The Clock Ticks: History, Unemployment, and Presidential Elections

Less than one year to the 2012 elections. Less than 60 days to the New Hampshire primary. Barely 50 days to the Iowa caucuses. The official presidential race is upon us. But as the clock ticks, time is running out for Obama and history is against him.

The basic problem is the economy. Only 80,000 jobs were added in October, placing the unemployment rate at 9.0%. The Federal Reserve Board projects slow economic growth next year–2-2.5%–with the unemployment rate settling in at about 8.5% by election time. Of course these numbers are bad for all those looking for jobs or businesses hoping to grow, yet for Obama it is a real problem.

Since 1932 only two presidents have ever won re-election when the unemployment rate was above 6%. In 1936 and 1940 Franklin Roosevelt won reelection with unemployment rates of 17% and 14.6%, but both of these elections should be treated as outliers or oddities. In 1936 the unemployment rate had dropped from nearly 24% to 17% and the economy was growing at an annual rate of 14%. In 1940 World War II was upon America and with patriotism high, support for Roosevelt was strong. More importantly, the economy was growing at 10% but the perception was that the president had the country going in the right direction.

In 1984 Ronald Reagan won re-election with an unemployment rate of 7.5%. Yet his victory occurred when the economy was growing at more than 11% and gas prices were tumbling from then record highs. Reagan definitely benefited from the perception that it truly was morning in America, especially after the unemployment rate tumbled from around 10% in 1982 and 1983.

But FDR and Reagan aside, high unemployment–six percent or more–is the death knell for a presidential re-election bid. In 1976 Gerald Ford ran for re-election when the unemployment rate was 7.7%–he lost to Jimmy Carter. Four years later the unemployment rate was 7.1% when Carter ran for a second term against Reagan. He lost to the tune of Reagan asking Americans if they were better off now than they were four years ago. In 1992 George Bush sought a second term with an unemployment rate of 7.5%–he lost to a Bill Clinton reminding the voters that it was “the economy stupid.” Conversely, Nixon won with an unemployment rate of 5.6% in 1972, Clinton 5.4% in 1996, Bush in 2004 with 5.5%, Eisenhower 4.1% in 1956, and Truman in 1948 with 3.8%.

Key to a presidential re-election is the actual unemployment rate. But economic, and the reality or perception that it is moving in the right direction, is also important. If there are not significant declines in unemployment along with economic growth and a perception that the economy is moving in the right direction, presidents are not given a second term.

Obama faces an economy where the best projection is of high unemployment and low economic growth. But there is more. Home values remain about 25% or more below what they were in 2008, consumer and now student debt is high, and many people have already blown through their unemployment benefits and face an uncertain future. Consumer confidence remains near historic lows, suggesting little chance that retail sales and spending for the coming holidays and into next year will revive the economy. The public just does not believe the country is headed in the right direction and few think we are better off now than four years ago.

History suggests Obama will lose. This assumes the Republicans put up a viable candidate with a compelling narrative. Yet so far that task seems elusive. Bachmann has come and gone. Perry has gaffed himself to death. Cain’s numbers place him in the GOP lead, but his negatives are escalating as it becomes more apparent that he is a misogynist who treats every woman in a demeaning fashion. Romney is boring and the Republican base does not really know where “multiple choice Mitt” stands on the issues. Gingrich is too acerbic. Congressional approval is less than 10%, with the public placing more blame on the Republicans than Obama for the gridlock in Washington. In short, the Republicans have the Democrats' disease—they are poised to snatch defeat from the jaws of victory. Obama can still win—he has money, the bully pulpit, and demographics that place perhaps as many as 200 or more electoral votes in easily into his presidential win column without too much effort. Now all he needs is the narrative for his re-election.

Obama hopes for a rerun of the 1948 Truman surprise victory over Dewey, campaigning hard as an economist populist against a hapless elitist. Yet the 1948 campaign featured an economy far better than 2012 so the parallels here might not be good.

Obama is also running on the fear factor—Hope that the American public will be afraid of an extremist Republican president presiding over a Republican Congress. Fear came be a powerful too, but 1980 demonstrated with Carter was up for re-election, fear of a crazy Reagan who would blow up the world was pushed aside by the desire for change and disgust with the status quo. Obama knows the public wants change—as he promised in 2008—but it is hard to run on that narrative when you an incumbent seeking re-election. He needs to navigate a message that promises change while staying the course with him. It’s a hard task—made only more difficult by the unemployment numbers—but Reagan and FDR did it, and now Obama needs to figure out how to channel their magic to do the same.

Acta Est Fabula: Pawlenty’s Presidential Crawl Officially Begins

On Monday Tim Pawlenty made it official–he is running for president. No surprise here. He has been preparing to do this for the last two years more or less. Yet how do his prospects look? Perhaps the best thing going for him is that the GOP field is weak and he has an opening. His momentum, if any, is as a result of a void in Republican support for a presidential candidate.

