As June begins and the election inches closer, the question bedeviling the president and his advisers is this: What case will Barack Obama make on his own behalf to undecided voters over the next five months?
That must have been on their minds yesterday, as they surveyed the cascade of disappointing data.
“All the economic data was bad,” wrote Joe Wiesenthal of Business Insider.
The gross domestic product for the first quarter of 2012 was revised down to 1.9 percent from the original 2.2 percent. The previous quarter saw a respectable growth rate of 3 percent; the revision means an already worrisome slowdown just worsened by about 14 percent.
The anemic nature of the economic recovery, as the American Enterprise Institute’s James Pethokoukis notes, can be measured by the fact that GDP growth in the past five quarters has been 0.4 percent, 1.3 percent, 1.8 percent, 3 percent and now 1.9 percent.
We also learned that initial jobless claims for the week rose to 388,000 — up from 370,000 the week before. The general consensus had been that it would remain around 370,000, so the higher number came as a troubling surprise.
Meanwhile, job cuts rose 53 percent from April to May, according to the firm Challenger, Gray and Christmas — the worst such monthly jump since September.
Nationally, reports the payroll firm ADP, “manufacturing employment dropped 2,000 jobs, the second consecutive monthly decline.” Manufacturing-sector growth is key to any serious recovery.
Maybe the unemployment numbers released this morning will show a reduction in the rate. But if so, that will almost surely be due to a decline in the overall size of the labor force. In other words, it won’t be that more people have found jobs, but that more have joined the ranks of those not even looking for jobs.
And it’s not just these data points that make the prospects for economic growth in the coming months mediocre. They are shadowed alarmingly by the deepening crisis in Europe: It is increasingly likely that Greece will pull out of the euro and default on the billions put up for its bailout. Meanwhile, Europe’s fourth largest economy, Spain, may need a giant bailout of its own.
The world is preparing itself for a general European recession. Money is flooding into US Treasury bonds as a safe harbor. Demand is so high for Treasuries that the interest rate the US government must offer has dropped to an astonishing low.
“You have no growth, no inflation, huge fear and a shortage of safe assets,” Wiesenthal writes.
And this is the atmosphere in which Obama must now make the argument that he deserves a second term.
Every president who wins re-election has such an argument. Reagan 1984: “I’ve brought America back.” Clinton 1996: “I’ve turned the economy around while shrinking the deficit.” Bush 2004: “I’m keeping America safe.”
The presidents who don’t win a second term seem to base their campaigns on an argument against the other guy. Carter 1980: “Reagan is a madman.” Bush 1992: “Clinton is personally unworthy of this high office.”
The Obama team must know that they can’t prevail solely with a negative assault on Mitt Romney, but really, what is the positive case?
Ordering the mission to kill Osama bin Laden isn’t a case; it could be an important element of a larger argument about his stewardship if it connected to anything larger. But he hasn’t done that, and it’s hard to see where it fits in.
There’s an element of bad political luck here for the president, especially when it comes to Europe. And he’s just not used to bad political luck.
In 2004, running for US Senate in Illinois, he got an enormously lucky break when an unprecedented judicial ruling made public some ugliness from child-custody proceedings that caused his strong Republican rival, Jack Ryan, to withdraw and left Obama to face an absurd GOP challenger.
In 2008, he enjoyed good fortune in the Democratic primaries in large measure due to the shocking incompetence of Hillary Clinton’s political team, which didn’t actually understand the rules governing delegate selection. Winning the presidency with three years of national political experience under his belt was probably the luckiest event in the history of American politics.
He needs a lucky break of some kind between now and November. Hard to say what it could be, since it would by definition be unexpected. But without it, he’s not going to win a second term.
Not under these conditions.