With Fractured GOP, Election May Be Obama's to Lose
Policy + Politics

With Fractured GOP, Election May Be Obama's to Lose


While squabbling Republican presidential candidates seem bent on  destroying their prospects for winning back the White House this fall, President Obama is being helped by a deluge of good economic news that he is using to argue  his policies are finally taking hold. After three years of tumultuous shifts in the nation’s economic fortunes, key indicators ranging from employment, construction and retails sales to housing starts and stock prices are all  up.

Employers added 200,000 jobs last month, the sixth consecutive month that the economy showed a net gain, according to the Labor Department. The new job starts covered the gamut , from  manufacturing, transportation, warehousing, construction and restaurants.

What’s more,  in trying to repair his frayed relations with industry and business and inoculate himself from stinging Republican criticism this fall, Obama and top administration officials have taken steps to quiet the tumult over his health care reform law and new regulations being imposed by the Environmental Protection Agency and other regulatory organizations. They have done that in part by granting states more leeway to determine  the basic benefits packages for private insurance. And they have put on hold anti-smog and mercury pollution rules that industries warn will greatly adds to  their operating costs.

Political and economic experts say it’s far too soon to say whether Obama has finally turned the corner on his political and  economic problems.  But with former House Speaker  Newt Gingrich and Texas Gov.   Rick Perry attempting to bury  Mitt Romney in South Carolina with a ton of ads portraying the former private equity executive as a heartless corporate “vulture” and job killer, the 2012 presidential election may soon be Obama’s to lose.

Obama has helped his own cause by taking a more combative stance against congressional Republicans

“Essentially, Obama is better off than he was four months ago,”  Republican pollster John Zogby told The Fiscal Times Thursday. “But there are 10 or 11 months to go, and  a lot is dependent obviously on the economy --  which seems to be moving in a better direction.  And a lot depends on whether the GOP can heal its fracture, and right now, there’s a considerable fracture. It’s going to be very hard to see them hugging each other.”    

Brad Bannon, a Democratic activist, agrees it’s too soon to predict what will happen this fall. But he said Obama has helped his own cause by taking a more combative stance against congressional Republicans and attempting to move further to the political center to reach out to middle class whites and blue-collar workers who have favored GOP candidates in the past.

“In the jobs speech the President gave right after Labor Day and in his Theodore Roosevelt speech in Kansas, the president has put the focus on bad boy corporate behavior,”   Bannon said. “The president's new tone also brands himself with jobs and the GOP with obstruction and Wall Street. This sets up the battle with Romney in the fall.”

Obama campaign strategists and Democratic pollsters can barely contain their glee over the scorched earth Republican campaigning going on in South Carolina, where Gingrich and his aides have signaled they are willing to take down the Republican ticket if Romney, the former Massachusetts governor, is nominated.  Gingrich said yesterday he would not back off as a Super-PAC supporting him began airing a scathing video denouncing Romney’s role as founder and CEO of the equity investment firm Bain Capital for buying, reengineering and selling many companies for big profits while frequently eliminating many  jobs. Romney contends that some of those transactions led to a 100,000 net increase in jobs, and he and his allies express dismay that Gingrich and Perry are  are essentially using Democratic “class warfare” rhetoric.

While Romney, Gingrich and  Perry are sharply arguing once settled GOP dogma on the sanctity of the free enterprise  system,  Obama has been stepping up his appeal to the middle class with speeches stressing “shared prosperity” and concern about the vast income disparities in the country.

“ Given the bad economy, I doubt they are any more amendable to Obama's candidacy this year.”

“I have a different vision,” Obama said in a campaign speech in Chicago Wednesday night.  “Our vision is based on the notion that everybody deserves a fair shot, everybody has to do their fair share, and everybody has got to play by the same set of rules. And America succeeds best when we're all in it together, we're all rising together.  And that big, inclusive, generous, bold, ambitious vision of America is what's at stake, is what we're fighting for.”

Obama did relatively poorly with white, low-to-middle income voters in 2008 – especially in West Virginia, Arkansas, Kentucky, and part of Ohio. “Given the bad economy and how that group has suffered in the past few years, I doubt they are any more amenable to Obama's candidacy this year,” said Larry Sabato,   a University of Virginia political scientist.  “People vote on real economic conditions, as they have seen and experienced them in their own families and communities, not in response to generalized rhetoric from politicians, no matter how pleasing the sound of the words.”

White, working class voters have been the key to the Republican ascendancy over the last half century. Richard Nixon was the first to court both southern whites and the so-called “hard hat” vote, which were traditional Democratic constituencies. The 1980 realignment election hinged in large part on the crossover of so-called “Reagan Democrats,” white, blue-collar Democrats disaffected by the stagflation – simultaneous high unemployment and inflation – of the Carter years.

According to Ruy Teixeira, a senior fellow at the Center for American Progress who tracks voting patterns and changing demographics closely, this group has often provided the margin of error in both presidential and off year elections, even though their significance as a voting bloc is declining because their numbers are shrinking. President Obama, for instance, lost white, blue-collar workers by 18 points in his 2008 battle against Republican Sen. John McCain of Arizona, yet still won the election with over 53 percent of the total vote.

In 2010, on the other hand, with voter turnout down significantly, Republicans across the country won the non-college educated white workforce by a stunning 30 points. “Republicans have to win that group by crushing margins to win elections,” Teixeira said.

That’s why the attack on Romney’s performance at Bain could prove telling in the November election. The Super PACs  backing the president in all likelihood will hammer away at the theme, just as Gingrich’s Super PAC has done during the primaries. That could cause some white working class voters, even if they don’t vote for Obama, to stay home – an enthusiasm gap that could hurt the likely Republican standard-bearer.

Obama’s reelection campaign will face economic weather marked by gentle breezes pointing in a generally favorable direction. While that would be more than adequate in normal times for a political candidate, it’s not the kind of headwinds Obama needs. Unemployment is still at 8.5 percent and economic anxiety pervades the middle and working classes, which are the traditional backbone of the Democratic Party.

The 2012 forecast put out late last week by Mark Zandi of Moody’s Analytics, which has been consistently optimistic about the effects of administration stimulus measures, projected the economy would only grow by 2.6 percent this year – a rate typically seen when an economic recovery has already matured. “There will be little improvement in job growth and no significant reduction in the unemployment rate,” he wrote clients.

A detailed preview of the economy released Thursday by top bank economics pegged growth at just 2.4 percent for the coming year, enough to add about 1.6 million new jobs. That’s no better than 2011. “Despite severe shocks in recent years, the economy has shown resilience as it continues a gradual march forward," George Mokrzan, the chief economist at Huntington Bank, said.  “We’re moving from a difficult environment to one that is slowly starting to improve.”

Indeed, 2012 could well turn out to be the year when the foundation for a solid recovery from the Great Recession finally is laid – provided there is no major international crisis in Europe or the Middle East to send the economy reeling again. Housing and the aftereffects of the burst housing bubble have been the biggest drag on growth. But the bank economists predicted new home sales will jump 10 percent next year, housing starts will rise by 13 percent, and the slump in home prices will finally reach a bottom. Zandi added: “While the economy this year may not be all one might hope, it is shaping up to exceed expectations by mid-decade.”

In other words, whoever wins in November will inherit an economy that has finally put the financial crisis behind it. Given the current improvement in the economy, “You'd rather be Obama than his GOP challenger,” Sabato noted. “But the conditions of 2012--as much as we can divine them --aren't ideal for an incumbent president seeking reelection.