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Presidential elections are always about the economy, unless they’re not.
As we wrote in Indecision 2008, this upcoming presidential election will not be decided based on personalities, spin, gender, race, age, or the candidate’s picks for Vice President. In many ways, it won’t even be about issues or party because the deciding factor transcends it all. For if there’s one truth we can draw from America’s history of presidential elections, it’s that the incumbent party gets voted out during times of economic crisis.
The People voted out Hoover, Carter, and Bush 41 for this very reason. Despite the strengths and charisma of FDR, Regan, and Clinton, any candidate in their position would have also beaten those incumbents. It just so happens that in each of these cases the opposition party nominated exceptional candidates. It was just as much the right time as it was the right person, and that’s the case again with Obama.
Since the announcement of Governor Palin as McCain’s running mate, the media and many others have chosen to ignore political truths in favor of irrational fears. It was an historic moment for Republicans in nominating its first woman to a presidential ticket. This was followed by cynical levels of praise for Palin’s experience on the right and overblown levels of outrage at her alleged policy positions on the left. The Republicans got a bounce in the polls coming out of their convention, which is typical, and suddenly the Democrats think it’s 2004 all over again.
First, let’s put those fears to rest. It’s painfully clear that the Dems were deeply scarred by the defeat in 2004, as if they thought it was a guarantee or that the Republicans used black magic to win. We were surprised as well. We attributed it to so-called values voters from the South and Midwest, who voted against their own economic self-interest in favor of social issues like abortion and gay marriage. It’s one thing, we thought, when rich Democrats vote against their economic self interest and quite another when it’s poor Republicans. How do you compete with that? But this wasn’t the deciding factor after all.
In hindsight, we realized another political truth: it is very difficult to defeat a sitting president, especially when the economy is good. In order to so, the opposition party needs to run an exceptional candidate and campaign, and he or she needs some major issues to run on. With the reelection of Regan and Clinton, the opposition parties knew it was a lost cause and nominated sacrificial lambs. With Bush 43, though, the Iraq war was going poorly and his approval ratings were down. The Dems seriously thought they had a shot. Unfortunately, Kerry wasn’t nearly convincing enough. What’s more, the economy was strong. At least that was the perception of the economy. Four years later, we realize it was all an illusion–a ponzi scheme stacked on a house of cards–and now it’s finally being exposed for what it always was. Which brings us to today.
When we wrote on September 2nd that “when the economy is in trouble, the incumbent party gets voted out every time,” this was not based simply on what had already happened in the economy but on what we saw just ahead. The bankruptcy of Lehman Brothers and forced sale of Merrill Lynch to Bank of America are just the beginning of the end to this financial crisis, which could play out for years. Housing prices will continue to drop, further eroding the perceived wealth of the middle class. The big banks estimated a peak to trough drop in housing values of 20% when it’ll be in excess of 40%. More pain ahead. What’s certain is that economic conditions will continue to worsen as we approach election day. Even before Black Sunday, the economy was polling 2 to 1 as the most important issue of the election. And regardless of who’s fault it actually is, the incumbent party will shoulder most of the blame. That’s a political truth.
The only X factor in this election is race. We don’t think it’ll overcome the economic issue, but this election might end up being closer than the outright landslide it otherwise would have been if Obama was 100% white. Sad but true.
Apologies for going so off topic, but these are important issues that imapact our broader quality of life. The financial crisis and environmental crises have tremendous parallels.
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