It's The Economy, Stupid!
Those four famous words written on a whiteboard in the war room of the Bill Clinton campaign in 1992 reverberate throughout American politics. At least that's the conventional wisdom and what the Romney campaign is hoping rings true in 2012. Like it or not, President Obama has to face the fact that nearly four years after being elected he is presiding over a tepid economy experiencing weak growth and high unemployment. The most recent figures released by the government show economic growth occurred in the 2nd quarter at a meager 1.5% rate while unemployment ticked up from 8.2% to 8.3%. As Political Scientist James Campbell argues, those numbers do not bode well for the president's reelection bid. Further, a recent analysis on Political Math showed President Obama last among all presidents in job creation since 1969, based on reports from the Bureau of Labor Statistics. Of course, as everyone with half a brain knows (which excludes most politicians of both parties as well as most ideologically driven individuals), presidents neither create nor destroy jobs. They merely benefit from good economic cycles or suffer the consequences of bad ones. Recessions result from natural fluctuations in the business cycle and government is virtually powerless to prevent them. If you need evidence of this just look at 2007-09 and all the manipulations done by the Federal Reserve Bank and the tax cuts/economic stimulus packages enacted in 2008 and 2009. The economy still plunged into the deepest recession since the 1930's. At best, all the government efforts simply alleviated the suffering and made the bottom of the great recession slightly shallower than it would otherwise have been. The CBO estimates that between 1.5 million and 3 million jobs were saved by government action in 2009. Imagine what the president's record on job creation would look like without without those jobs! Which brings me back to the point...job creation.
As the author of the Political Math piece points out, President Obama is fond of pointing out the number of jobs created from a certain date, usually the low water mark of the recession. That's both fair and unfair at the same time. How so? It's fair because a new president cannot and should not be held accountable for trends in job growth/loss early in their term(s). He is inheriting the situation left behind by his predecessor, which in President Obama's case was an economy shedding 700,000 jobs a month. However, allowing the president to cherry pick a starting date for when he will take credit for job growth is unfair because he can then choose the dates most beneficial to himself. In an effort to standardize the analysis of job growth by president I created a graph showing total job creation/loss using two metrics. The first metric attributes job losses/gains during the first six months of a new administration to the previous administration, while the second metric excludes job growth/loss for the entire first year of a new administration. The logical explanation is that a president should not receive credit (or blame) for the economic situation left behind by his predecessor. Here's what the data looks like:
Using either of these metrics doesn't make the case for President Obama much better, although it shows larger net job growth than if we began counting the day he assumed the presidency, which is the way most partisan opponents of the president like to do. My point here is not to make the case for President Obama but to draw attention to the fact that job growth in the United States has been anemic for more than a decade. Also, when we look at the data, we see that job growth declined substantially on the heels of the two most recent economic expansions which took place from 1983-1989 and 1993-2000. We also can see that by either metric President George W. Bush is the only president in the last 40 years to preside over a net loss of jobs, though he should not be held accountable for job losses that occurred as a result of the September 11, 2001 terrorist attacks and the recession that followed. Though the economy was already in recession by September of 2001 it is almost certain that the terrorist attacks prolonged the recession. Excluding job losses from September 2001 to May 2002 boosts President George W. Bush to a net gain for his presidency of 38,000 jobs when the first six months are also excluded and reduces his net job loss when the first year is excluded to just over 1 million.
The data also shows us that President Obama's tenure compares favorably with that of President George H.W. Bush, using either of the two metrics. In fact, their numbers are remarkably similar, although Obama's only include seven months of data for 2012. Barring another recession and continued mediocre job growth, President Obama will end his first, and perhaps only, term in office with net job growth of between 3.6 million and 5 million, depending upon which metric is chosen. Neither number is good when compared against the last one term Democratic President, Jimmy Carter, whose presidency is seen as mostly a failure by nearly everyone except Carter himself.
Why Romney May Not Win Even Though He Should
Given the economic data, the election should be a cakewalk for Mitt Romney. Yet, he is not moving the polls and his favorability ratings continue to decline. That, in itself, shouldn't worry too many in the GOP because Ronald Reagan was elected in 1980 with favorability ratings far lower than President Carter. The bigger concern for the Romney campaign is the lukewarm support he has received from many staunch conservatives. They're just not in love with the guy and many don't trust him, which is why some demanded he fire his Press Secretary when she said that if the gentleman in the latest Priorities USA SuperPAC ad had only lived in Massachusetts he would have had health insurance. Erick Erikson (founder of the Red State blog) indicated the comment was like picking a scab and pouring salt on the wound. To be sure, Romney is no hardcore conservative himself (so might he pick one to bolster his credibility with the party?) and governed as a moderate Rockefeller Republican in Massachusetts. Could this lack of trust translate into lower turnout for the Republicans in November. Time will tell.
The other major problem facing the Team Romney is that the Republican brand has been badly damaged over the last few years, particularly since the party regained control of the House. Polls show that many voters have a negative perception of the party. Some of that comes from the contentious Republican Presidential Primary season while some of it comes from what many see as Republican intransigence and refusal to work for the good of the country. A prime example is the brinksmanship the party played in the summer of 2011 that led to the first ever downgrade in the nation's credit rating and a near default on the national debt. Even Thomas Mann and Norman Ornstein, usually reliably pro-conservative, have blamed the GOP's anti-Obama stance for much of the dysfunction in Congress. Additionally, one has to consider the kook factor. The GOP seems to have more than its usual share of crazies nowadays. When one of the most caustic and crazy in her own right Republicans, Ann Coulter, says the party needs to reign in the nuts, it must be true.
The question is whether or not any of these things will matter when voters go to the polls in November? That, dear reader, is the $64,000 question. If you have the answer you could make a fortune betting on the outcome of this year's presidential election.