By J. Randolph Evans
People are hurting across this country in a very real way. Many are
using their savings accounts or retirement accounts to just get by.
Others live from credit card payment to credit card payment to make ends
meet. For some, it has gotten so desperate, that they see no hope.
At an apartment complex in Canton, Georgia, a father killed his wife and
two year old daughter, and then himself. His family faced increasing
financial troubles and were in the process of moving out of their
apartment. It is bad out there.
Against this backdrop, the latest unemployment numbers were released and
they were not good. The number of unemployed Americans increased for a
third consecutive month to reach 9.2%. No new jobs of consequence were
created during the last reporting period.
The news was actually worse. Government officials actually revised
downward their reported unemployment numbers from May. Basically,
belatedly, government bureaucrats are now confirming what individual
Americans already knew – it is not getting any better out there.
The current bad numbers do not even give an accurate picture of how
desperate things are. Many Americans have just given up and stopped even
looking for jobs that are not there. The number of Americans in this
category is not included in the depressing June numbers.
Even for those fortunate enough to have a job, the news was bad.
Average earnings dropped and average hours dropped. With the Federal
Reserve lowering its projections for economic growth, there does not
appear to be any end in sight.
Of course, all of these economic indicators have political impact.
Currently, every American knows someone who has lost their job and is
facing an uphill battle to find one. Virtually every American finds
this current economic plight to be completely unacceptable.
Americans have been here before with Presidential elections looming on
the horizon. In 1976, Democratic President Jimmy Carter faced
reelection with economic problems everywhere. His ‘malaise speech’
suggesting that Americans learn to live with it (i.e., accept it as the
new normal) went over like a lead balloon.
His big smile and comforting southern style was no substitute for
performance. Yet, during his tenure as President, inflation and
unemployment (together dubbed ‘stagflation’) were on the rise. His
government bailout solutions (like the Chrysler Corporation Loan
Guarantee Act of 1980 also known as the federal government bailout of
Chrysler) did not work.
When President Carter started his Presidency, he had a 66% approval
rating. By the time he left, it had plummeted to 34%. In his
reelection bid, he constantly pointed back to the state of things that
he had inherited – the Watergate Scandal aftermath, an energy crisis,
and escalating inflation.
But, Americans are never much interested in blame. Instead, Americans
are only interested in solutions and their votes showed that. In 1980,
President Ronald Reagan defeated incumbent President Jimmy Carter.
President Reagan received 489 Electoral votes; Carter received 49.
In 1992, Republican President George H. W. Bush also faced reelection
amidst tough economic times. His tenure in the White House was plagued
with rising deficits and a slowing economy. His solution was to raise
taxes notwithstanding his election year pledge of “no new taxes.”
Unemployment would steadily inch up until it reached 7.4 % in the summer
of 1992. The Census Bureau reported that 14.2 percent of Americans
lived below the poverty line. President Bush’s response was to say that
things would improve and that the fundamentals were in place.
Thanks to his success in kicking Iraq out of Kuwait on the heels of the
collapse of the Soviet Union and the fall of the Berlin Wall, President
Bush’s popularity soared. But, it was not enough. As the economy
worsened, his approval ratings plummeted to just 37%.
History would later confirm that Americans actually liked President
Bush. Indeed, his approval rating as he left office was 56%. But that
was not enough. President Bill Clinton defeated President Bush in 1992.
President Clinton received 370 Electoral Votes; President Bush received
only 168.
James Carville, President Clinton’s strategist, said it best: “It’s the
economy, stupid.” That was true in 1976 and 1992. It will be true in
2012.
If unemployment remains above 9%, then President Obama will be a
one-term President regardless of who the GOP nominee is. If
unemployment drops below 7%, then President Obama will likely be
reelected regardless of who the GOP nominee is. If unemployment is
between 7% and 9%, it will be an uphill battle for the incumbent
President.
Pointing to what he inherited (like Carter reminding folks of Watergate)
will not change it. Relying on personal popularity or foreign policy
victories (like Bush and the Kuwaiti war) will not change it. Saying
things are working will not make it true.