Tuesday, November 15, 2011

Don't write off re-election of Obama just yet

Business Times - 16 Nov 2011


Don't write off re-election of Obama just yet

By LEON HADAR
WASHINGTON CORRESPONDENT

AT around this time next year, we are going to find out whether or not US President Barack Obama is going to occupy the White House for another four years. Many political experts and historians have almost written him off, pointing out that no incumbent US president won re-elected since 1945 with an unemployment rate of over 7 per cent. If the unemployment rate continues to hover around 9 per cent in 2012, Mr Obama's chances of winning a second term are under 50 per cent.

In fact, in the case of the seven successful re-election bids, the national unemployment rate averaged 5.17 per cent. Only once since 1948 had an incumbent president - Ronald Reagan - been re-elected when the national unemployment rate was over 5.5 per cent. Interestingly enough, not unlike Mr Obama, Reagan's first two years in office were dominated by a stream of bad economic news, with the national unemployment rate at 10.8 per cent in November 1982, but falling to 7.2 per cent by the time of the election in November 1984.

Moreover, coming out of a painful recession, the American economy had grown by 4.5 per cent in 1983, and would end up growing by an additional 7.2 per cent in 1984. But no serious economic forecaster expects Mr Obama to 'do a Reagan' with the American economy before next year's election. If anything, public opinion polls suggest that Americans are dissatisfied with the way Mr Obama has managed the economy and are in a very depressed mood about the future of the country.

That by a large margin, moderate independent voters - a voting bloc that tends to determine the outcome of national elections - share these sentiments explains why no gambler is going to bet his or her fortune on an Obama victory next November. Yet the models that political pollsters use to predict elections' results are not a product of exact science, and may not take into consideration many changing political and social variables, with the most dramatic being the shifting demographic trends, not to mention unforeseen developments such as an earth-shaking international crisis.

So it is not inconceivable that notwithstanding the lousy unemployment numbers, Mr Obama could win re-election. Consider the following four scenarios: Firstly, the momentum of the economic recovery could help change the mood of the voters. Just a slight improvement in the job numbers, with the unemployment rate falling to, say, less than 8 per cent next year, could make a difference.

Most Americans have figured out that Mr Obama was not responsible for the financial meltdown and the ensuing Great Recession, and recognise the magnitude of the economic crisis. They just do not believe that Mr Obama's policies have worked. A sense that the economic recovery is finally getting on track could help change the attitudes of many independent voters.

Secondly, it all depends on the Republicans' choice of presidential candidate. The conventional wisdom is that at the end of the day, the Republicans will get smart and despite their lack of enthusiasm about former Massachusetts Governor Mitt Romney, they will choose this moderate Republican who could be in a position to win the support of independent voters. But if the Republicans under the pressure of the Tea Party wing of the party end up selecting as their presidential candidate one of the more radical and controversial figures vying for their support in the primaries, they are going to make it more likely that Mr Obama will emerge as the winner.

Thirdly, Mr Obama's electoral coalition of 2008 could prove to be decisive once again in 2012. Indeed, Mr Obama's election victory three years ago highlighted the growing electoral power of new alliance of young voters, educated urban professionals, Hispanics, and African-Americans, that together helped produce a Democratic win in 'red' and 'purple' states like Virginia, North Carolina, Ohio, Colorado, and Nevada, where the traditional Republican electoral base - older white Americans and blue-collar workers - is eroding.

The main question is whether these 'Obama voters' are going to show up in large numbers next year like they did in 2008.

Fourthly, it is not inconceivable that the current diplomatic tensions between the US and Iran could evolve into a full-blown international crisis, including a American-led quarantine of Iranian ports. A dramatic face-off between Mr Obama and Iran's Ayatollahs is bound to provide the Commander-in-Chief with a political boost and help him win the election.

The prospects for a slight improvement in the economy, for a Republican presidential candidate other than Mr Romney, for young voters going to the polls, and for a confrontation with Iran, explain why no gambler is going to bet his or her fortune on an Obama defeat next November.

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Stacy Jacobs said...
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