Unless things change dramatically (it would take something like a new war) there will be only one issue in the 2012 election for president and most other government offices. The issue of which candidate has the best ideas to get the economy moving is the most important question in most elections and there are good reasons for this. Real wages have been stagnant for American middle class families even through boom and bust business cycles for decades going back to the 1970s. Rising standards of living for the middle class have been earned only by more members of the family entering the workforce (especially women) and people working multiple jobs and longer hours, when they are able to find employment.
Two Candidates in Search of an Economic Message
Even though Mitt Romney successfully identified himself as the “economy candidate” against a weak Republican field, he has yet to articulate an economic vision that gives voters a sense of what he would do differently than either Barack Obama or George W. Bush to create good jobs and opportunity. If Mitt Romney had something to say about the economy, we mean really had something to say about the economy, he would not have remained in the tough fight he slogged through for many months to secure the nomination.
President Barack Obama would also be in a lot better position if he could clearly articulate a confidence inspiring economic vision. The President has been struggling, with mixed success, to shore up this weakness and find a compelling economic message. Often it seems Mitt Romney does not even realize he doesn’t have much of an economic message at all.
“Obama Has Failed”
During the primary campaign Romney succeeded in establishing himself, at least among the press covering the race, as the “economy candidate” because he talks about the economy all of the time, but his emphasis is almost entirely on current economic woes and very little on his economic proposals. The message is simply: Obama promised to fix the economy; the economy is not fixed. I was a businessman; I will fix the economy. God Bless America.
When Romney does speak at length about his proposals, there is little outside of Republican economic orthodoxy – less government regulation (especially environmental regulations), a bit of union bashing, lots of specific tax cuts, much less specificity on spending cuts, and a promise of lower national debt. In other words, there is almost nothing in Romney’s economic playbook that was not in George W. Bush’s campaign speeches in 2000, and we all know how that worked out for the economy.
Like most Republicans, Romney wants a semi-permeable embrace of Paul Ryan’s budget; wanting to claim a share of credit for the idea of major budget cuts, but not willing to stand with specific proposals. We see this when Romney continues to attack Barack Obama for proposing cuts in Medicare, even while praising Ryan’s budget that starts with these Obama cuts in its assumptions and proposes dramatically deeper reductions in Medicare spending.
A relatively new element in Romney’s speeches is multiple versions of the Reagan question “Are you better off now than you were four years ago?” The danger is many middle class families may remember what the economy was really like fours ago, when financial markets were in free fall and seizing up, home values were crumbling, and the economy was shedding hundreds of thousands of job per month. The question invites Obama spokesman Robert Gibbs’s effective response, that the essential Republican argument is that Obama did not clean up the mess Republican policies made of the economy fast enough.
So voters are correct when by 58% to 31% they tell a recent FOX News poll they do not think Mitt Romney has a clear plan for fixing the economy. But despite Romney’s weakness, Obama fares no better in the FOX poll with 36% saying Obama has a clear plan to fix the economy and 61% saying he does not. In two other recent polls for NBC News and the Wall Street Journal and CBS News and the New York Times Romney leads Obama on the question of who has better ideas to fix the economy.
Obama Needs Clarity (and Charts and Graphs)
At this point President Obama has been favoring tactical economic proposals like the Buffet Rule and student loan financing over offering a strategic view of his economic proposals to help create economic opportunity for middle class families. Voters are confused because they do not know whether Obama is the big spender Republicans have been telling them he is (and they are pretty sure they saw, at least until Democrats lost the 2010 election) or the budget cutter he has been for the past two years in his efforts to make deals with the Republicans.
We have argued for some time that if Democrats believe they have a better grasp of economic policy, and they do, then they should join the battle and debate the issue full on. Obama has consistently shied away from the challenge of explaining his basic economic philosophy of balanced, fiscally responsible Keynesianism — that during a major economic downturn short term budget deficits are good even though long term deficits threaten disaster – believing that it is just too complex of an argument. But it is what the President truly believes and to earn reelection, he has to own it. These economic principles underscore the basic premise of the Simpson Bowles Commission, and they are the heart of the “Grand Bargain” on taxes and spending Obama tried to negotiate with Speaker of the House John Boehner.
But instead, Obama’s arguments for the “Grand Bargain” were made behind closed doors, rather than clearly before the people the economic policies are intended to help. The individual elements each got their week of promotion by the President and his surrogates, but rarely (perhaps with the exception of the economic section of the State of the Union address)was there an effort to explain the whole economic vision. Obama needs to own his economic views, and explain why he believes they offer middle class families the best hope to reverse the long term trends and provide the economic opportunity for middle class families and their children.
If the argument is simple enough for a bumper sticker, that’s great, but if not that is ok too. With millions of dollars in the bank, Team Obama can afford longer format communications including charts and graphs like H. Ross Perot or Al Gore in An Inconvenient Truth. With Republicans continuing to push a supply side economics theory that failed to deliver on its promise that tax cuts would lead to lower deficits for Ronald Reagan (so he raised taxes 11 times), and George H. W. Bush who had to break his “read my lips, no new taxes” pledge, and George W. Bush who had to abandon his small government philosophy with billions in bailouts for the financial sector to avoid a financial meltdown and a global depression, and Bill Clinton the only recent president that delivered real wage gains for the middle class and balanced the budget, this should be a debate that Team Obama can win on the merits.
Just in the past few days there have been some encouraging signs that the Obama team gets it and some discouraging signs as well. Team Obama just released a new long format ad titled “Forward” that includes charts and graphs and was even made by the director of “An Inconvenient Truth.” It starts with a reminder of the mess George W. Bush created with his economic philosophy of small government, low taxes and antipathy toward regulation, and it has all of the star power of Bill Clinton and Tom Hanks.
But there is one element missing – middle class families. All of the emphasis is on the bailout of the financial sector, and the auto industry and the tough choices Obama made passing bills in Congress. The stories are told by senior advisors like Austin Goolsbee and Rahm Emanuel. What the video is missing is the stories of middle class families that were able to renegotiate loans and stay in their homes, small business owners that were able to get loans and hire employees, students that were able to finish college and get a job, construction workers that went to work building roads. And we need to hear from families that worry about long term deficits that appreciate Obama’s persistence in seeking balance and compromise even when the other side has all signed a pledge to never compromise, and Mitt Romney and every other Republican candidate for President raised their hand to promise that they would not compromise even for a deal that offered 10 dollars in spending cuts for every dollar raised in taxes.
This election is going to be won among independent and moderate, middle class voters. Barack Obama can win their confidence if he has confidence in who he is and how he approaches the economy. He has been seeking balance between short term and long term needs of the economy for his whole term. If he can talk to middle class voters and explain his economic vision in terms of people as much as policies, and explain how he will ultimately help families realize economic opportunity and long term prosperity, he will earn their support.