At lunchtime today, I’ll be among a few hundred people listening to economic forecasters from the University of Georgia tell us what to expect next year in the state and nationwide. It’s tempting to think there’s no point in going, since pretty much every forecast I’ve seen lately suggests we’re in for more of the same sluggishness.
And if that turns out to be true, the most pointless question in the GOP presidential primary may be the one about which candidate is the most “electable.” For, at that point, it would be rather difficult for most of the candidates to lose to President Obama.
To name one example: The prognosticators at the OECD (the Paris-based club of industrialized nations) proffer that the U.S. economy will be stuck at 2 percent growth next year. That’s the same rate, thanks to yet another downward revision to our economic estimates, we experienced between July and September. It was during that time that Obama’s public-approval rating for his handling of the economy reached the lowest point of his presidency in Gallup’s tracking poll: 26 percent, with 71 percent disapproval.
It has since “recovered” to 30/67, which is a recovery only in the sense of the word the Obama administration used last year in touting the “Recovery Summer.”
This, even though the economy has achieved what Obama’s economic advisers said was necessary when selling his “stimulus” bill in 2009. Quietly, Americans have returned to our pre-recession spending habits, with consumer spending now surpassing its previous peak, as Reason’s Tim Cavanaugh reports. Government spending is higher, too. Aggregate demand, that keystone of Keynesian theory, is back to normal. The economy, as you may have noticed, is not.
Yet, Obama’s economic proposals reflect the belief that more demand is what’s really needed. Aside from the purely political point that this ensures a continued contrast between him and the eventual Republican nominee, it also means Washington is unlikely to adopt any policies that spark a sudden uptick in growth.
Sluggish growth is one of the biggest differences between this year and 1996, to which some liberals point hopefully as a time when an incumbent Democrat overcame a rough first term thanks in large part to a middling GOP field. Inflation-adjusted GDP growth during the past four quarters is almost one percentage point lower than over the comparable period of time in Bill Clinton’s first term. The unemployment rate, which hasn’t been below 8 percent since Obama’s first full month in office, is more than three percentage points higher.
If that remains the case, it means Obama may plumb new, Carter-esque depths in the public’s approval of his economic policies. And it most likely means the number of Republican candidates who can’t beat Obama will be smaller than the ranks of those who can.
– By Kyle Wingfield