Pawlenty’s presidential announcement was poor. First think of the visuals. Television is visual and you want to avoid talking heads. Pawlenty chose the Iowa state capitol as a backdrop but when I viewed it all that was visible behind him were trees and grass. No capitol, no flags, no people. It looked like he was standing in the park, speaking to a small group, running for dog catcher. It did not look presidential, it looked more amateurish. There was no interesting visuals or spark to light up the talk. Contrast to Obama or a Bachmann–there would have been crowds around them on camera cheering. Here, the applause sounded like Tiger Woods sinking a shot for par 3.


Now the message and delivery. Pawlenty has been a candidate in search of a narrative or message ever since he commenced his presidential bid. He has sought to define himself as the ”Sam’s Club Republican,” as the tax cutter, and as a social conservative.

He now appears to want to be a prophet, telling the American public the truth. Pawlenty uttered “truth” 16 times, aiming to the be straight-talking Harry Truman of his generation, telling folks not what they want to hear but what they need to hear. At the same time he also sought to copy a well-trod path of running against Washington, D.C., using Obama “change” mantra from 08 which also worked successfully for the GOP in 10. “Truth” for Pawlenty” in 12 is his version of “Change.”

Yet the narrative will not work. Obama’s narrative was positive, forward, and self-defining. Pawlenty’s is not. It was dark and depressing. Pawlenty needed a speech that defined who he was and what America would look like under his presidency. The message was dark and pessimistic–one of cuts and sacrifice. It reminded me of Walter Mondale in 1984 saying he was going to tell the truth when running against Reagan. It did not work. It was also dark like Jimmy Carter’s July 15, 1979, “Crisis of American Character” speech, even if true, it was not inspiring.

Pawlenty lacks a rationale for why he wants to run for president, as evidenced by his Time magazine interview when asked why he wants the office he stated: "I don't know. I wish I had a good answer for you on that." Pawlenty lacks an elevator speech for his presidency, he lacks a clear narrative for running, and he lacks a definition for his campaign. That came out in his Des Moines declaration. He needed an announcement with fireworks but it did not occur. He should have began his declaration with his vision and self-definition and then moved on to the case against Obama. Yet he failed to do that, leading instead with a dark message and bland delivery that failed to give his campaign a jump start.

Finally, poor Pawlenty. Tornadoes obscured his message. What next? Bachmann again upstaging him?

Pawlenty’s big hope is that no other GOP takes fire and he slips in by default.

Right now, Pawlenty may get 7-10% in Iowa, limp through New Hampshire, and then die in South Carolina.

Don’t Let Mubarak In! Obama’s Carter moment and what he can learn from the 1980 Iranian hostage crisis

When the inevitable occurs–Hosni Mubarak of Egypt steps down or is forced to leave–the United States and Obama should not give him asylum in this country. This would be repeating the same mistake that President Carter made with the Shah of Iran in 1979. A decision to eventually led to the taking of 52 American hostages.

Watching the events in Egypt unfold in the last few days reminds me so much of Iran in 1979 and 1980. The parallels seem so scary and similar.



1979 and the Shah of Iran
The Shah of Iran was an American ally who ran a secularist, brutal regime that was in many ways propped up by the United States. He was considered an important military and regional ally of this county and he received significant financial and military assistance from this country. However, he became increasingly despised by his people and there was a growing Islamic movement–remotely directed and inspired by Ayatollah Khomeini in exile from France.

As the pressures internally mounted against the Shah, he initially sought to crack down on the protests and suppress the Islamic movement. But when the movement began to swell and his crackdown became more severe, the United States was caught in a dilemma. Should it support the Shah and his regime in his crackdown or encourage a transition in power to something the United States could not predict? Moreover, the United States could not tolerate the repression the Shah was using to stay in power, and President Jimmy Carter, committed to an agenda and foreign policy of protecting human rights, encouraged the Shah to show restraint when dealing the demonstrators. He did, and some argue that the easing of oppression and the light response he took toward the demonstrators paved the way for his eventual ouster. From there, stuck with what to do to get the Shah out, Carter permitted him entrance into the United States for medical treatment and exile until it became clear that his residence in this country was a political liability and he was invited to exit.

Yet, in allowing the Shah to enter the United States, it made the country look like it was his puppeteer. In part the decision to let the Shah enter the US precipitated the takeover of the US embassy in Tehran and the taking of the hostages.

I remember the Iranian hostage crisis well. I was a senior in college, applying to graduate school in political science, and watched how it was the final event that perhaps doomed the Carter presidency and helped elect Reagan. Carter’s missteps, the image of a failed presidency, all were contributing forces that led to his downfall.

