Economic trends strengthen Obama’s hand
WASHINGTON — There is no doubt Barack Obama is in a tough spot. With time slipping away before November’s elections, the economy seems to keep dealing him a sub-par hand.
Unemployment, at 8.1 percent, is still high enough to induce mountain sickness, and the descent has been painfully slow.
The percentage of jobless Americans is virtually unchanged since a hope-filled Obama strode into the Oval Office in January 2009.
The seeming stagnation has left the president — now charcoal-haired — vulnerable to charges of fecklessness. To cap his woes, two thirds of Americans believe the country is still in recession (it is not).
On the face of it, the odds seem stacked against the incumbent. Yet Obama may be holding a few trump cards up his sleeve.
First, he has been fortunate where unemployment has hit.
Of nine battleground states that will decide the outcome of the election, seven have unemployment rates significantly below the national average.
In Iowa, New Hampshire and Virginia, the rates are not far from pre-crisis levels. Only in Florida and Nevada is joblessness still acute.
In the former, unemployment stands at 9.0 percent. One in every 336 homes is in foreclosure.
That is a rich seam of discontent for presumptive Republican nominee Mitt Romney to tap.
With Florida holding 29 of the 270 electoral votes needed to win the White House, the Sunshine State could prove to be electoral gold.
Yet Romney’s economic argument there is being undercut by members of his own party.
“It’s almost a paradox,” said Daniel Smith, a politics professor at the University of Florida.
“You have governors like Rick Scott, here in Florida, counting every new job created. Of course, every time he does that it points to the economy improving, and that perhaps President Obama’s national policies have had some benefits.”
“The flip side is that the Romney campaign is pushing the message that the Obama administration’s policies have failed.”
Nevada, which was also at the center of the housing meltdown, has the highest unemployment rate in the country (12 percent), but is much less likely to decide the outcome of the election.
A second strong card for Obama may be long-term demographic trends that have seen post-World War II baby boomers drop out of the jobs market at a clip.
Despite months of mediocre jobs growth, the national unemployment rate has been falling remarkably quickly thanks to people leaving the labor market.
It is a trend that Obama may be able to ride all the way to seven percent unemployment on election day.
And while half of all Americans say their first concern is the economy, debt comes in a respectable second on the list.
Although the deficit has swollen since Obama entered office, the size of the government has not. Around 600,000 government jobs have been shed during his tenure, a major reason why unemployment has not fallen more quickly.
Still, it offers Obama an opportunity to tout his cost-cutting acumen.
By one measure, he is the first president since Richard Nixon who can say he shrunk the size of government in his first three years in office.
And Obama could also get some help from an unfriendly quarter: Wall Street.
Since he took office, the Dow Jones Industrial Average has risen over 65 percent, no small issue in a country where many people find their pension tied to stock market performance.
“The president can make an argument that he has stabilized things. The bad news is that he does not want to talk too much about Wall Street one way or the other,” said Bruce Haynes, a former Republican operative now with the non-partisan Purple Strategies consultancy.
Energy markets may also help Obama.
After months of Republicans using high gas prices as a political cudgel against Obama, the tables have begun to turn.
Average US gasoline prices are down five percent from this time last year.
While none of these trends are exactly aces up Obama’s sleeve, if played well, they could yet trump Romney’s hand.