Debt is not 0bama's PROBLEM, it's his PLAN!
Posted on 04/18/2011 11:57:53 AM PDT by neverdem
Though 18 months out, narrative for 2012 elections is already created
As the old phrase about voter sentiment goes, “it’s the economy, stupid.” And like it or lump it, one of the reasons President Obama rode to victory in 2008 was a foot-in-mouth moment from opponent Sen. John McCain during the height of the market meltdown.
That famous gaffe was a quote from McCain that “the fundamentals of our economy are strong” while the Dow Jones tanked 500-plus points or over 4% in a single day on Sept. 15, 2008.
Whether McCain’s words were taken out of context – the senator claimed he was waxing philosophical about the fundamental strength of the American economy and its workers – is irrelevant. In politics, it’s less about reality and more about what the America people believe and what the media chooses to focus on.
I don’t pretend to know what will happen with the economy or the stock market between now and November 2012. But as a former opinion page editor for a daily newspaper, I’d like to think I have a pretty good sense for the behavior of politicos and the mainstream press. And based on current trends, here are 5 issues I think that are going to be front and center in the coming months as the presidential contest comes into focus.
And as you’ll see, all five of these issues could work decidedly against Obama’s re-election.
The Fed
Personally, I believe that criticism of the Federal Reserve is overdone. Every sane economist agrees that an independent central bank is crucial to a functional economy, though intelligent people can and will disagree about the level of oversight necessary for such an important institution.
But people like to blame someone in hard times, and with the dual mandate of both fighting inflation and fighting unemployment the Fed is the perfect whipping boy. Gasoline prices are soaring and unemployment remains stubbornly high as the sheer enormity of the unemployed means the recent jobs added to payrolls is just a drop in the bucket.
What’s more, voters don’t appreciate nuanced positions. As a friend of mine says, “ The chicken in the middle of the road gets run over.” Ron Paul and his tea party buddies have decisively staked out a position against the Fed – and as long as rhetoric doesn’t spin out of control with promises of a gold standard or legislation demanding the Fed chairman be subject to popular vote, Obama’s opponents have the high ground on this issue.
Unemployment
As I just mentioned, payrolls just can’t grow fast enough to erode the high unemployment rate. Consider that in March, about 216,000 nonfarm jobs were added – and that didn’t even move the needle from an 8.8% jobless rate. If the economy needs to add a million jobs a month to significantly draw down that glaring percentage that so easily fits into headlines and news teasers, Obama is in big trouble.
Logically, it’s not Obama’s fault. From December 2007 to October 2010, a total of 7.5 million jobs were lost in the U.S. The unemployment rate peaked in the summer of 2009 at about 10.6%, the highest since 1983, and the average unemployment rate across that brutal year was the highest average since 1948. That’s a heck of a deck to be playing with.
But we are a nation of fast food, short attention spans and instant gratification. Heck, four years ago the iPhone didn’t even exist! One presidential term is a lifetime to an electorate, and a lack of progress will be seen as a failure no matter how rough the situation was when the incumbent took office.
Family Finances
The average American consumer is poorer because of the financial crisis, according to a survey released by the Federal Reserve. How can this be, considering the market is off only about -13% from its 2007 peak?
Well, because housing values have fallen off a cliff – and if you’ve seen a 20% decline in the value of your $300,000 loan, that’s a cool sixty grand you’re in the hole on paper. Also, many folks had to tap 401k plans or savings to get through lean times due to a job loss. Lastly, while many savvy investors bought the bottom of the market in 2009 many others panicked and headed for the hills – or were left holding the bag on Lehman Brothers, Fannie Mae, AIG, Citigroup, GM or a host of other investments that could have crippled even a diversified portfolio.
Like the unemployment picture, a family’s rainy day fund or retirement nest egg can’t be replaced overnight. But unfortunately for Obama there is no wiggle room in the question, “Are you better off now than you were four years ago?” Considering that the worst of the financial crisis came to roost in 2009 via staggering unemployment and foreclosure trends, the answer for many voters will be a decided “no.”
U.S. Debt
If you look at any line graph representing U.S. debts, you’ll notice that the gut-wrenching climb started about 30 years ago – and aside from a tiny dip in the early 2000s, the trend has been steadily upwards year after year.
This is not President Obama’s fault. But it is now his problem.
However well-meaning the healthcare legislation was and however effective it would be in reducing costs over the next several years, it was poorly timed. Expanding government’s reach at the very moment America acknowledged how bloated federal spending has become was unwise. The immediate $787 stimulus can at least be defended with estimates of jobs and platitudes about how it was an immediate reaction to an emergency. No such luck with the slow-starting healthcare legislation.
What’s more, while I fully believe that tax increases will be a necessary part of balancing the budget and tackling our enormous debt, Obama’s suggestion of taxing higher earners alongside his spending efforts conveniently paints him as that old cliché of a tax-and-spend liberal.
Unfair? Incomplete? Sure. But that’s how elections are decided.