2010 and Mubarak of Egypt
Mubarak reminds me so much of the Shah. He took over after the assassination of Sadat and has run a brutal secular regime. He has stayed in power via rigged elections and by suppression of an opposition that includes the Islamic Brotherhood. He is an ally of the United States, receiving significant financial and military aid from the United States, in part because of a reward for negotiating peace with Israel. I think Egypt is the second largest recipient of foreign and military aid from the US (behind Israel as number one), but don’t quote me on the exact ranking. It is significant, but perhaps not number two.

The US supports Egypt in large part because of the peace deal with Israel. We need Egypt as an ally to protect Israel. It is still one of the only Middle East Arab states that recognizes the latter’s right to exist. In short, we have had a strategic interest in supporting his regime even though from Reagan to Obama it was widely recognized he was unpopular.


Now, the forces of change are ready to topple Mubarak. There is an able opposition leader in El Baradei. He is secular but there are clear news reports that the Muslim brotherhood and the religious parties are willing to support him as a leader–at least as a transitional one. The demonstrations are growing and the demands for his ouster are growing internally. It is not clear if Mubarak has control or support of the military, and today on CBS news I saw American F-1 fighter planes that we sold to Egypt buzzing the protesters as a way to intimidate them.

Also on CBS today I saw Secretary of State Clinton call for Mubarak to ease up and not crack down on the protesters, and later call for him to facilitate a democratic transition. Obama and Clinton have not yet publicly called for Mubarak to step down, but it is close. The call on Mubarak not to crack down and perhaps make other reforms is reminiscent of Carter telling the Shah not to crack down and to respond to the demands of demonstrators.

Now, I am no Middle East expert, but all of this is beginning to smell more like 1980 all over again. Obama is trapped like Carter was. Strategic interests such as support for Israel, call for us to keep Mubarak in. There is as well as fear of instability, fear of what will happen next, and perhaps the fear of another Islamic fundamentalist regime hostile to the US. But the brutal regime and a commitment to democracy, a desire to expand influence in the Middle East, and a need to recognize the inevitable are forcing Obama to want to call for his ouster and step down. Vacillating on what to do is precisely where Carter was in 1979, and that is where Obama is now.

The choices are not great, but they clearly need to expend to calling for Mubarak to step down. But what then? What if anything can the US do to facilitate democracy and maintain Egypt as an ally? El Baradei has made it clear he does not see the US as a friend and having our F-1 fly over Cairo does not reinforce a favorable view of this country. We have supported a bad dictator for too many years and it is just not clear what influence the US has going forward.

Obama's Carter Moment
But one thing is clear as Obama makes choices: Don’t let Mubarak in the US. Do nor grant him asylum. Avoid giving any sign that the US continues to support him lest we give the opposition reason to hate us even more. I hope at this point Obama is reaching out to the opposition, but in doing so will the US send other signals to other regimes that democratic reform is needed? The Middle East–first with Tunisia, Egypt, and perhaps Yemen, suggest change is in the air.

Obama is facing a Carter moment in foreign policy that could dramatically impact his presidency. How he responds not only affects American foreign policy and influence across the world, but also perhaps his prospects in 2012.

Afterthought

In 1980, as a student I read Barrington Moore Jr.’s Reflection of the Causes of Human Misery and on Certain Proposals to Eliminate Them and Injustice: The Social Bases of Obedience and Revolt. Both were brilliant books that argued, among other things, that the failure to allow for social and democratic change was one of the chief causes of human misery and injustice in the world and that too often the US was viewed as the agent that stifled change. This was true in Iran in 1979-80–rightly or wrongly–and the same may be true today in Egypt. What has the United States learned since 1979? This is a good question to ponder.

The End of the Obama Presidency?

The current Obama presidency came to an end last week. What it means for 2012 and his re-election bid is that for the first time I think there is a serious chance that he might not get reelected. The reasons for that are the economy, alienating his base, and potential white voter backlash.

In general it is hard to defeat sitting presidents. Yes, Carter and Bush I both lost, but it took bad economic conditions and a third party vote for Ross Perot to do that. Previous to that, Ford did lose but he was barely an incumbent and he pardoned Nixon, and LBJ opted not to run. However, before that, it was Hoover (1932), Harrison (1892), Cleveland (1888), Van Buren (1840) and John Adams (1800) who lost when running for election. The economy and major crisis seem to be the usual reasons for incumbents losing.

Kerry in 2004 is a testament to how difficult it is to defeat a sitting president. They have to make major mistakes or blunders to lose, or be so dragged down with the economy that their candidacy is destroyed by it. Obama faces both.

The economy remains a mess. In a couple of blogs ago I wrote about the persistent unemployment, the failure to address the mortgage market, and the perception that he favored the banks over the people. These problems persist. Yes, Obama will get some bump from the economy in the next year or so but short of a miracle too many people will be jobless.

