News
Obama cautiously optimistic about 2012
“If the uptick in economic indicators that we’ve seen here this month continues into the next month at the same general pace, it will be an interesting race and it will be very close, and there will be an opportunity for Obama to win,” he said. “If economic conditions deteriorate at all, I think he’s done.
“If they pick up significantly in the first quarter – I don’t know what that is, but something that is tangible for middle-class America, he probably gets re-elected,” Anderson said.
The White House is ready to have the president maintain a high economic profile, showcasing his bailout of the auto industry as a concrete example of an administration policy that saved job. Beyond that, Obama’s team wants to portray the president as a champion of the middle class.
“The battle is really over the long term because the Republicans have a fundamental theory that we can cut our way to prosperity, cut taxes for the wealthy, cut regulations, especially for Wall Street, and the economy will flourish,” Axelrod said. “We’ve tested that theory and it failed. Badly.”
“This notion that he’s been there, we should fire him and we should go back to what we were doing before the crisis is not a very strong argument,” Axelrod said. “And obviously to the degree that the economy improves it becomes less of an argument.”
Still, even economists friendly to the administration see contradictory signals in the end-of-year upswing.
On the positive side, the number of people applying for unemployment benefits has dropped to the lowest level since April 2008. At the same time, November’s dip in unemployment from 9 percent to 8.6 percent was partly the result of frustrated workers leaving the labor force and no longer looking to be hired. The private sector is hiring, but states, school districts and local municipalities are shedding jobs. Also, despite an increase in consumer spending, Americans are not seeing real income growth.
“For every positive indicator, there is an indicator on the other side that’s worrisome,” said Jared Bernstein, former chief economist to Vice President Joe Biden who’s now with the Center on Budget and Policy Priorities.
Mark Zandi, chief economist at Moody’s Analytics whose data is often cited by Democrats and Republicans, said that for all the encouraging signs, the economy still faces drags. That includes deficit reduction measures that helped reduce the debt in the long term but could cost the economy 1 percentage point in growth next year.
Washington politics poses its own challenges.
Copyright 2012 The Associated Press
