A Presidential Election Campaign Heats up as America’s Economy Cools Down

June 6, 2012 5:02 pm

After months of campaigning and mudslinging, the Republican primary race is over. Former Massachusetts Governor Mitt Romney will challenge the incumbent President of the United States of America, Democrat Barack Obama, in this November’s presidential election. Romney’s decisive win in last week’s Texas Republican primary pushed him above the 1,144 delegates required to win his party’s nomination. Yet, well before last week’s primary, and its subsequent solidification of Romney as the GOP nominee, both the Romney and Obama campaign machines were already fully engaged in general election mode. It comes as no surprise since the stakes could not be much higher than they already are.

This is especially true for the incumbent president due to the negative economic data released at the end of last week. In

A trader reacts to the bad news on the floor of the New York Stock Exchange (NYSE).

the month of May, American stock indexes experienced their worst monthly returns in two years. The Dow Jones Industrial Average lost 6.2% while the Nasdaq declined by a more troubling 7.2%. As bad as these numbers are, even worse for an incumbent president of any party is the unemployment data which, to make a rather modest understatement, is not working in Obama’s — or, for that matter, his party’s — favor. In a country of roughly 314 million people, the American economy created a mere 69,000 jobs in May which is the worst job growth number in a year. To make matters worse for Obama, based on these figures, the national unemployment rate will increase from 8.1% to 8.2%. That rising 8.2% unemployment rate is a rather conservative estimate since the actual unemployment number which includes those who have given up looking for work is well into the double digits. Similarly, the number of Americans who have been unemployed for more than half a year is also on the rise. In fact, the number of long-term unemployed Americans rose by 300,000 in the month of May, jumping from 5.1 to 5.4 million individuals. This category of long-term unemployed accounts for close to half of all the unemployment in America. Given the negative numbers, it is clearly not yet “morning in America” nor, should trends continue, will it be “morning in America” by election day on the first Tuesday in November.

President Obama faces an uphill battle to win re-election in light of such anemic economic numbers. In fact, no president in more than seventy years has won a second term with unemployment above 7.2%. Democrat Franklin Delano Roosevelt was the last man to return to the White House with unemployment rates above this threshold back in 1936, a time when a gallon of gasoline cost about 10 cents and the average single family home sold for less than $7,000. Also, recent opinion polls are reflecting the president’s precarious position. He is locked in a dead-heat with Mitt Romney six months before election day, a time when most incumbent presidents benefit from double digit leads over almost any challenger whether Democrat or Republican. In other words, due to the worsening economy at home and the economic woes of the European Union, Obama may well not enjoy the many benefits that normally fall to an incumbent president.

Republican presidential candidate Mitt Romney

This is good news for Romney who, prior to serving as the Governor of Massachusetts, worked as a successful businessman and private equity manager. Romney has built his campaign platform on the premise that the best way for the American economy to enter a sustained recovery and for America to prosper is for it to be governed by someone familiar with the inner workings of the private sector. Romney is presenting himself to American voters as the candidate who has a successful track record of creating wealth and boosting employment rather than someone who was involved in community organizing, writing memoirs and teaching law at America’s Ivy League universities. Today, this message seems to be resonating with many Americans. When respondents are polled about who could do a better job turning the American economy around, Romney consistently beats Obama by a healthy margin. However, Romney’s apparent disconnect with many American voters, as well as the Tea Party’s lukewarm perception of his less stringent conservative values (based upon his past positions on various socially-charged issues from abortion to climate change), continue to be the political albatross that hangs around Romney’s neck preventing him from gaining further popularity with many Americans. In contrast, Americans prefer Obama over Romney when it comes to personality.

Personality aside, most American elections are won or lost on economic grounds. In a television advertisement aired during the 1980 presidential election, then Republican candidate and former California Governor Ronald Reagan asked a question that will likely drive this November’s election. Speaking from behind a podium, Reagan asked the American people, “Are you better off than you were four years ago?” In 1980, America was stuck in a deep recession and the stagnant economic policies of Democrat President Jimmy Carter were the catalyst for a landslide victory for Reagan and his party. Reagan advocated that the best way for the United States to regain its economic might was to elect a government which was run using the same tools as those used to successfully run a private sector company — the private sector being an environment in which government regulations, mandates and other forms of intervention generally slow economic growth.

Thirty-one years later, America is again unable to move out of a lingering recession. While the 2008 recession did begin with a Republican in the White House, the fact of the matter is that today there are still some five million fewer jobs in the American economy than there were before September 2008 and any president — whether Republican or Democrat — will face the American public’s anger given such a negative trend. Consequently, the race for the White House will be run on a state-by-state basis where both candidates will attempt to frame themselves and their parties as being best able to fix America’s ailing economy whilst still broadcasting a message of national unity. Yet, some states will likely be given more weight than others by both the incumbent president and his Republican challenger. These “battleground” or “swing” states such as Indiana, North Carolina, Virginia, Florida, Ohio, New Hampshire, Pennsylvania and Wisconsin could very well determine whether or not the president will continue to enjoy public housing in the White House for four more years or if Romney will move from Massachusetts to Washington D.C.

Given the importance of those eight states, not to mention that of the other forty-two, both candidates will likely have to perfect the art of “retail campaigning” in which politicians personally solicit votes from the public by shaking as many hands, attending as many town hall meetings and stopping at as many truck stops and coffee shops as possible. They will do so for two very different reasons: Obama, the incumbent, will have to try to distract voters from America’s lack of economic recovery while Romney, the challenger, will have to prove more attractive to average Americans.

 

 

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