Betting on a bad economy

Patricio Navia

Buenos Aires Herald, February 7, 2012

 

The Republican presidential strategy counts on the economy remaining in bad shape up until election day. A sluggish economy and high unemployment will make a Republican victory easier, but will not guarantee it. Yet, if the Republicans campaign on a weak economy, even if modest and insufficient, an economic recovery will make it almost impossible for Obama to lose re-election.

 

Mitt Romney’s campaign strategy is squarely based on blaming Obama for the bad economic conditions in the country. Romney admits that Obama did not cause the crisis, but the former governor of Massachusetts claims that the first African-American president has failed to lead the nation out of the crisis. Americans tend to agree with this assessment. President Obama’s approval ratings have continued to slip. Americans have always believed that, at the end of the day, former President Clinton’s phrase got it right: “It’s the economy, stupid”.

 

Besides, other Republican favourite attacks do not carry as much traction with the general population. Extreme rightwing Republicans might enjoy it when some politicians question Obama’s birth-place in Hawaii or imply that the US president might secretly be a Muslim. Accusations of “unamericaness” or lack of patriotism on the part of the president might generate enthusiasm in the Republican base, but will turn moderate voters away from the party. The GOP must use as its main campaign platform a message that American voters will find appealing. Blaming Obama for the sluggish economy is thus not a bad strategy. However, since Republicans cannot control the evolution of the economy, their strategy depends on exogenous events. If the economy improves, their strategy will weaken. In addition, by focusing on the ills of the economy rather on what to do to foster growth and job creation, they risk being considered obstructionists and excessively negative.

 

President Obama’s campaign team is diligently preparing its defence strategy against the attacks. In his State of the Union address, Obama combined three messages to take on criticisms against his economic policies. He showed data indicating that the US economy was getting better. He blamed Republicans for opposing his pro-jobs agenda. Third, he warned that, if elected, Republicans would implement policies similar to those that caused the crisis in the first place.

 

Some recent economic data backs Obama’s cautious enthusiasm on the state of the economy. However, it would be foolish for the president to bet his campaign strategy on the economic recovery. If he did that, he would be making the same mistake Republicans are making by putting all of their eggs in the same state of the economy basket. To his economic optimism, Obama added harsh criticism of the Republican opposition in Congress. He has attempted to cast Republicans as obstructionists and unwilling to compromise. He will be likely to credibly make the case against Republicans in Congress. However, it will be harder to associate Mitt Romney, the presumptive Republican nominee, with the Republican leadership in Congress. The strategy might work against Republicans in Congress, but not against the Republican presidential nominee.

 

Third, Obama is making the case that if Republicans recover the White House, they will implement the same policies that created the crisis. This has turned out to be Obama’s strongest argument against Republicans. Given his low approval numbers, Obama seems to be campaigning on a lesser of two evils strategy. As he seeks to cast Republicans as closer to the wealthy 1% than to the struggling 99% of Americans, Obama is making a risky bet. The first African American president, an intellectual who comes from a unique family background and a former community organizer, is trying to cast himself as closer to the people than his Republican opponent. The fact that the likely Republican candidate is Mitt Romney, a wealthy Mormon born to an affluent family, will help Obama make his case. Every time Romney makes statements that show how distant he is from the reality of common Americans, the Obama campaign team smiles. When Romney offered Texas Governor Rick Perry to bet 10,000 dollars or when he commented that 300,000 dollars in speaking fees was not a lot of money, the Republican candidate gave ammunition to the message Obama will press during the campaign.

At the same time Republicans build their campaign message on blaming Obama for the slow economic recovery, the incumbent President is responding to his low approval ratings — but high likeability numbers — by asserting that Republicans would do a much worse job in helping the poor and steering the country back to the right track again. As usual, the campaign will be about “the economy, stupid”, but it will also be about which candidate is more credible. Romney will characterize Obama as likeable but incompetent. Obama will campaign on being apt for the job and will portray his rival as a wealthy and out-of-touch elitist Republican. If the economy remains in its sorry state, everything will come down to which candidate is more credible. If the economy improves, Obama’s chances will rise and Republicans will be sorry that they bet on the economy remaining sluggish.