Can economic upturn save Obama?

(Reuters)

Signs of economic improvement could bolster President Barack Obama‘s re-election hopes as he tries to beat back Republican attacks over his failure to create enough jobs.

Economists say things are looking brighter in the second half of 2011, which would augur well for Obama as he gears up a 2012 campaign that will largely hinge on how Americans feel about the economy.

Manufacturing is improving, a housing price decline may be abating and — crucially for U.S. consumers — gasoline prices are down sharply from their highs in May, which should help overcome disappointing unemployment data — the most politically sensitive economic statistic.

“After weeks of general gloom on the economic front, a little sun shone through the clouds this week,” economist Andrew Tilton of Goldman Sachs wrote in a note to clients.

Economists polled by Reuters expected the jobless data released Friday to show the U.S. rate held at 9.1 percent in June, unchanged from a disappointing report for May.

Although polls give the Democratic president the edge over his Republican challengers, Obama’s approval rating is just below 50 percent and Americans are looking for answers about how the country will move forward.

“While the president’s accomplishments are important and demonstrate that he is a strong leader, voters care most about what candidates have to say about the future,” said Bill Burton, a former White House aide who now heads a Democratic fundraising group.

A strengthening recovery would provide a big boost to Obama as he makes the case that he deserves to be re-elected, with the economy the issue most likely to affect whether voters feel optimistic when they head to the polls in November 2012.

“All the projections suggest that things will be slightly better in a year,” said Ipsos pollster Cliff Young. “That’s all good for him because how the economy’s going has a fairly big impact on how people think about things.”

Republicans vying for the nomination, particularly early front-runner Mitt Romney, a former governor and wealthy businessman, have been connecting with some voters by pounding the Democratic president over the sputtering economy.

“It’s the pocketbook issues,” said Tim Hagle, a political scientist at the University of Iowa, whose early caucuses will play a big part in selecting the Republican presidential nominees. “They’re saying, ‘Look, how is this affecting me?’ That’s the potential problem that Obama in particular faces.”

WHAT’S THE MAGIC JOBLESS RATE?

But experts discounted what has become the conventional wisdom that Obama will be in trouble because no U.S. president has been re-elected since World War Two if unemployment has been higher than 7.2 percent on Election Day.

The sample is too small, given the overall advantage held by any White House incumbent, and other issues like Obama’s personal popularity and positive ratings on issues including national security and foreign policy.

“If the unemployment rate were 7.5 percent, he’ll get re-elected hands down,” said Jim Kessler, vice president for policy at Third Way, a centrist Democratic think tank.

“The question is what if it’s 8.2 percent, what happens then? People know he inherited this economy, they’re not fools. It’s whether they feel like we’re making progress and we’re going to continue to make progress,” Kessler said.

With Republicans and Democrats blaming each other for stalled negotiations about raising the U.S. debt ceiling, both parties have been working to win the rhetorical fight over which can best handle the economy.

A Republican advertisement launched Wednesday listed the country’s economic problems, including the high unemployment rate, $14 trillion in national debt and housing foreclosures, and urged voters to “change direction” and oppose Obama.

“Don’t let Obama drive us to disaster,” said the ad, which features a car making left turns.

The Democrats hit back by repeating their themes that Republicans want to preserve tax loopholes for oil companies and tax breaks for millionaires and billionaires.

The White House also heavily promoted what it called the “Twitter Town Hall,” in which Obama responded to a selection from thousands and thousands of questions on jobs and the economy submitted in Twitter’s 140-character format.

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21 Responses to "Can economic upturn save Obama?"

  1. griff  July 7, 2011 at 9:21 am

    This article is a prime example of what’s wrong with the mindset of our selected officials. It’s all about re-election. Staying in power. Or regaining it.

    The unemployment rate holds steady at 9.1 percent, and that’s a good thing.

    The magic jobless rate? Zero.

    • ray  July 7, 2011 at 10:08 am

      your magic jobless rate is magical thinking … the lowest US rate was 2.93% in 1953 with a 2.5% monthly rate also in 1953 … thus the operating parameters of reasonableness

      this is a historical strange unemployment cycle as many people were unemployed for long periods of time whereas in previous cycles it was for short periods of time … of course you may believe that all those folks are simply lazy and don’t want a job but how did all those folks know which job to get to be laid off which would entitle them to unemployment?

      • griff  July 7, 2011 at 11:55 am

        Um yeah, I was being sarcastic.

        I didn’t say any thing about why I believe unemployment is so high and persistent, but I would guess it’s because the majority of our industry has been moved overseas because slavery is cheaper than paying livable wages, providing retirement security through pensions, and providing high quality, low cost health insurance.

        You see, the government got involved in all these things and ruined it. And now we’re asking the same fools that wrecked it to fix it.

        • logtroll  July 8, 2011 at 10:02 am

          Maybe it was us that did it. Remember back in the 50’s and 60’s (the good ol’ days) when “labor saving devices” were all the rage? And “automation” and computer controlled robots were our fondest dream, to reduce the burden and drudgery of daily life so we could all live better?

          Somebody forgot to tell the “Captains of Industry” that the goal was a lazy Socialist paradise for all. Them bastards has taken it all and won’t share!!

          • griff  July 8, 2011 at 5:40 pm

            I wasn’t alive during the 50’s and 60’s. I remember the 70’s and 80’s, but the 90’s are still quite hazy.

            I wouldn’t disagree with that. But we don’t produce for ourselves most of what we consume.

