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Townhall Finance...
Obama’s 2.5 Percent
Stall
by Larry Kudlow
Wall Street headlines are full of fears of a springtime stall for the
already subpar economic recovery. And if that weren’t bad enough for
Obama’s reelection chances, a spate of new polls show Mitt Romney’s
economic-approval ratings are far outdistancing the president’s.
Even while the headline surveys basically show an Obama-Romney tossup,
it will be very difficult for Obama to pull out a victory this fall.
Traditionally, incumbents who poll below 50 percent are in trouble. And
with Obama consistently in the mid-40s, he has a tough uphill climb
ahead.
Of course, a subpar recovery has kept the president’s reelection hopes
in doubt for some time. Former Bush economist Ed Lazear calls it the
worst recovery in history. Okay. That may be a partisan shot. But
actually, the data points bear this out.
At roughly 2.5 percent growth, the Obama recovery is way below the 4.5
percent average since World War II. And within Obama’s 2.5 percent
economy, polling data show high voter anxiety over gas prices, home
values, and the ability to pay mortgages. Voters even worry that they
won’t be able to afford to send their kids to college.
The unemployment rate may have come down to 8.3 percent. But the
problem for several years is that discouraged workers have been
dropping out of the labor force. So real-world unemployment is
considerably higher than the official stats.
And if all this weren’t bad enough for the president, recent economic
numbers are going in the wrong direction: Initial jobless claims have
increased about 6 percent. Existing homes sales and housing starts have
fallen the last two months. Manufacturing, which has been a very
positive story (assisted by rock-bottom natural-gas prices from the
shale revolution), actually fell last month. And while retail sales
continue to be a bright spot, incomes after inflation -- including high
gas and food prices -- may not be keeping up.
Perhaps the most optimistic statistic is the Index of Leading Economic
Indicators. This measure has increased six straight months and stands
at its highest level in four years, a good sign that the 2.5 percent
trendline growth rate will continue without a double dip. But it’s
still only 2.5 percent growth.
No one can yet tell if any of the economic soft spots are reflected in
the latest polls. But the economic headlines read badly. And overall
disappointment on the economy is undoubtedly why former governor Mitt
Romney has such a strong lead in economic approval.
A Wall Street Journal/NBC poll puts that lead at six points. Rasmussen
has it at ten. And Quinnipiac has voter disapproval of Obama’s handling
of the economy at a whopping 56 percent.
At this point in the election cycle, Romney is in stronger shape for
November than almost anyone appreciates. He is consolidating political
support from all sections of the Republican party. And while the
economy is the biggest election-year issue, it’s also Romney’s greatest
strength.
Whether independent voters yet understand all of Romney’s
free-enterprise, merit-based, limited-government, tax-cutting policies
is not yet clear. Really, he is still introducing himself to the
general public. But what is clear is that the very same general public
is very unhappy with the economy, and blames President Obama for it.
Obama owns the economic angst. His big-government policies have not
solved it. All his finger pointing and blame-game, enemies-list excuses
are not working. That’s really what the polls are telling us. And
unless something very big and very positive happens to the economy in
the next few months, Mr. Obama is in a heap of trouble.
As for Mitt Romney, right now he may be the most underrated politician
in America. The odds of a Romney win come November look increasingly
good.
Read this and other articles at Townhall Finance
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