Why Obama Isn’t Doing Better Despite All The Good Economic Numbers

by evanmcmurry

A question is making the rounds of the left side of the internet: why isn’t Obama doing better now that we have honest-to-God-no-fooling proof that the economy is on the uptick, a situation that crystalized in the unemployment rate’s recent descent to under eight percent? Here’s Howard Fineman, scratching his noggin:

The Obama campaign, and the Obama presidency, haven’t done a consistent or convincing job of touting whatever good news there is — and there are increasing amounts of it — about the economy. Yes, the unemployment rate remains high; yes, the “right direction/wrong track” poll numbers remain negative (though not as negative as they once were); yes, millions of Americans remain underwater on their mortgages while big banks horde cash and pile up huge profits.

But there is another side to the story, and the Obama campaign hasn’t sold it well, beyond talking, justifiably, about the success of the auto bailout. Consumer confidence is at its highest point in five years. The stock market has come back from the late Bush-era crash. Home starts and hiring are up. Venture capital groups are lending money again. If you don’t talk about the good stuff, no one else will.

This is merely the left’s version of the question Mitt Romney has been asking his campaign chairs and his mirror for the past five months: “Why am I not winning despite 8.3% unemployment?” As the GOP caviled that Romney was doing a poor job prosecuting Obama’s performance, Dems are now wondering why Obama won’t do a better job touting it.

Readers of this blog should already know the answer: Obama’s been benefiting from the improving economy this whole time. As Jamelle Bouie argued, quite convincingly, the heuristic that says that incumbent approval rates follow unemployment rates has never actually held: incumbent approval follows GDP growth (or lack thereof), which most of the time correlates to the unemployment rate. But not always: the economic recovery we’ve been experiencing in the past year has seen an increase in GDP that’s outpaced jobs added. In other words, the economy has been growing faster than the labor market, and sure enough, Obama’s approval rating slowly but steadily increased along with it. This was why job report after job report was released this summer showing desultory gains in employment without any of them having an effect on the race: the growth of the economy was palpable to voters (see also the increase in the consumer confidence index, whatever it is), no matter how many more-in-sorrow-than-anger post-jobs-report press conferences Mitt Romney could call to claim otherwise.

The flip side is that Obama’s already benefited from the good economic numbers we’re seeing now. He wasn’t being punished for bad jobs reports, because voters were rewarding him for the growing economy—but that also meant that there was no additional reward when evidence of the growing economy presented itself in the form of the unemployment rate dipping below an arbitrary threshold. The increase in Obama’s poll numbers that liberal bloggers are looking for now has already happened; it was, if anything, a lucky break that Obama was able to benefit from the economy without having to campaign on it explicitly, as many are now advising him to do, and thus run the risk of alienating swing voters who have yet to see their situation improve.

Obama’s sudden stagnation in the polls has many explanations—his poor debate performance, the dimming of the successful DNC’s afterglow, etc. But for now, we can at least speculate that there exists a ceiling to the amount voters were willing to reward him for the economy, which is not, after all, improving to the extent that it should be, whoever’s fault that is (hi, House Republicans). Which means Obama’s 49%-ish approval rating is the highest he could attain on the economy alone. Once he hit that, he had nowhere to go but down, and Romney was able to use a strong debate performance to begin chipping away. Obama could, by all means, still mount a successful defense of his economic policies (as opposed to continue to justifiably criticize Romney’s math-is-hard-just-trust-me proposal), but it’s more likely than not to produce significantly diminishing returns.