Tuesday, June 12, 2012

THE PRAIRIE EDITOR: Not Quite As Expected

The 2012 presidential election campaign is turning out to be not quite as
expected. The nominees are no surprise; it was almost certain that Barack
Obama would run for a second term, and likely that 2008 GOP runner-up
Mitt Romney would be his opponent in November. But the conventional
wisdom about each of these men, one type-cast as a charismatic and savvy
campaigner and the other as a boring speaker and "cold fish," is being
turned on its head as the November campaign just begins in earnest more
than two months before the two national conventions in late August and
early September.

It is conventional  to think of the remaining five months until election
day to be a long time politically. But in terms of a presidential election,
with overriding issues of the domestic economy almost always paramount,
this is may not be the case. Movements in the economy, and the statistics
about them, appear slowly. One recent example of this took place in 1992
when a down economy was already beginning to recover by the late
autumn, but it was not apparent enough to voters to save incumbent
President George H.W. Bush's re-election against challenger Bill Clinton.
Only a year before, right after the Gulf War, Bush's popularity had been
very high, but those numbers had faded quickly.

In June 2012, the U.S. economy, suffering from a prolonged downturn,
including historic levels of prolonged high unemployment, seems unable
to recover. The worldwide economic crisis, particularly acute in Europe,
appears to present even further challenges in the short turn. A recovery
could begin over the next five months, but it takes longer than that for the
evidence to be visible. Individuals and corporations do have substantial
assets currently in cash which could fuel a recovery, but little incentive to
do so. President Obama's often-stated public policies, especially of higher
taxes, bail-outs and more federal spending, and the increased public debt
of his Obamacare programs, all tend to inhibit consumer and business
optimism. New statistics indicate that U.S. families lost about 40%
of their net worth from 2007 to 2010. Almost every adult has a good
idea of their net worth, and such a massive shrinkage can only tend to
prevent pessimistic consumers from spending their available cash. In
fact, in these circumstances there is an incentive to hoard more cash and
not to spend. Similarly,  businesses will not take the risk of investing in
expansion or hiring new employees in such an economic climate.
Larger corporations, even if they are making profits, tend to reduce their
payrolls during an economic decline in order to be more efficient and raise

The stock market, which following World War II became a principal part
of what individuals consider their net asset value (through investments,
employee pension funds, IRAs and other retirement savings) generally
anticipates an economic recover 6-9 months before such a recover becomes
obvious. The other major part (and often larger part) of what individuals and
families consider their net asset value is the house they own. Real estate
values, long in decline in most parts of the U.S., continue to be significantly
down, even though the government props up the housing market with
extraordinarily low interest rates.

The value of a voter's pension or other retirement funds, and his or her real
estate property, down 40%, cannot be hidden by political rhetoric, slogans
and photo opportunities. Since all of these, plus job security, take time to
change and become evident, historically much longer than five months,
the commonplace that a lot can happen domestically before the election this
year is just very unlikely.

One area, however, in which five months IS a long time is in foreign
affairs. In 1956, dramatic world events, including the Soviet invasion of
Hungary and the Suez Canal crisis, occurred only a few months and days
before the election, propelling President Eisenhower to an easy re-election
against Democratic challenger Adlai Stevenson. Perhaps Eisenhower
would have won anyway, but the foreign crises (in which he was perceived
to be the much better leader) made it a slam-dunk.

With international hot spots now scattered all over the globe, including the
perennial Middle East crisis further complicated by the so-called "Arab
Spring" and the threat of nuclear weapons being developed by Iran; the
continued erratic and threatening activities of North Korea: the chronic
anti-Americanism coming from Cuba, Venezuela, Bolivia and Nicaragua;
and the drug wars in Mexico; and the possibility of some new crisis emerging
from a part of the world now unanticipated, the attention of U.S. voters
could be averted from their economic woes on short notice.

So far, President Obama has not generally acted in his foreign policy in ways
that assert or strengthen U.S. power and leadership in the world. In fact, his
policies have been to play down our international role, and withdraw U.S.
troops from Iraq and Afghanistan. A new world crisis might normally enhance
an incumbent president's standing with voters, as it did in 1956, but that
happens when an incumbent has shown mastery of foreign affairs, resolve and
strength in dealing with our allies and enemies. The question then is:  Would
President Obama benefit politically if a new international crisis develops in the
next five months?

Mitt Romney led through most of the Republican nomination process, but there
remained throughout that time a lingering question of his ability to mount an
effective campaign against an incumbent president, including his ability to
raise funds and his willingness to aggressively oppose Mr. Obama (in contrast
to 2008 GOP nominee John McCain's lackluster campaign). Since his
nomination was assured, however, Mr. Romney has begun to raise more money
than the Democrats, has responded quickly and effectively to the campaign
against him, and has shown a new stature. He remains a less-than-charismatic
communicator, but he has, to be fair, shown much improvement over his
failed effort in 2008.

At the same time, President Obama's 2008 image as an eloquent and
charismatic new leader has faded. His political base has weakened. His strong
support from the left, as the latest Netroots convention has indicated, has
noticeably weakened. His support among most ethnic groups is down (with
the possible and important exception of Hispanic voters). His refusal to help
the Democratic gubernatorial candidate in the recent Wisconsin recall election
cannot have enhanced his support among union voters. Although Mr. Obama
made many flubs and misstatements throughout the first three years of his
presidency (as, to be fair, all presidents do), the Old Media ignored them and
virtually all negative aspects of his performance in office. Today, even the
Old Media (almost entirely liberal) is reporting more and more of Mr. Obama's
problems, even as the New Media (mostly conservative) jumps on everything
he says. Campaign year 2012 is a dramatically different political and media
environment for the Obama campaign from what they experienced in 2008
and afterwards.

All of this does not mean that Mr. Obama cannot be re-elected in 2012. He still
has, in the all-important electoral college, control of the large states of New York,
Illinois and California, as well as most of the northeastern states. He will almost
certainly win Minnesota, Oregon and Washington. But elsewhere, in numerous
key battleground states he won in 2008, he is no sure winner. In fact, he could
lose most of them. The visible confidence of the president and his campaign
team, so evident only a few weeks ago, has been replaced with alarm, if not
panic, in the face of the unanticipated strong Romney challenge and the
continued bad news about the economy.

This is not what the Democrats quite expected to happen in 2012. Nor is it
what many Republicans, thinking they would have to wait until 2017 to return
to the White House, quite expected.

Now all bets are off.

Copyright (c) 2012 by Barry Casselman.  All rights reserved.

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