Beyond the economy, two fatal blows were delivered. First the failure to repeal “don’t ask, don’t tell” means he has dramatically lost or alienated the young under-30 vote and the GLBT community. They supported him enthusiastically in '08 and stayed home in '10. The latter will be true in '12.

In addition, his compromise on the Bush tax cuts infuriated his liberal base. The cuts may still pass, but he threw Democrats and liberals under the bus in order to appease swing voters. The House refusal to bring the original proposal to a vote demonstrated the anger. Had this been a parliamentary system, the refusal to vote on it would have triggered a vote of no-confidence and a collapse of the government. That is what happened last week effectively.

The fatal error here is Obama alienated his base. They will not vote against him in '12, but certainly they will not come out strong for him. He is counting on them having no alternative and voting for him. Don’t count on it. Ignoring your base and raising expectations–only to disappoint–is the surest way to lose them.

Thus, Obama’s strategy? Hope your base holds their nose and votes for you in '12 out of fear of the GOP, and try to regain the swings voters. Preliminary polls suggest the swings like the Obama tax deal, but is it enough to swing them to his side? Maybe not.

Many who voted for Obama in '08 were whites so disappointed with Bush and the economy they were willing to take a chance. Fear and disgust melted some white opposition but they may not happen again. Obama may have a harder time getting their support.

So, how is the end of the Obama presidency? Obama is swapping one type of presidency for a another. If the narrative of the first presidency was change now it is survival. It is a defensive presidency, one aimed at governing with the support of the GOP and swings and not the Democrats. Why after two years he thinks he can win over the GOP is a mystery to me. Finally, I remain perplexed regarding the narrative that Obama has for the next two years. What is it?

A Note on Michael Bloomberg
Bloomberg has said no to running for president in '12. He has a great opening. A combination with Obama disenchantment, a GOP field that is ultra conservative, and the independent streak the NYC mayor has (plus his money), give him a great opening in '12 if he wants it.

Tea Party Candidates and Conventional Wisdom: Why the Democrats Got it Wrong

So Democrats are rejoicing and Republicans fretting the victory of Christine O’Donnell in Delaware.

Conventional wisdom is that the GOP worry that her victory as an extreme candidate makes it harder for the party to pick up enough seats to take back the Senate. Conventional wisdom is that the GOP is cannibalizing its moderates and pushing the party to the fringe right.

Conventional wisdom that Democrats can win since voters will repel from these extremist candidates. Conventional wisdom may be wrong.

There are two clear truths in politics–-angry people vote and messaging is important. The Democrats seem to have forgotten this and are banking on voters turning out against the Tea Party candidates. They should wish for a pony too.

First, think about the fact Rod Stewart was correct-–it is about passion and the same is true in politics. Passion or anger are the genesis for the political motivation to participate. Rarely do contented, alienated, or disaffected vote. In 2006 and 2008 the Democrats had the anger and passion and they voted. This year they do not and they may stay home.

Second, the Tea Party people have the passion and anger and they are participating. They will be there on November 2, in the same way they have been there during the primaries.

Third, in off year elections we can anticipate a national voter turnout of about 40%. In areas even less. If 90% of life is showing up, and if politics is also about mobilizing a base, the Tea Party candidates have an advantage. A small group of highly motivated (angry) voters showing up in a election with low turnout means they will have a big impact on races. Even if they are only 10% of the total turnout, that is enough to change outcomes when only 40% of electorate votes.

Third, Democrats are counting on moderate and swing voters being shocked by the extremism of the Tea Party candidates and not voting for them. Here the Democrats are presupposing these voters realize the Tea Party candidates are extreme. The Democrats need to message on this and have thus far failed to do so.

Fourth, even if they message, Democrats need an alternative. Voters, including the swings, are upset with the status quo. They want an alternative? What is the Democratic narrative? “The other side is nuts, stay with us.” Some message.

In 1980 voters had initial and significant hesitation with Reagan. Carter and the Democrats tried to cast him as a extremist nut. It failed. Angry voters upset with the status quo opted to take a chance and go with Reagan, preferring change over status quo.

So the Democrats should not count on being saved by the Tea Party take over. Democrats still need a message–-an alternative and they are running out of time. They have a McCain problem. In 2008 McCain had to run against the status quo and for change when the GOP had controlled the White House for the last eight years and Congress for six of the last eight. Now the Democrats are being forced to run against themselves.

What are they doing is dumb. Beyond hoping for a GOP meltdown, they are making a classic mistake they always make–-run to the right and ape the GOP. That will not work. Who do you vote for if you want change? The GOP or a party acting like the GOP? The real alternative for the Dems is a progressive one–-run against Wall Street, the banks, and big business. But given how much money they have taken from them, don’t look for that to occur.