but rather that the financial instruments and practices that blew up in our faces, were never regulated in the first place — and then Fannie and Freddie doubled down on bad lending, and the rest is history.
Capitalism will give you recessions every few years, purging out the irrationally-exuberant malinvestments. We take our bath, find a new footing, and continue onwards and upwards. To *really* nuke an economy, though, takes a government.
No one thing tanks an economy.
Tax cuts (for everyone, not just the rich) didn’t help. Especially while fighting two wars. You’re quite correct that the majority of red ink comes from the recession, but that’s to be expected in the recession when you were already running a deficit before.
Most of the regulations talk is about lack of regulations on the lendings, kind of immaterial if they existed previously or not, they should’ve is the point and the Republican party opposes such things. Deregulation and regulation are both good things if done properly. We need to stop this black and white thinking the Dems and Repubs both have people doing.
“Capitalism will give you recessions every few years, purging out the irrationally-exuberant malinvestments. We take our bath, find a new footing, and continue onwards and upwards. To *really* nuke an economy, though, takes a government.” – now this doesn’t make sense to me. The economy was already in a recession spiraling downward when Bush left, so are you saying it’s Bush’s fault?
http://dictionary.reference.com/browse/delusional
Thomas,
No one would suggest that Tax Cuts for the Rich caused the recession. The assertion is that Tax Cuts for the Rich have caused the deficit to be greater than it ought to be. If we’re now talking about reducing the deficit then it needs to be addressed from both the revenue and spending quarters. Bush’s argument when the tax cuts were being proposed was that the projected surplus was indicative of Americans being overcharged by their government. If he left office with us running huge deficits, wouldn’t that indicate that Americans are being undercharged particularly given the two wars we entered and the Medicare Part D entitlement that were not paid for?
Now, from a regulatory perspective, there are a number of regulatory failures that led to the credit crunch and recession. The first was the repeal of Glass-Steagall allowing the merger of commercial and investment banks. This allowed for the emergence of “too big to fail” institutions. Second was the lack of regulation around mortgage origination. The fact that robosigning, bait and switch mortgage rates, and lack of control of credit standards particularly after 2004 led to a huge increase in questionable loans and supercharged the housing market inflating prices far beyond reason. The third major component was the laissez faire approach to new financial instruments. Mortgage Back Securities, Collateralized Debt Obligations, and Credit Default Swaps certainly existed prior to the year 2000, but they exploded into their own market over the decade and no effort was made to control them. MBS’s and CDO’s needed rules to specify how mortgages and other debt were packaged and how credit ratings were assigned. The failure to do this resulted in bad debt instruments being given AAA ratings. CDSs needed stronger capital requirements for issuing institutions and control over how debt could be leveraged. Finally, there needed to be a plan for controlling the potential failure of these institutions. Had Bear Stearns and Lehman Bros gone through a controlled selloff instead of a bailout and a collapse the market would not have crashed so severely.
The fact is that the SEC, the Treasury, the FDIC, and the Fed had the power to control many of these factors but refused to do so because of a prejudice about the role of government and the idea that the market could best regulate itself. This incorrect belief was very clearly exposed in 2008 when the whole system nearly collapsed.
To Ryan: Get a grip! Rep. Paul Ryan presented a sound economic plan….rejected by all liberals. When we have control of congress and the W.H. this November, we’ll get this country moving in the right, fiscally sound direction.
I’m always hearing Americans talking about how terrible Obama is, he’s ruining the country. You’d think competent people would be rushing to replace him, right? Bad as he is at being President, and with how much the Republicans are salivating over the prospect of this coming election, how is it possible for them to run out the band of fools that they have? It’s like the GOP got itself all ginned up for the race, saw Obama crawling along in the ditch and itself with a comfortable stroll to the White House ahead, and promptly shot itself in both feet. What’s the deal with that?