The very capable Ben Smith wrote a somewhat strange story last week. It’s conventional wisdom that economic conditions are a very important factor in a President’s reelection, especially now as we crawl out of a very deep economic hole. The premise of Smith’s piece is that Team Obama is mulling over when and how to handle the recovery in order to most effectively capitalize on it for 2012. Here’s where it loses me: Almost the entire thing is about White House messaging.
What Obama says doesn’t really affect how people think about the economy. In fact, it’s the inverse that makes economic performance so politically potent. When people feel the economy is doing better, their impressions of the President and his policies improve no matter what he might be saying or doing. It’s retroactive too. If the economy takes off, watch opinion shift on a variety of issues from Obama’s first term.
Smith points out that public perception often lags behind real economic indicators, but at the risk of getting into semantics, I’d say that economists’ definition of a recession is slightly different than the layman’s. Most people intuitively define recovery as a return to normal levels of employment and gauge whether or not conditions seem to be getting better at a good clip — how am I doing vs. last year? Obama’s is not a political communications problem.
Remember Recovery Summer? The Obama administration, throwing some caution to the wind, declared the recession over. They weren’t really wrong by academic standards, but polling suggests Americans never really bought it. That’s not because they don’t have a compelling argument. (It should be noted that while Austan Goolsbee’s whiteboard videos are great fun and very effective messaging, um, I’m pretty sure 99.9% of voters don’t know what an “Austan Goolsbee” is.) The problem is that growth, while positive, was downright anemic and unemployment was still above 9%.
That’s not to say political pursuits are useless. If Obama believes in his own economic policy team and their initiatives — and there’s no reason to think he doesn’t — a much more effective way to expend political energy would be to try to push for policies (or appoint people in a position to enact them) that in his opinion can accelerate recovery. The House Republican majority is a major barrier to Democrats’ preferred action: fiscal stimulus, “investment,” targeted tax breaks or what have you. There was plenty of all that in Obama’s budget, but it’s a nonstarter in the lower chamber.
But Obama could, for instance, turn up the heat on the Senate to confirm Fed nominee Peter Diamond, who would tilt the Fed’s board of governors further toward Obama’s vision for monetary policy, which can have its own profound effect on the economy. He could have another nominee lined up and ready to be pushed through swiftly when Kevin Warsh steps down at the end of March. He could prepare a political case to veto short-term budget cuts that he thinks would cost jobs, public sector or otherwise. Those things aren’t going to create economic seachange and of course aren’t guaranteed to have the effect Obama might hope, but they’re at least more productive than trying to convince people the broader economic situation isn’t what it seems.