James Pethokoukis

Politics and policy from inside Washington

How the economy may undermine Obama’s 2012 reelection hopes

April 7, 2011

It’s not just the labor market that worries Team Obama:

“We are making progress on jobs and need to make more progress on jobs,” said David Axelrod, a former senior White House aide who is part of Obama’s 2012 campaign team. “But people are also grappling with stagnant wages and rising prices. That’s a legitimate, important concern for people and we have to pay close attention to it.”

Further, Jay Cost of the The Weekly Standard elaborates in great detail on something I have been writing about, how weak income growth could hurt Obama’s 2012 chances:

So basically, here is where we are. Policymakers have spent the last three years tossing not millions, not billions, but trillions of borrowed dollars at the output gap in the American economy. And what is the result? A fair measurement of unemployment comes in higher than anything we’ve seen since the Great Depression. Real wages are in decline. Food stamp enrollment is at an all time high. Jobs are coming back, but at a painfully slow rate and without very good pay. Growth for this year and next are expected to come in below the historical trend. We’ve created a huge budget deficit, as we’ve borrowed from future generations to cover the output gap from the last couple years. And let’s not forget this one (not that we ever could!

So, for those analysts in the press who think that Obama will win in 2012 if incomes are still being propped up by massive (deficit financed) government spending, real salaries are declining or flat, unemployment is far above the historical trend, good paying jobs are scarce, the deficit is at an all time high, and the president has no real idea about what to do (except, of course, high speed rail), I have only this to say: you might want to think twice before you place that wager. This president is not yet out of the woods on the economy. Not even close.

The piece has some great charts, but I particularly like this one which shows any income bounce is all sugar and steroids:

costchart

Comments

It’s not the economy that will undermine Obama’s election hopes. It’s the effect of Republican obstructionism on the recovery that will undermine Obama’s election hopes. Every credible institution from Moody’s to Goldman Sachs has gone on record saying that the GOP’s economic policies will slow the economy and reduce employment. That has been their goal all along. Sandbag the economy, blame it on Obama, reap the reward.

Posted by Yellow105 | Report as abusive
 

You mean the Moody’s and Goldman that are spending millions of dollars against Obama’s fight to regulate their ways that led to the economic collapse? Those Obama sympathizers?

=RED

Posted by REDruin | Report as abusive
 

The Economy is precisely the issue that will prevent Obama from being re elected. And, to suggest that Republican “Obstructionism” will be his bane,.. is truly ridiculous and probably irresponsible.. This Economy is in the worst shape it has EVER been in, and thats a fact. And,..there is no near term relief in sight. Fact. The numbers are just to big at this juncture… that is also a fact. And that is no matter which “plan” you prefer to believe will offer an eventual cure. Even with the massive changes that WILL be starting soon, the problem is just to massive… People don’t understand that. However I must say the Republicans have at least offered a plan. Representative Ryans plan still won’t balance the budget for 30 years and it is that plan, or one very similar, that we will eventually have in the next 2 yrs. You can squirm and protest and hold your breath all you want Dems and Unionites,… Austerity is here, and it is here to stay.. No more gravy. Obama does not fathom the idea.. He truly believes in his heart that Social issues are the main topic on the worlds agenda… He will be another Carter… Man, we couldn’t wait to get him in office… Then,.. He screwed things up so bad,..We couldn’t wait to get him out.. Obama is on the same glide path…
No my friend,.. All the spin in the world can not change the math that is so overwhelming this coming election.. It was an essential part of why the GOP was so predominate this last November… (and will be in 2012).. Just showing the FACTUAL numbers and not deviating from those black and white issues was enough to sway the Independents back from their swoon with Hippydom .. to revisiting the notion and concepts of fiscal responsibility.
Soooo,.. If you think that the Economy won’t be the Principle issue.. Sit down and take a few deep breaths you are having halucinations… Will it cost Obama his job??.. His neglect of it, most surely will. He just was’nt ready for prime time… Now,.. Let’s move on and start fixing it… The fat government sow”s days are over…. You best get ready for that fact Bohner is serious.. and he’s the moderate !!

Posted by jerico911 | Report as abusive
 

James, they will not let me post.

Posted by madmilker | Report as abusive
 

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