To understand this post, you’re going to have to read two articles. But I promise you, even if you don’t bother reading my commentary, both articles are worth your time. The first is by Nate Silver, the New York Times’ political statistician, who writes for and started http://fivethirtyeight.blogs.nytimes.com/. (As a sidenote, if you don’t read this blog, you’re missing out). The article I’m referencing this time is Mr. Silver’s very pessimistic analysis of Obama’s chances in 2012: “Is Obama Toast? Handicapping the 2012 Election“. The article uses fairly complex and in-depth statistical analysis, combining approval ratings, economic performance, and potential opponent ideology to gauge his chances. Mr. Silver provides analysis for four alternate worlds: Romney and a stagnant economy, Romney and improving economy, Perry and improving economy, and Perry and stagnant economy. In the two worlds where the economy remains stagnant, Mr. Silver argues that Obama’s chances of remaining in office are very low. If you want more detail than that, you’re going to have to read the article. Needless to say, the article caused a lot of controversy.
As someone who would like to see the President back in office for a second term, I was depressed by this article, because my hopes for the economy aren’t that high. But fear not! The second article you need to read is in my other favorite publication, The Economist, entitled “A Very Good Week”. The article articulates, in very cautious terms, that this past week indicates that there could be some hope yet for the American economy. The article cites some recent reports that indicate that things could be on the mend:
America’s Bureau of Labour Statistics reported today that non-farm employment grew 120,000 in November from October and the unemployment rate plunged to 8.6% from 9%, its lowest level since the latter stages of the recession in early 2009. The job growth was a tad below the Wall-Street consensus of 125,000 and well short of what the ADP survey on Wednesday had hinted. But the BLS also revised up previous months: non-farm employment grew 100,000 instead of 80,000 in October, and it advanced a whopping 210,000 in September, up from the previous estimate of 158,000. The fact that revisions lately have been positive is suggestive of an economy re-acclerating from its summer swoon.
Now, there’s a lot that could stop this upswing. If we continue to try to fight amongst ourselves with nothing but big sticks (think debt ceiling, our current political gridlock) improvement is going to be much harder to come by. I recognize that. And there’s a lot to be said for the debate that is going to ensue on how to maintain our recovery. And while I will make the normative claim that I want to see the President reelected, at the moment I’m much more interested in talking about and discussing the matter-of-fact debate on of who is more likely to win in the case of a potentially strong recovery in the economy. While Mr. Silver did note that Obama is going to have a tough time if the economy doesn’t improve, he did note that the President has a decent chance of getting reelected if the economy improves (using 4% G.D.P growth in 2012 as an indicator). If the President does end up squaring off against Mr. Romney, he’ll find that given a situation of 4% growth in G.D.P, he has (again, according to Mr. Silver’s calculator) a 60% chance of victory. If he goes against someone with a more conservative political viewpoint, represented in the analysis by Mr. Perry, his chances rise to 83%. Before, this situation seemed like a pleasant fantasy. Now, for Obama supporters, it’s a pleasant — dare I say it? — hope.