September 5, 2012
The numbers don’t lie for President Obama—the economy and the deficit are an albatross for his campaign, in some ways the difference between his 2008 blowout and his slog this year against Republican nominee Mitt Romney.
The Democratic National Convention in Charlotte gives Obama three days to fortify this weak spot in his campaign—one shaped as much by the response to the 2008 financial meltdown as the mud slinging of the presidential election.
Gallup gave Romney a 52 percent to 43 percent edge over Obama on the economy at the end of last month, largely unchanged from the results of its July survey. The former Massachusetts governor enjoyed a 54 percent to 39 percent advantage on the budget deficit. A rolling survey by Reuters/Ipsos tracking the political conventions reported on Sunday that 84 percent of independent voters—and 59 percent of Democrats—believe the national economy is on the “wrong track.”
These chasms mean Obama and his fellow Democrats must find a way to put the 8.3 percent unemployment rate, the relatively flat to falling wages, and the four years of $1 trillion-plus budget deficits in a more favorable light, or, at least, a less negative glare. They are wrestling with how best to answer the question recently asked by vice presidential candidate Paul Ryan—and borrowed from Ronald Reagan’s defeat of Jimmy Carter in 1980: Are you better off than you were four years ago?
Not every poll shows as wide a gap, but all of them reflect an unnerving explanation for why the race is within the statistical margin of error: the debt piling onto federal balance sheets under Obama failed to power a solid recovery from a recession that technically ended three years ago. And the news turned bearish on Tuesday—with declines in both construction spending and a key manufacturing index—shortly before the release of the August jobs report at the end of this week.
So how does Obama try to finesse the bad economy? Because politicians often test market their convention speeches in smaller venues, here are three possible explanations gleaned from recent statements by the president:
Blame George W. Bush – Slightly more than half the country still faults the retired president for the troubled economy, according to an August poll by ABC News and The Washington Post. Just 32 percent attribute the problems to Obama, compared to 54 percent who assign responsibility to Bush—roughly the same breakdown in guilt as found by an earlier version of the survey at the start of the year.
The task is for Obama to effectively tie Romney to Bush, a process made slightly easier by their shared philosophies and economic advisers—Glenn Hubbard and Greg Mankiw both counsel Romney and served as chairman of Bush’s Council of Economic Advisers.
During a Sunday speech in Colorado, Obama implied that Romney’s plan to chop top marginal tax rates by 20 percent was a rehash of Bush-era policies that produced little growth.
“Everything you heard from them –what little you did hear—we’ve heard before,” he said. “They have tried to sell us this tired, trickle-down, you’re-on-your-own snake oil before. Those ideas don't work. They didn't work then, they won’t work now. They did not create jobs. They did not cut the deficit. They did not strengthen the middle class. They are not a plan to move this country forward. “
Feel Their Pain – The same ABC News/Washington Post poll found that Obama “better understands the economic problems people in this country are having” than Romney does. Cue the Bill Clinton imitation.
Obama can build on his 49 percent to 37 percent lead by playing the empathy card just like he did at the University of Virginia last Wednesday. Romney attempted a similar feat at the Republican National Convention that same week, so it’s really a test of which candidate delivers the better appeal.
“Are we going to make sure that an honest day’s work is rewarded, so that somebody who really works hard, they can afford to have their own home, and they'll have health care when they get sick, and they'll be able to retire with dignity and respect?” Obama said in Virginia. “Are we going to make sure that not just you but folks who follow you can afford to get a college degree and are able to pay off their student loan debt?”
Highlight the Auto Bailout – A survey conducted in July by Quinnipiac University uncovered that Obama fared slightly better than Romney on economic issues in Ohio. This swing state is among the centers of the automotive industry—so the president is emphasizing the resurgence of Chrysler and General Motors after the government rescue.
At a Labor Day speech in Toledo, Obama lashed into Ohio Gov. John Kasich who celebrated the Buckeye state’s comeback at the Republican convention while simultaneously slamming the administration.
“If it’s all Obama’s fault and nothing is going right, what’s going on in Ohio?” the president said on Monday. “Now, I guess the theory was that it’s all the governor’s doing. But I think we need to refresh his memory -- because a lot of those jobs are autoworker jobs like yours. The American auto industry supports one in eight jobs in this state. And just a few years ago, when the auto industry was flat-lining, what was in his and Governor Romney’s playbook? ‘Let Detroit go bankrupt.’ You remember that?”
Obama was referencing the headline of 2008 op-ed by Romney in The New York Times that argued for a restructuring of the auto sector led by private industry. But if Obama is going to attack Bush-era policies for the state of the economy, then this narrative complicates his case. The auto bailout began under the Texan president and was then implemented by Obama.
Of course, the economy is more than a political inconvenience for Obama. The nation essentially rests at an economic crucible about whether the prosperity enjoyed after World War II can endure.
High unemployment over a long period erodes the potential of the economy to grow, as does the steady accumulation of government debt economistDouglas Holtz-Eakin, an adviser to Arizona Sen. John McCain’s 2008 presidential campaign and president of the American Action Forum, wrote Tuesday.
“If we've done the math right, today the federal government will announce that gross federal debt has climbed past $16 trillion, larger than GDP and well above the 90 percent of GDP that research show is the critical level,” Holtz-Eakin said. “Above that line, countries typically suffer growth slower by 1 percentage point per year — about 1 million jobs at present.”