Obama 2008 Presidential Campaign

Writing in Business Week, Hans Nichols announced that with the improvement in the President Obama’s chances for reelection in 2012 are improving as well.

He noted that the unemployment rate fell last month (from 9.1 percent to 9.0 percent) while unemployment claims dropped (by 10,000). And the outplacement firm of Challenger Gray & Christmas noted that government layoffs have slowed as well. Then he reviewed several different polls that showed improvement in President Obama’s ratings (each still below 50 percent), and then concluded that this mass of positive data is improving the president’s “political prospects.”

The data excluded from Nichols’ analysis shows a different picture. First, the real unemployment rate is nowhere near 9 percent, but is much closer to 15 percent, with some analysts suggesting more than 20 percent.

Second, the number of unemployed, if he had bothered to check the numbers published by the Bureau of Labor Statistics (BLS), was 13,967,000 in August and 13,897,000 in October, a decrease of 70,000 in three months, or a decline of one-half of one percent, hardly enough to mention much less build a case around. Thirdly, he gets the government layoffs number right: they have been continuing steadily. According to the BLS,

Government employment continued to trend down over the month with most of the October decline in the non-educational component of state government. Employment in both and local government has been trending down since the second half of 2008.

Which is a good thing, since government is an overhead that must be borne and paid for by the productive part of the economy. But Nichols is persuaded that the rate of government layoffs is slowing, which he takes as a positive: “Government sector lay-offs slowed to a near halt last month, signaling that one of the drags on hiring may be ending.” And since layoffs are slowing in the government sector, can government hiring be far behind? And that bodes well for the President, at least according to Nichols.

Some of the other historical data that Nichols misread included the chances of the President being elected when the unemployment rate is over 7.2 percent: zero. Said Nichols: “No president since 1936—when Franklin D. Roosevelt won his second term—has been re-elected with unemployment above 7.2 percent. Though that was the rate when Ronald Reagan won re-election in November 1984, the was growing at 7 percent at the time.” At present, even the White House is estimating that the unemployment rate will stay close to 9 percent through 2012.

As far as the polls are concerned, each of the two polls quoted by Nichols shows the President with less than a 50-percent approval rating in every one. What Nichols failed to do was check the other six polls tracked by RealClearPolitics.com, which showed all eight putting the President’s approval rating below 50 percent, with the average being 45.4 percent approving with 50.5 percent disapproving.

When Nichols touted the White House’s estimate that the would grow by 2.9 percent next year, he forgot to mention that that estimate was reduced by a full percentage point from June.

Some additional statistics for Nichols to ponder indicate the difficulty the President is going to have getting back to the White House for a second term. As noted by the Daily Mail last week, one in 15 people in are now living in poverty and almost 15 percent are on food stamps, an increase of more than 8 percent since last year. As Robert Moffitt, economics professor at Johns Hopkins University, said,

Recessions are supposed to be temporary, and when it’s over, everything returns to where it was before. But the worry now is that the downturn—which will end eventually—will have long-lasting effects on families who lose jobs, become worse off and can’t recover.

If the state of the will determine the next President, then Nichols’ attempt to paint a positive picture for President Obama is not persuasive. Perhaps the one job loss that will be unlamented will be that of the President himself, come November.

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