The Democrats’ 2010 unemployment trap
In the WSJ today, Karl Rove notices that the unemployment rate may still be really, really high on Election Day 2010: “The difficulty for Mr. Obama will be when the public sees where his decisions lead — higher inflation, higher interest rates, higher taxes, sluggish growth, and a jobless recovery.”
Me: I have been saying for awhile that voters in the congressional midterm elections are more likely than not to think the U.S. economy still stinks — even if GDP is expanding at a steady clip. Unemployment could be around 10 percent with both inflation and interest rates on the rise.
Certainly the recent history of U.S. elections is that the party in power gets blamed. The classic example is 1992. The unemployment rate was 7.4 percent, still close to the cyclical high of 7.8 percent, even though the economy had been expanding steadily since the second quarter of 1991. President George Bush lost to Gov. Bill Clinton handily. Even by 1994, voters thought the economy still dodgy and voted the GOP back into power in Congress. Two things the Dems have going for them is that 1) the GOP has to protect more Senate seats and 2) high-tech redistricting methods have made huge swings on the House less likely.