The emphatically positive conclusion to Tuesday’s roller-coaster ride on the stock market was just the latest development in five days of economic tumult that have churned up President Obama’s already uncertain reelection prospects.
A late-afternoon surge did not fully dispel the broader gloom rooted in the S&P downgrade, the 634-point Dow collapse on Monday and the realization that, despite better-than-expected job numbers Friday, unemployment remains extremely and stubbornly high.
Many experts assert that while the president might not yet have reached a point of no return on the economy, he will have to defy a number of historical precedents in order to win a second term.
“I would not bet on Obama today — absolutely not,” said Douglas Hibbs, a former Harvard professor who created a famous model for predicting the outcome of presidential elections.
Even those who might be expected to be ideologically sympathetic to the president worry that he will come to be seen as a present-day Jimmy Carter — an ineffective bystander to American decline.
Barry Bosworth, a former economic adviser to Carter, told The Hill that Obama “lets the basic policy direction be determined by other people, and then he accedes or doesn’t. The leadership qualities in both [Carter and Obama] were weak, unfortunately.”
This view finds an echo from Glenn Hubbard, who served as chairman of President George W. Bush’s Council of Economic Advisers from 2001 until 2003.
“If he were more vigorously pressing for whatever policies he believes in then — whether or not I would agree with him — I think voters would cut him more slack,” Hubbard said.
Obama’s defenders insist that he could yet be seen as enacting the right policies to guide the country through treacherous waters, even if the results are not fully evident by Election Day 2012.
They point to President Reagan as an unlikely parallel. Reagan won reelection by a landslide in 1984, despite a historically high unemployment rate of 7.2 percent.
David Plouffe, Obama’s top political adviser, offered a version of this argument last month.
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“People won’t vote based on the unemployment rate. They’re going to vote on: ‘How do I feel about my own situation? Do I believe the president makes decisions based on me and my family?’ ” he said, according to Bloomberg.
Obama received another good piece of news Tuesday from a new Gallup poll, which showed the president erasing the GOP’s advantage in a generic survey.
Forty-five percent of registered voters said they would pick Obama, versus 39 percent who would favor “the Republican Party’s candidate,” according to the poll.
Still, the Fed gave a pessimistic view of the economy, which is the main reason doubts are creeping in about Obama’s reelection prospects.
Hibbs’s most recent notional prediction, based upon the first two years of Obama’s term, is that he would win just 46.2 percent of the national vote, a result that — assuming no peculiarities such as a strong third-party candidate — would translate into a heavy defeat.
“The economy is capable of very rapid growth,” Hibbs said by way of caveat. “We could get 5 percent growth from now until the election and he’d be fine. But that is not the way it’s turning out. The economy is very, very slow. Talk of a double-dip recession is not off the wall.”
The “Bread and Peace” election-prediction model devised by Hibbs holds that presidential elections are largely determined by two factors: personal income growth and the cumulative fatalities that the U.S. is suffering in foreign conflicts.
The war in Afghanistan does not, in Hibbs’s view, amount to a serious threat to Obama’s reelection, despite tragedies like the recent one in which 30 U.S. troops lost their lives. (The president on Tuesday attended the ceremony at which the troops’ bodies were brought home.)
The economy, however, is a different matter.
A more promising model, from the White House’s perspective, is the one devised by Ray Fair, an economics professor at Yale. His equation is centered upon rates of growth in GDP and in the “GDP deflator,” an indicator broadly similar to the inflation rate.
Under Fair’s current assumption of 3.6 percent GDP growth in the first three quarters of next year, the president would win 53.5 percent of the vote, a figure almost identical to that achieved in 2008.
But this projected growth rate is, as Fair acknowledged, “quite optimistic.” Speaking to The Hill on Monday, as the stock market cratered, he added that the economic numbers were conditional upon various assumptions of relative stability, including in the asset markets. This, he admitted, “is already looking quite dicey.”
If growth from now until the election remained as weak as it was during the first quarter of this year, at 0.4 percent, and inflation remained the same, Fair’s model would predict a 50.28 percentage vote-share for Obama — a nominal win, but one that is easily within the 2.5 percentage-point margin of error. A double-dip recession would probably doom the president.
Statistical modeling is not an exact science, as even its adherents make clear.
“Of course there are idiosyncrasies that matter,” Hibbs said. “If the Republicans delivered a gift from Tea Party heaven and put [Rep.]Michele BachmannMichele Marie BachmannBoehner says he voted for Trump, didn't push back on election claims because he's retired Boehner: Trump 'stepped all over their loyalty' by lying to followers Boehner finally calls it as he sees it MORE [R-Minn.] at the top of the ticket, or even went for a double-whammy of Michele Bachmann and Sarah Palin — well, that ought to do it” and all but guarantee Obama’s reelection.
Obama’s defenders also point to the apparent resilience of his personal appeal and to the possibility that he can reinvigorate the organizational framework that delivered his 2008 victory.
But one thing seems sure: Unless the nation’s economic trajectory changes, and fast, Obama’s bid for a second term will be facing the stiffest of headwinds.