The latest U.S. job creation numbers are disappointing, as unemployment hit 9.1% with only 54,000 new jobs created in May. They’re especially discouraging when contrasted with the 244,000 new jobs that emerged in April. President Obama had trouble hiding his disappointment when he talked about ‘bumps in the road,’ while visiting a Chrysler auto plant last week to highlight the domestic auto-manufacturing comeback following its bailout. His spokespeople emphasized that over 2 million private sector jobs were created in the past 15 months. Yet, it’s hard to overlook the fact that 13.9 million Americans are still out of work and 45% have been unemployed for more than six months.
Republican presidential candidates and critics have labeled Obama’s efforts on the economy a failure. His supporters counter by pointing to the belief by many economists that the 2009 stimulus saved nearly 2 to 3 million jobs and the TARP program brought back financial stability.
Obama’s administration has also argued that it has, admittedly with the GOP’s help, produced other ‘stimulus’ measures by reducing payroll taxes, signing free trade agreements (ratification to come) and establishing a task force to reduce business related regulations. It is becoming obvious, however, that the GOP wants to make the next general election a referendum on Obama’s economic policies.
With polls showing a majority disapproving of Obama’s handling of the economy, Republican candidates—such as potential frontrunner Mitt Romney—see a bone to gnaw at and will use it as a way to pin the economic woes of the nation on Obama. Will it work? Can the Republicans extend their midterm success in capturing the House of Representatives to one of winning the presidency?
If the unemployment numbers inch up towards 10%, they may have a point. Even prominent Democrats like Howard Dean admit that the economy could be the deciding factor. Already, pundits refer to the figure of 7.2% unemployment as a ceiling: no incumbent has ever been re-elected when the figure was higher. And the way thing are going, it’s unlikely that the current recovery will result in a figure in the vicinity of 7.2% by election time. That means if Obama wins, it will be with the highest unemployment figure in history.
So, is the economy the only issue that will determine how voters will choose in 2012? True, the economy may have led Jimmy Carter and George H.W. Bush to becoming one-term presidents, but that would be ignoring other factors that contributed to their defeats. Carter had over 400 hostages in Iranian hands for over a year and seemed helpless in asserting U.S. power. And Bush lost in large part because Ross Perot earned 19% of the popular vote as an independent candidate (Clinton won the 1992 election with only 42%).
Candidates are scrutinized for how they handle their ‘hard’ power responsibilities (the economy and national security) and their ‘soft’ power duties (Can he be trusted? Will he keep us safe? Does he have his priorities straight?). So far, polls are indicating that Obama is very competitive on ‘hard’ power issues and the current deficit and debt battle indicate he has some advantages regarding taxing the top 1% of earners and preserving Medicare from being a voucher-directed program a la Paul Ryan. The killing of Osama Bin Laden was also a boon to his national security credentials.
On the ‘soft ‘power front, Obama’s personal favourables remain high. People like the man and his family. They seem to acknowledge his intelligence and find his coolness under pressure reassuring. They also understand that he inherited two wars, not of his making, and the worst economy since the Great Depression. Finally, Americans remain proud of choosing the first African American president, they want him to succeed, and a majority currently wish him to be reelected.
It is obviously too early to predict the outcome of the next campaign. Suffice it to say that unless there is a second recession in 4 years, Obama may have a chance to be evaluated beyond issues of the economy.