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July 8, 2012 8:17 pm
It is an electoral truth universally acknowledged that if the economy is doing badly the incumbent will lose. In the last 14 months more than half the eurozone’s governments have been ejected. History tells us the same fate ought to be awaiting Barack Obama, who inherited an unemployment rate of 7.8 per cent in 2009 and is likely to go to the polls in November with joblessness still above 8 per cent. Most Americans are worse off than they were four years ago. Why then do most pundits expect Mr Obama to win?
Look no further than Mitt Romney. If there is anything we can be sure will remain weaker than the US labour market between now and November it is Mr Romney’s electoral skills. Supporters of Mr Romney point out that his business experience should inspire voter confidence. Yet it is worth remembering that in almost two decades of campaigning, Mr Romney has only once been elected to public office – in 2002 when he became governor of Massachusetts.
Even his recent victories in the Republican primaries were begrudging. With opponents like Herman Cain, Rick Perry and Rick Santorum, Mr Romney ought to have swept all before him. Yet it took unprecedented help from some of America’s richest magnates to get him over the finishing line. As Newt Gingrich recently said when asked why he failed to clinch the nomination: “Romney had sixteen billionaires. I only had one.”
In an economy – and thus an election – defined by middle class pain, Mr Romney comes from the wrong side of the tracks. Last week he spent most of the July 4 holiday hosting the “Romney Olympics” at his lakeside mansion in New Hampshire. We also learned that Mr Romney holds no less than nine offshore bank accounts in places like the Cayman Islands and Bermuda. It does not matter how many blind trusts you set up, in most people’s eyes offshore accounts spell tax avoidance.
The surprise Supreme Court ruling upholding Mr Obama’s healthcare law also reminded us of how many contortions Mr Romney feels obliged to undergo to keep the sceptical Republican base onside. Instead of jumping on the court’s reclassification of the “penalty” as a “tax” – as every other Republican had done - Mr Romney’s campaign insisted it was a penalty (to protect his conservative record in Massachusetts, where he also levied a health insurance penalty). Then last Thursday he changed his mind again and called it a tax.
The ruling had offered a chance to focus on Mr Obama’s alleged excesses. Mr Romney’s “Etch a Sketch” campaign (after the toy that can be erased and restarted again) only drew attention to its own contradictions. Among his public detractors are now Rupert Murdoch and Jack Welch, two tycoons who usually back the Republican to the hilt. The fact that Mr Romney raised a record $100m in June – more than George W. Bush spent in the entire 2000 election – only underscored the nominee’s problems. The wealthy like him. Few others seems to.
Yet the White House is there for the taking. By whichever measure you choose, Mr Romney ought to be the odds-on favourite. America’s already anaemic recovery has once again wound down to a halt. Friday’s jobs report meant that June was the third month in a row in which the US labour market has failed to keep pace with population growth. Unemployment has been above eight per cent for 41 months – a comfortable post-war record. No president since Franklin Roosevelt has been re-elected with joblessness higher than 7.4 per cent.
The consumer numbers look even worse for Mr Obama. According to Bill McInturff, a Republican pollster, the Michigan Consumer Sentiment Index is a better predictor of presidential elections than the unemployment rate. Last month the index fell to 73.5 – well below the 78-point average for a losing incumbent. The average for a winning incumbent is 95. Given that median incomes are continuing to decline, it seems inconceivable the index will rise into winning territory by November.
The same outcome holds for the presidential approval rating. No sitting president with ratings of below 50 per cent has been re-elected since 1956. Mr Obama’s numbers have been stuck at below half for most of the last two years – touching 50 per cent briefly in the early months of this year when jobs growth looked to be picking up. Since March it has not exceeded 47 per cent. The average approval for a winning incumbent is 56 per cent, a level Mr Obama has no realistic hope of attaining.
With numbers like these, Mr Obama should be the underdog. Instead, Mr Obama and Mr Romney between them may be pointing out the limits to election forecasting models, which overlook a candidate’s skills – or their absence - in favour of things that can be measured. Einstein once said not everything that can be counted counts, and not everything that counts can be counted. Pollsters agree that most voters do not really start to pay attention to an election until the presidential conventions in late August and early September. This time round the US public’s indifference is palpable (almost half of voters admitted to pollsters last week they were ignorant of the Supreme Court’s ruling).
But there are two things we know will remain true when voters do rouse themselves in September; the economy will still be weak and so will Mr Romney. Mr Obama can do nothing about the former and a great deal about the latter. Expect him to do so.
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