            Last week I had to go to a client’s shop to configure a switch. They manufacture heavy machinery components. He was telling me that most of their customers are in China. “Their middle class is exploding,” he told me.

            At the expense of our own.

            • woody188  July 8, 2011 at 6:41 pm

              China claims 300 million in their middle class. That’s only 30 million less than the whole population of the United States.

              But then there’s that 690 million peasant farmer and migrant worker class that works for US 89 cents an hour.

              China has a big problem. Their production is mostly exported. So if the West collapses, they will go down as well. They have not managed to corrupt their people with material wealth like has occurred in the West.

              • griff  July 8, 2011 at 6:46 pm

                Unfortunately our “wealth” is imaginary. It’s actually all debt.

  2. woody188  July 7, 2011 at 10:22 am

    Hmm, manufacturing had it’s worst month of the year in May. So the thinking is it can only go up. Housing prices are expected to continue downward another 3-10%. Gas is down from $4 but still way up from $2.79 in 2008 and diesel is still hovering around $4 which means inflation is still a risk.

    Welcome to reality folks.

    If the government reported an unemployment rate of 7.2%, would anyone still believe them?

  3. egc52556  July 7, 2011 at 6:11 pm

    Since the beginning of the Industrial Revolution societies have learned to do more work with less effort…. which translate directly into less workers. The computer age has amplified that effect with steroids.

    Maybe there’s a new normal: there’s just not enough work to go around.

    If that’s so, then what are we going to do with all the un- and under-employed? Kill them? Let them starve? Kick them out of their houses? Let them eat cake?

    Or are we going to use the powered-up work of the fewer worker to house and feed all of the population? We have the physical capacity to do so, but not yet the will.

    That’s the choice: help others or let them die.

    My own political rant: At some point, conservative evangelicals are going to remember that they used to be Christians, whose goal should be the care of their fellow man, rather than accumulating power.

    • Carl Nemo  July 7, 2011 at 7:51 pm

      Solid ‘future think’ egc52556 and I agree. The problem though is these technologically based “freeloaders” will become the wimpy “Eloi” while the remaining producers supporting them, the brutal, cannibalistic subterrene “Morlocks” as in “Time Machine” plot by H.G. Wells…no? / : |

      Just curious…Are you a resident of Fairfield, IA whose zip code correspoinds to your handle number? : )

      Carl Nemo **==

      • Eddie Caplan  July 8, 2011 at 10:03 am

        Yes… a resident of Fairfield.

        • Carl Nemo  July 8, 2011 at 12:40 pm

          Thanks for sharing personal info. I’m a resident of 98642. I’ll have to remember using my zip code as part of my handle in the event I should ever need to do so on my Yahoo accounts. No problem with my main isp addy though.

          I’ve been following your commentary since you’ve frequented the site and everything you write seems well grounded and thought out. : )

          Carl Nemo **==

    • Almandine  July 7, 2011 at 8:42 pm

      Not enough work to go around??? So what will we do?

      Fully half the people don’t pay income taxes, but subsist on the backs of the employed. When will there not be enough productivity – spelled I N C O M E – to keep us all afloat?

      It ain’t about power, it’s about making a living.

      • b mcclellan  July 7, 2011 at 9:14 pm

        Vadallia onions are rotting in the ground, sugar spiked, and ethanol is eating the gaskets in your fuel system while they can’t even give a parolee a job picking fruit they’ll accept.

        It’s July and these fools are still dancing around the May Pole.

        Clearly, I cannot define, nor can they, what a public servant is..Boogers !

  4. Almandine  July 7, 2011 at 10:02 pm

    Boogers… ground into black coal that would be sustenance, except for…

    http://dailycaller.com/2011/07/07/new-epa-rules-to-devastate-coal-industry/

    • Carl Nemo  July 7, 2011 at 10:13 pm

      This should be no surprise, since our ‘orator in chief’ has proclaimed himself to be an enemey of “King Coal”. Obviously the man is simply a political demagogue and is totally ignorant to the clean useage of the fuel.

      No matter, seemingly politicians reign supreme regardless of their terminal ignorance to things technical.

      If Obama were a Chinese official he’d be relegated to a Chinese prison, internment camp or worse for his negative position concerning coal as a fuel…no?

      Thanks for the link Almandine. : )

      Carl Nemo *==

      • Almandine  July 7, 2011 at 10:19 pm

        If we don’t replace this guy, it’s curtains.

        • woody188  July 7, 2011 at 11:33 pm

          I think the problem is his replacement will do the same things. It’s curtains either way!

          • Almandine  July 8, 2011 at 8:02 am

            Maybe, but we know this guy needs to go. Yesterday!

      • Carl Nemo  July 8, 2011 at 2:37 am

        Re: Gross misspellings

        “enemey…useage”…say what?

        should read:

        enemy…usage

        That’s what too many brewski’s does concerning due diligence. Not an excuse, but I rarely use a spell checker and generally work for my words via my 60 + year old, duct tape bound Webster’s New Collegiate Dictionary. I know better, so this is a case of sloppy, blurred vision, proof-reading. My apologies. : (

        Carl Nemo **==

    • b mcclellan  July 7, 2011 at 11:20 pm

      Pop contemplates ,
      it’s not the size of the diaper used to sift through the science, but it’s ability to contain said contaminant for thorough observation.
      The question for miners is – 19.3 vs 23.2 %, toss in some nitrogen, a little helium and argon, xenon too.
      Where, is that confounded Jet-stream ?

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