Monday, April 25, 2011

Handicapping Obama

There have been 11 presidents during my lifetime. Three of them were defeated when they ran for reelection. What does this mean for President Obama's reelection chances?

The three that were defeated were Gerald Ford, Jimmy Carter, and George H. W. Bush. There were significant differences between these presidents. Only Carter won the office on his own. Ford inherited the office from Nixon, and Bush was Reagan's chosen successor. Regardless, the parallels with these three presidents should be keeping the Obama team up nights.

Like Obama, all three had stratospheric approval ratings early in their presidency. Both Ford and Carter came to be seen as nice men who were in over their heads. Bush never seemed incompetent but he was seen as being out of touch. Most importantly, all three ran during economic downturns and seemed clueless about how to handle the economy.

Ford started his administration with a huge store of good-will. He was originally appointed to be vice-president when Agnew resigned over a scandal in 1973 and became president less than a year later when Nixon resigned so he was viewed as an outsider to the Nixon White House. He also came to office after American troops had withdrawn from Viet Nam so his presidency was seen as the start of a new era. Unfortunately he was unable to work with Congress and quickly became known for the number of bills he vetoed as well as the number of vetoes overridden. Most important, both unemployment and inflation topped 7%. Ford tried to control inflation with what amounted to a public relations campaign called WIN (Whip Inflation Now). It was a total failure. Ford's pardon of Nixon is often cited as the reason he lost the election and it was certainly a factor but if the economy had been solid then the fallout over the pardon would not have made a difference. Ford's foreign policy was also seen as weak. During Ford's administration North Viet Nam invaded South Viet Nam. Ford was unable to convince Congress to deliver military aid money promised by the Nixon administration. Consequently, many on the right, starting with Ronald Reagan, blamed Ford for losing Viet Nam.

Ford's weakness was shown when Ronald Reagan ran against him in the primaries. Ford won easily but Reagan gained national exposure and enthusiastic supporters.

Jimmy Carter seemed to come from nowhere and ran as a Washington outsider and as someone untouched by the Watergate scandal. He won in a very close election. Unfortunately for Carter, the economy did not improve. He had popularized the term "misery index", the inflation rate added to the unemployment rate, during his campaign but was unable to improve it. Instead it went from 12.72 to 19.72, the highest on record. On top of that, oil prices spiked because of an Arab oil embargo. All of this gave Ronald Reagan a major campaign point - "Are you better off now than you were four years ago?" Carter had little success working with Congress and was seen as weak overseas. During the Carter administration communism was seen as expanding into South America and Africa and the USSR invaded Afghanistan. Iran went from a friendly country to a hostile Islamic theocracy. The low point for Carter came when Iran invaded the US embassy and took the staff hostage for 444 days. The common perception of Carter was of a nice guy who wasn't up to being president. As with Ford, Carter's weakness was shown when he was challenged in the primaries, this time by Ted Kennedy. While Carter easily captured the nomination, he lost a close election to Ronald Reagan.

George H. W. Bush won the 1988 election on a promise to continue the Reagan Revolution. He lost a lot of support from conservatives over a tax increase and passage of major legislation such as a revised Clean Air Act and the Americans with Disabilities Act. His popularity spiked with the successful conclusion of the Gulf War but dropped because of concern over the economy, especially unemployment, the trade surplus with Japan, and the deficit. He was seen as out of touch. He openly admitted that foreign policy interested him more than domestic policy. Worse, a picture of him vomiting into the lap of the Japanese Prime Minister seemed to summarize trade relations. He lost a close election to Bill Clinton.

In all three cases, the president's reelection campaign never seemed to catch on. Carter and Bush had run near-perfect campaigns for their first terms but their reelection campaigns never really caught on. All three seem to have assumed that incumbency was everything and that a sitting president should be able to win easily. All three had problems running on their accomplishments or downplaying problems during their administrations.

Most important, all three ran during an economic downturn. As the Clinton campaign pointed out, "It's the economy, stupid". The voters want a candidate who will make the country more prosperous.

So, what does this mean for President Obama? The lessons here are do not favor him. First, his policies only produced a weak recovery which is constantly in danger of tipping back into recession. If that happens or if inflation continues to rise then he is in trouble. If both happen then he will loose. The misery index is already the 4th highest in post-war history. Unemployment is declining but the news media is full of stories about rising prices. A good bit of inflation can be linked to Obama's economic policies. The weak dollar was supposed to help the export business but it causes the price of imports to rise and his energy policy includes burning 40% of the nation's corn as fuel which affects food prices. The electorate is also worried about the deficit and the long-term solvency of Social Security and Medicare. Obama's signature accomplishment, Obamacare, is still hurting him as much as it helps him. A smart Republican challenger will concentrate on Obama's economic record and ignore Obamacare.

Like Carter and Bush, Obama will have to mount a completely different campaign for 2012 than his 2008 campaign. He can no longer run on "hope" and "change". Now he has to run on solid accomplishment or lack of it. He has not come to terms with this change. He has talked about trying to recapture the excitement of the 2008 campaign but that was a challenger's campaign. For reelection he will need something like Reagan's Morning in America campaign but that goes back to Obama's problem with the economy.

I've left the challenger for last. A weak challenger can help a president's reelection campaign. Mondale in 1984 and Dole in 1996 were deep establishment candidates who lacked any excitement at all. Mondale ran on a campaign of raising taxes.

Much has been written in the last few weeks about the weakness of the Republican field. It is wrong. This is too early in the cycle to have a clear front-runner. At the beginning of 1978 no one knew who Jimmy Carter was. Reagan was considered too radical to ever be elected. The Bush administration was openly cheering for Clinton, expecting that he had too many negatives to be electable.

Reagan and Clinton are instructive. Before Reagan, no one thought that a candidate who had been divorced and remarried was electable. Clinton had multiple affairs while governor and had used drugs while in college. Either of these should have disqualified him (not to mention Obama who openly admitted that he used cocaine in college). If a candidate's negatives are well-known ahead of time then he can still win.

Where does this leave President Obama? I have identified three factors that he needs to worry about and only one is under his control.

The challenger - Mondale and Dole were establishment candidates who got the nomination because their parties "owed" it to them. There is no Republican establishment candidate right now and if there was, the Tea Party would sink him. The best that Obama can hope for is someone prone to misstatement.

The economy - Obama has already had his shot at this. It will recover or it won't. The Fed has run out of options and any economic incentives will have to be acceptable to the Republicans.

The campaign - This is the only thing that Obama can control but he needs to change his message. No more complaining about the crappy phone or how the job is tougher than he expected. No more complaining about "hostage taking". No more "car in the ditch" analogies. No more blaming Bush. Absolutely no more talk about how much easier the head of China has it. He has to be seen as comfortable in the office and firmly in control. He has to talk about what he has done and why he should continue. He is the most powerful person in the world. In order to keep that position he has to be present himself as a strong leader. The election has to be about him, not the Republicans.

It is still too early to know how this will turn out but I place Obama's chances around 50/50 depending on the economy. If gas prices, inflation, or unemployment are top stories this time next year then Obama will likely be a one-term president.

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