Every presidential campaign features dueling narratives, and in 2012 the competing story lines are set: “Catastrophe avoided” vs. “recovery stalled.”
On the pivotal issue of the economy, Democrats will insist: “Without Obama, the recession would have been worse.”
The Republicans will respond, “Without Obama, the recovery would have been better.”
Both sides can deploy plausible arguments and persuasive evidence to make their case. But neither will get the chance to run the visceral, red-meat, base-rallying campaign they really want to conduct.
Sour new figures on unemployment and housing last week mean the administration can’t credibly claim that “Happy Days Are Here Again.” Meanwhile, the GOP must acknowledge that the stock market has made a notable comeback since its Great Recession lows—despite worrisome recent reverses—with a slight improvement on jobs, so they can’t invoke “The Worst Economy in 50 Years.”
Previous campaigns that peddled best-of-times or worst-of-times scenarios committed gross distortions of reality but for the most part delivered clear-cut victories. FDR convinced Americans that “Happy Days Are Here Again” in 1936 despite unemployment rates above 15 percent, and triumphed again four years later with joblessness still stubbornly above 14 percent. Even though the nation continued to suffer hard times and massive poverty after eight years of nearly uncontested New Deal rule, Roosevelt and his supporters emphasized perceived improvement from the darkest days of the early ’30s.
A half-century after the New Deal’s victories, Bill Clinton campaigned against George H.W. Bush as if he were running against the second coming of Hoover, claiming that his administration had imposed “The Worst Economy in 50 Years,” a line Republicans would love to recycle in 2012 if they possibly could. Actually, the recession of 1991 counted as relatively mild—lasting only eight months and officially finishing in March 1991, with unemployment peaking at 7.8 percent—a number Barack Obama would love to achieve at any time before November 2012. Nevertheless, Clinton’s “It’s the Economy, Stupid!” campaign convinced just enough independents to give him the 43 percent he needed for victory in a three-way race (thanks, Ross Perot).
With no prospects for a serious third-party challenger in 2012, the Republicans will win nothing with a mere 45 percent and will convince no one beyond the conservative hard core with an end-of-the-world campaign that seeks to exaggerate the economic wreckage. But the Democrats can’t continue to ignore that wreckage or go on blaming it on George W. Bush: Huge majorities of the public at large, and even half of Democrats, think the nation’s headed in the wrong direction and express dissatisfaction with the president’s economic management.
No postwar president ever won reelection with an unemployment rate above 7.2 percent—and Reagan achieved his ’84 landslide with that relatively high joblessness number because the situation had so dramatically improved from its painful peak of 10.8 percent, in November 1982.
Not even the president’s own economists believe that Obama will be able to cite a comparable improvement by Election Day. He will almost certainly face unemployment numbers of 8 percent or above, at least marginally worse than the 7.8 percent he inherited from Bush. What’s more, the decline in the all-important unemployment rate won’t come close to Reagan’s robust 3.6 percent; at the moment, the joblessness numbers have improved only 1 percent since Obama’s own worst figures (10.1 percent in October 2009).
This means the best Democratic defense for the president’s economic stewardship involves the now ubiquitous claim that without his heroic leadership and massive governmental intervention, duly rubber-stamped by a compliant Democratic Congress, the economic calamity of 2008-09 would have been even more devastating.
This line of argument faces two serious vulnerabilities.
First, the unpopular bailout of major financial institutions constituted by far the most significant, and successful, federal initiative to rescue the economy, and that program began under Obama’s reviled predecessor. The president can hardly claim that he saved the country by changing course economically when the only unequivocal triumphs of his economic policy, like lavish aid to more banks and the infusion of cash to auto companies, clearly followed the template established by the Bush administration’s TARP and were designed by the very president that Democrats demonize as the source of all our suffering.
Second, the assertion that “it would have been worse” without the costly stimulus package—or financial regulation, or health-care reform, or other Obama initiatives—contradicts the unambiguous record of recent economic history. The United States has experienced 12 recessions since World War II; all of them caused real pain but came to an end quickly, giving way to brisk recoveries and renewed growth. Only three of the 12 recessions lasted more than a year; “The Great Recession,” officially dated from December 2007 through June 2009, already counts as the longest on record at 18 months.
These downturns wounded Democratic and Republican presidents alike and provoked a wide range of responses, and in some cases no real response, from the federal government, but in each instance the nation returned promptly to normal and resumed the march of economic progress.
While Obama defenders argue that he deserves credit for extraordinary policies that ended the recession, at least according to statisticians, just four months after his inauguration, there’s nothing extraordinary about this outcome: All recessions end, whether a president responds to them actively or passively, with free-spending liberal fixes or tax-cutting conservative plans.
For the president’s Republican critics, the only exceptional aspect of the Obama economic record involves not the quick termination of the recession but the anemic nature of the recovery. In terms of unemployment rates and GDP growth, the Obama recovery may count as the slowest, most flaccid of them all: In the three years following the devastating Reagan recession, the U.S. growth rate averaged a robust 7 percent; two years after the Obama recovery’s theoretical commencement, the economy expanded at a barely perceptible 1.8 percent last quarter. Republicans can blame these disappointing results on huge increases in federal spending, an obsessive focus on health care over jobs, soaring deficits, and fiscal uncertainty that paralyze investment and expansion.
Of course, few voters will make their decisions based on sophisticated arguments about policy or history but will, rather, choose to fire or rehire the sitting president based on a gut reaction to economic conditions in the final weeks of the 2012 contest.
Given the likelihood that Democrats won’t be able to classify the state of affairs as altogether wonderful, and that Republicans can’t portray it as unequivocally woeful, nearly everyone expects a close and fiercely fought electoral battle. The outcome will likely turn on whether Barack Obama deserves blame because things are as bad as they are, or credit because they aren’t even worse.
Michael Medved hosts a nationally syndicated daily radio talk show heard by more than 4 million listeners. He is also the author of 12 nonfiction books, most recently The 5 Big Lies About American Business.