The Real Recovery Has Arrived: Who Will Carry the Burden of the Counterfactual in 2012?

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In April of last year, Michael Grunwald wrote a sharp piece clarifying Barack Obama’s central re-election challenge: The hallmark achievements of his first term have been prophylactic. While stopping a recession from becoming a depression, reinforcing a health care infrastructure already groaning under the burden and cost of America’s sick, or thwarting domestic terror plots might sound good, they don’t lend themselves easily to a re-election message. “He is the counterfactual President,” Grunwald wrote. “And as his aides often complain, ‘I prevented a disaster’ is a lousy political slogan. Or as Democratic Congressman Barney Frank of Massachusetts has put it, ‘It would have been even worse without me’ ain’t much of a bumper sticker.”

Obama’s chances have always been tethered to the tremulous economy, and it was on that issue that the President had the most difficult case to make. Three and a half years after the financial crisis, unemployment is still  high. Americans never thought much of the $700 billion stimulus program Obama championed. And no matter how eloquent the President might have been  in describing the dire state of things when he took charge or the seeds of disaster he says Republicans sowed in their prior eight years of rule, Obama’s argument could be neutered with four simple words uttered by his opponents to the voting public in 2012: Are you better off?

But for the first time in his presidency, there’s a glimmer of a chance that Obama won’t have to rely on this tortured counterfactual. February unemployment numbers released Friday showed robust job growth and upward revisions from December and January as well. Payrolls swelled by an average of 245,000 per month over that period. The public sector losses that have put a major drag on employment are tapering off–just 7,000 government jobs were lost in the first two months of the year. A real recovery, in line with historical rates of economic rehabilitation, has finally arrived.

If it continues, it could shift the burden of the counterfactual to Republicans, completely rebalancing the 2012 presidential race. Mitt Romney (most likely) would have to make the case that things would be much better now if Obama had not hampered the economy with onerous regulation. Rather than asking Americans if they’re better off, he’ll have to dive into the weeds of Big Government gone bad and persuade voters that Obama is not realizing America’s full potential.

Romney and his advisers, wary of this eventuality from the outset, are beginning to adjust. Where he once described Obama as a nice guy out of his depth, Romney is now preparing a “prosecution” of the President’s economic record and how it has “hurt the middle class, given more and more people concerns about their jobs and prices, and put downward pressure on households.” Persuading Americans that they’re not OK has become part of his task. “Incomes have not risen. Gasoline prices are high,” he recently told CNBC. “The idea that everything’s fine out there in America comes from people who are detached from America.”

It is not a given that the economy has reached escape velocity from the misery of the Great Recession. Normal employment is a long way off. The Fed continues to expect “modest” economic growth throughout 2012, especially in the summer months. A surge in jobless Americans who had previously given up hope could return to the labor force, driving up the unemployment rate. There are enough financial explosives packed into the banks and treasuries of Europe to level the global economy if that continent’s leader are unable to defuse their crisis. Oil prices are high. And there is not sufficient polling data to tell us that the voting public is feeling hale. But the last three months have been good. And Obama may finally be able to argue that the last three years were too.

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