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Is it still 'the economy, stupid?'

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Dan Henninger at the Wall Street Journal thinks Obama’s weaksauce economy cooked Democrat geese during the midterm elections: “Low economic growth in the modern U.S. economy is a total, across-the-board, top-to-bottom political loser.”

Normally “economic growth” is an economist’s term of measurement. But during these six lost years, that bad data was physically felt. Barack Obama kept calling it the Great Recession. He got that right. Even the government’s statisticians felt it. Read between the lines of this paragraph in the federal government’s October employment report, on the eve of the election:

“In September, 2.2 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months.”

That reality killed the Democrats. If there’s one economist’s term of art the average person learned in the Obama era, it is“labor force participation rate.” It’s not good.

For decades after World War II, the U.S. economy had an annual average growth rate of 3.3%. Here are the growth rates for each year of the Obama presidency (World Bank data):

2009: -2.8%; 2010: 2.5%; 2011: 1.8%; 2012: 2.8%; 2013: 1.9%

You preside over that performance, you lose. The 2014 growth uptick arrived too late to save the Democrats. The economy was a spent political force for them.

Well, that makes sense… but why didn’t the economy sink Obama in 2012?  Henninger doesn’t really get into that, preferring predictions that “the Democratic path back to a level of economic growth that will protect its vulnerable members does not exist now,” so they’re probably going to have a rough time in 2016.

It’s been common wisdom that the economy determines the course of the presidential party’s destiny since the Clinton campaign’s famous coinage of “It’s the economy, stupid.”  Certainly economic performance was seen as an important factor before that, but the understanding since the Nineties was that nothing else matters as much – a materialist analysis that says nothing moves voters as much as pocketbook issues.  Everything else was supposedly a luxury to be debated in times of robust growth.

And yet, Barack Obama got re-elected with a moribund economy and a staggering increase in the national debt – exactly the sort of one-two punch that should have enraged pocketbook voters.  One factor that might be cited to preserve Henninger’s analysis is the media’s general complicity in selling a “recovery” narrative that pooped out over the past two years, as the public ran out of patience with Obama’s excuses.  Or you could say the early pre-emptive strikes against Mitt Romney, vampire vulture venture capitalist, effectively neutralized his ability to use the economy as an issue.

Still, I can’t help recalling how people had a pervasive sense that the economy was pretty bad in 2012, but they allowed themselves to be manipulated with other issues anyway.  They gave Obama a pass, bought some phony statistics about how he created a trillion zillion jobs, laid a good deal of the blame on the long-departed George Bush, and somehow allowed themselves to forget that the private-sector small businessmen Obama instructed them to despise were the primary engine of job growth.  Maybe that was a one-time fluke, a confluence of political tides that won’t come again soon, especially for as long as the public feels like it made a big mistake in 2012.  Or maybe the economy has grown so complex, so screwed-up, that people are willing to accept a wide variety of political explanations for both good times and bad.


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