Trouble Ahead

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JOHN JUDIS APRIL 22, 2011

Trouble Ahead

I must have seen ten articles in the last week explaining why President Obama will lose the November 2012 election; or at the least, how he could lose. Most have been by conservative pundits, but a few have also been by Democrats. I certainly agree that he could lose, but it’s a question of how. I want to consider one of these articles—by Salon’s news editor Steve Kornacki. Not because I disagree with the conclusions, or most of the argument, but because it makes the wrong use of what could be an instructive analogy to the 1992 election.

To deflate the expectation that Obama is sure to be re-elected, Kornacki points to the 1992 election. Eighteen months prior to that election, it looked like George H.W. Bush was a shoo-in, but in November 1992, he won less than 40 percent of the electorate against Bill Clinton. “It was the economy that sunk the president,” Kornacki writes. If the U.S. economy “remains lousy” next year, and if the Republicans don’t nominate someone “outside the mainstream,” then Obama, Kornacki reasons, could suffer a similar fate. I agree with the final sentiment, but not with the logic leading up to it.

If you look back at the U.S. economy in 1991 and 1992, you find something very curious. The recession took place during 1991—growth was negative that year—but in 1992, the economy grew 3.4 percent, and the unemployment rate began falling from a peak of 7.8 percent in June to 7.3 percent in October. The economy was not “good,” and there is always a lag in the public’s perception of an economic recovery; but there is still a gap between fact and perception that politicians try to fill with their version of the facts. That’s the role of politics and political campaigns.

George H.W. Bush lost in 1992 because he failed to fill that gap with his perception of the economy. He failed to convey to voters that he knew or cared about the lack of jobs. They saw him as more interested in foreign wars than in domestic distress—a point that Clinton made, but that was also hammered home by primary opponent Pat Buchanan and by independent candidate and erstwhile Republican Ross Perot. It was, above all, a political failure on Bush’s part to convince voters that he was doing something about the economy, and that what he had already done was responsible for the drop in unemployment and increase in growth.

Fast forward to Obama and the 2012 election: If the unemployment rate were to plummet—say, to 7 percent by June of next year—then assuming even a mediocre campaign effort, Obama would probably be re-elected regardless of his opponent. Conversely, if the United States plunges back into a recession because of the Republican budget cuts that Obama has agreed to, then even a semi-mainstream candidate like former Arkansas Governor Mike Huckabee could defeat Obama. But what is most likely is a situation similar to that faced by George H.W. Bush in 1992: a sluggish economy that is improving, but at a sufficiently slow rate to leave a gap between fact and perception that rival politicians will attempt to fill.

So far, Obama has not done very well in filling that gap. He has allowed Republicans to make a case that things are getting worse, and he has cooperated with them in taking measures that will actually make things worse. He has allowed Republicans to set the terms of the debate. It has been about the perils of deficits and debt. That is not just bad economics; it also leads Democrats into a political cul-de-sac.

You’d think Republicans ran on debts and deficit during the 2010 election. Some did, but most of them focused on attacking the administration for failing to create jobs and for passing a health care bill that would cut Medicare. And polls taken immediately after the election showed that the electorate was not concerned with deficits, but with jobs and economic growth. If voters were concerned with deficits, it was as a way of expressing their concern that the government was wasting their tax dollars on unnecessary programs. Here is a November 11, 2010, CBS poll taken immediately after the election:

What Should New Congress Concentrate on in January?

Economy/Jobs
56 percent

Health Care
14 percent

Budget Deficit
4 percent

War
2 percent

Immigration
2 percent

Taxes
2 percent

Education
2 percent

But for the last five months, Republicans have been harping on deficits as the cause of the economic downturn and continuing unemployment. The economy and jobs are still voters’ top concern, but in the latest Gallup poll, deficits and spending come in second. That’s not because the Congressional Budget Office suddenly found a river of red ink, or because interest rates shot up, or because the unemployment rate has gone up. It’s because Republicans have advanced the deficit as the reason for the problems in economy and jobs. They filled in the gap between fact and perception with the idea that things are getting worse and that the reason they are getting worse is because of the deficits.

I am not sure exactly why Republicans have focused on deficits. I suspect it is a combination of reasons. Some of them don’t understand modern economics; many of them want to use the peril of the deficit to justify cuts in government spending on social programs; and some of them, perhaps, want to arrest the recovery to improve their election chances in 2012. But the effect is to nullify Democrats’ ability to offer popular programs that will fuel growth, save jobs, and reduce people’s insecurity.

Obama has, sadly, bought the Republican argument for why the economy is in trouble. This week, he went to a community college in Northern Virginia to rally students there to the cause of the deficit. Here’s my expurgated version:

For a long time, Washington acted like deficits didn't matter. … And as the saying goes, there is no such thing as a free lunch. … Now, if we don't close this deficit, now that the economy has begun to grow again, if we keep on spending more than we take in, it's going to cause serious damage to our economy.

Obama has tried to carve a liberal niche within this retrograde political framework by charging that the Republican plan to cut the deficit would get rid of Medicare and would keep the Bush-era tax cuts for the wealthy. That’s all well and good, but Obama is still playing on Republican turf. And it might not work. The last Democratic presidential candidate who based his campaign on deficits was Walter Mondale in 1984. Mondale probably would have lost to Ronald Reagan in any case, but he would have won more than Minnesota and the District of Columbia. The other Democratic candidate who tried to make deficits an issue was Al Gore in 2000, and he lost to a candidate he should have defeated easily. And you can be sure that Bill Clinton in 1992 didn’t focus on deficits in running against George H.W. Bush.

I know Obama and his political advisers think that by emphasizing deficits they are going to win over independent voters. But as I have argued earlier, Obama is pursuing a political fiction. The independents he needs to attract are primarily white working-class voters in places like Ohio, Pennsylvania, and Wisconsin. They may care about deficits as a stand-in for what they see as wasteful spending on undeserving groups. But their primary concern, as they demonstrated in 2008, is jobs and the economy.

Of course, you could still argue that deficits really do matter and that even if Obama is acting in a way that is politically stupid, he is doing the right thing. Unfortunately, that is not the case either. We need a long-term plan for curbing deficits as a percentage of GDP, but what we need to do now is ensure that a full recovery takes place. That requires just the opposite of what Obama has agreed to do. If you think budget cuts will revive the economy, look at what is happening in Tory England as a result of Prime Minister David Cameron’s budget cutting. Britain, which had been recovering from its recession, is now projected to have grown .3 percent over the last six months.

What should Obama have done and be doing? He should focus relentlessly on creating jobs and speeding economic growth. He should have presented programs to do so, and if the Republicans blocked them, then they would have to take the blame if the economy stalls or actually turns down again. And above all, the president should not acquiesce in, and even praise, measures that will harm the economy and his own re-election chances.

Of course, Obama can still win, even while talking about deficits, if the Republicans nominate what Peggy Noonan has felicitously called one of their “antic” candidates. Or he can win if the Republicans don’t quickly discard the Paul Ryan playbook and return to what got them good results in 2010—attacking Obama for not creating jobs. But my guess is that the Republican nominee will dissociate him or herself from Ryan’s Medicare agenda. If a credible GOP nominee emerges and adopts that stance, and Obama continues to talk deficits to twentysomethings at community colleges, his re-election is far from assured.

John B. Judis is a senior editor at The New Republic and a visiting scholar at the Carnegie Endowment for International Peace.

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posted in: john judis, united states, arkansas, bill clinton, david cameron, george h.w. bush, mike huckabee, pat buchanan, ross perot, steve kornacki, medicare

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