Does the weakest economic recovery since the Great Depression mean the U.S. economy is a) no longer in need of major transformation and b) suddenly a major plus for President Obama’s reelection? Here is my pal Tim Carney from the Washington Examiner:
The notion of Romney as the most electable Republican has always been contingent on the economy being in the dumps. If unemployment is bad this fall and getting worse, history suggests that the incumbent is nearly a dead duck. In that case, the best GOP play is a safe, inoffensive Republican — and nobody fits that bill better than Willard Mitt Romney. Also, Romney can make the argument (however tenuous) that his private-sector experience will translate into job-creating success as president. But what if unemployment continues to drop? What if it’s below 8 percent come October and the payroll numbers published Friday, Nov. 2 — four days before Election Day — show things getting better?
And a similar theory is offered by Business Insider’s Michael Brendan Dougherty:
There might not be any reason for Mitt Romney to exist anymore, as a Republican candidate anyway. The entire rationale for Mitt Romney’s candidacy was that he is a “turnaround artist.” As a private-equity guy he helped make dying companies profitable again. He’s the one who saved the Salt Lake City Olympic Games from financial disaster. He helped to balance an out-of-control Massachusetts budget without a tax-raise (he did raise fees).
But it looks like the economy is already turning around. Unemployment keeps going down. Jobless claims are doing better than they have in decades. Investors are happy. At the campaign stops we’ve been at, Romney has been saying that the American economy was always going to recover, but Obama made the recession longer and more painful than it had to be. But no one will care if the recession is ending.
OK, there are two issues here. First, will the economy be strong enough in 2012 to persuade voters that America is back on track (or at least enough to give Obama another four years to complete the job)? Perhaps. A slew of positive economic news has pushed Obama’s approval rating back near 50 percent, and Intrade has his reelection odds at an even 60 percent.
But given that incumbents win some 70 percent of the time, the economy is still obviously a drag on Obama, though becoming less so of late. Moreover, voter expectations are probably running way ahead of what the reality of the 2012 economy will turn out to be. And both rising gasoline prices and the EU debt crisis could still depress economic growth.
The great Jay Cost of The Weekly Standard emails me with two great observations:
1. FWIW, the only POTUS ever to get reelected with growth as weak as the WSJ forecast is estimating was Eisenhower in 1956. Incumbent parties lost in 1948, 1960, 1968, 1976, 1992, and 2000 when the economy was as weak or stronger. And 1980 is the only postwar election where the economy was actually weaker than what the WSJ is projecting it to be, at least measuring by GDP (using real disposable income per capita, 2012 is shaping up to be the weakest).
2. My feeling at this point is that he has consolidated the Democratic vote, which over the last 25 years has had a pretty rock solid floor of 46 percent. But if you look at the RCP average and especially the Gallup poll, he isn’t doing much more than that. And this is after (a) ending the Iraq War, (b) getting some drops in the unemployment rate, (c) quiet-time vis-a-vis battles with congressional Republicans, (d) a bloody internecene GOP contest that’s damaged his likely opponent.
Color me unimpressed. And I think this summer when gas prices are up to $4, the GOP has a nominee who starts hammering him on unemployment, wages, taxes, deficits, health care, he’ll be in trouble. There is a lot of stuff to pick from — and I think the Dems have fundamentally miscalculated in terms of their economic pitch, this budget is going to kill them when the GOPers stop fighting each other. Tax hikes on millionaires and billionaires = tax hikes on small businesses. Transportation spending = pork barrel spending = crony capitalism payoffs to unions, etc.
Funky thing about Obama is that he’s never really had to face a full-blown GOP attack. He was basically unchallenged in 2004 and the disheveled McCain campaign was too incompetent to really go after him. All of that is why I think he doesn’t understand that his budget is like the exact same thing that Clinton promoted in 1993, only with a $1 trillion+ deficit.
And as to whether the U.S. economy is still in need of a “turnaround” or not, I am going answer that in a separate post.