President Obama seems to be
enjoying some good luck in that the economy appears to be picking up
just in time for his re-election campaign. While the economy is still
weak by almost any measure, growth is likely to be in the 2.5-3.0
percent range for 2012. This should lead to the creation of close to two
million jobs and a modest drop in the unemployment rate.
That
is not much to cheer about in an economy that is still down close to
ten million jobs from its trend level, however compared to the recent
past, this is good news. And research shows that voters tend to focus
primarily on the direction of change. This means that if the
unemployment rate is falling and the economy is creating jobs at a
respectable pace throughout the year, President Obama stands a very good
chance of being re-elected in November.
This
explains the decision of the Republican Party to focus on the price of
gas. The price of gas has long played a pivotal role in US politics.
High gas prices will be forever a symbol of the economic malaise of the
Carter presidency in the late '70s. The drop in gas prices under
President Reagan was associated with a resurgence of America's political
and economic power.
The fact
that both the rise in the price of oil in the '70s and the subsequent
decline in the '80s had little to do with domestic policy decisions and
much more with international politics (e.g. the Iranian revolution in
1979) mattered little. President Carter got the blame for events beyond
his control and President Reagan got the credit.
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