Gas Prices
Inflation could very well move from boring economic theory to serious campaign issue in the coming months. Most Americans don’t need an MBA to understand that food is costing more and coming in smaller packages , TVs and electronics aren’t as affordable as several months ago — but wages have remained pretty stagnant. In fact, in the last consumer price index report the real hourly wage was reported at November 2009 levels — despite a headline inflation number of about 2%.
Oil, and more specifically gasoline, is the biggest inflation story right now and could be even bigger in the run-up to Election Day.
Picture this TV ad in September of 2012 – first, signs of $4 gas prices in 2008 and soundbites of citizens complaining on the local news. Then, fade in video of $4 gas prices in 2012 and similar comments from select voters who take shots at the president.
Powerful stuff, eh? Anyone who needs strategists or campaign advisors for the upcoming election, contact me via information below.
Jeff Reeves is editor of InvestorPlace.com. As of this writing, he did not own a position in any of the stocks or funds named here. Write him at editor@investorplace.com, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook.
Messaging for 2012:
0bama’s had four years. What do we have to show for it?
Hated 0bamaCare
Failed Stimulus
Record Unemployment
Massive Deficits
High Gas and Food Prices
No Plan for Improvement
If you can name one thing that is better under 0bama, vote for him.
Otherwise, throw the bum out!
Debt is not 0bama's PROBLEM, it's his PLAN!
Unfortunately, the Saudis can flood the market with oil just in time for the election, and create $2.00 gas.
It might cost them a few hundred billion dollars, but really, how cool is it to own the American President?
And yet Donald Trump will do his best to ensure that Obama will be elected again. Much like Ross Perot in 1992, Donald will enter the presidential election as a third party alternative to Obama and the Republican candidate. He will siphon away a small portion of the Dem and Republican bases and solidly split the independants who would have voted against Obama and for the Republican. I wish Trump would stick to his calling... Huge land deals that end in bankrupcy.
Thanks for the link.
We need the right candidate and he can be defeated. So far, I don’t see anyone in the GOP field that can take him on and has the stomach to do it.
We need the right candidate and he can be defeated. So far, I don’t see anyone in the GOP field that can take him on and has the stomach to do it.
Thanks for the comments & graphs!
This just means they’ll blame “Big Oil” and most of the populace will nod in agreement.
The most significant factor providing substantial support for Obama is the breakdown of morality, decency and fairplay.
Wisconsin gangsters proved this on April 16 in their efforts to destroy Sarah. They were vicious, vulgar and vile to a person. There was no civility or decency among them.
This is the character of the Obama presidency and it will increasingly be the character of his reelection campaign.
“Every sane economist agrees that an independent central bank is crucial to a functional economy,”
‘So Frederik Hayek was insane?’
Thanks for saying it first. The author of this piece sounds so liberal, it’s not funny. And while I may not be an economist, I’m certainly insane, according to his definition. What a crock.
HMMMM I think you are not looking.
Well, then, we'll just have to do away with voters!!
Bring back the property qualification .... begin at about $100,000,000 for openers. Everybody above that level probably "gets it".
Here are a couple of others:
One, you forgot liberal single women. There is a large cohort of these, who form a cadre within the liberal wing of the Democratic Party. They have master's degrees, many of them, and overall they're the best-educated piece of the social pie cut up by Pew Trusts' sociology survey in 1999 (and written up in watered-down form in Newsweak). They are hardcore 'Rat and ideological gender-fems. They're married to the 'Rat Party and their leftist icons.
Two, you forgot the media, who voted 90% Rat in the 1972 Nixon landslide. Watergate was in large part their revenge, their getback, their proof-of-thesis that "the American People are TOO STOOPID to hold, much less generate, an opinion." Too stupid, in other words, to be allowed to vote on anything resembling their own values. Hence the kind of filtering, blackguarding, and mass-manipulation that now calls itself "journalism".
And Three, you didn't mention the undermining of the Right by Power Gays, who run no fewer than five PACs dedicated to identifying and destroying family-values politicians at the alderman and county-commissioner and state-representative level, before they ever begin to attract public notice. They direct huge fluxes of San Francisco sodomite dollars into local races across the country, to deprive social conservatives of representation and a voice.
He does seem to exude a sort of breezy contempt that suggests an "I'm-allright-Jack" sort of wealthy liberal, doesn't he?
Liberal or RiNO, not much difference really. Many of the same policy choices, except for fiscal politics.
He took office in Jan 2008.... and the Pelosi Democrats are entirely responsible for the conditions that Obama walked into.
Wonder what that would show?
Even better, would be a technique to prove, statistically, mindless bias in journalism, and generate a vectored index of that.
Fortunately, the database will be preserved ..... patiently awaiting the genius who'll figure out a mathematical expression to prove and quantify bias and lying in journal content.
It don’t look good. Obambi is no disposable redneck like Jimmah, but a representative a newly privileged and untouchable caste. The U.S. voters are the jury that voted NOT GUILTY on O.J. Simpson in Santa Monica.
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