Second Quarter 2012 GDP Numbers Could Benefit Mitt Romney If President Obama Ignores The ‘Fiscal Cliff’:
Mitt Romney and the Republicans have alleged for months that the U.S. economy is in decline. Now they have confirmation that the U.S. is no longer growing based on the GDP numbers that were released yesterday. The Commerce Department said Friday GDP fell from 2.0 to 1.5 percent in the second quarter of 2012 and these numbers will impact President Obama’s chances of reelection. Businesses have trillions of cash on the sidelines and aren’t willing to invest in an economic environment marred by uncertainty, regulation and fiscal policy bickering.
The gains in the housing market have retreated, Ford and GM’s stock fell to new multi-year lows suggesting the automobile market isn’t turning around and unemployment has remained above 8 percent for 41 consecutive months. The second quarter 2012 earnings calendar was filled with negativity. Consumers are cutting back on iPhones, Starbucks and a host of other non-necessities as prices begin to slowly rise for food based on a battered corn crop due to drought conditions.
A Bain Of An Existence
President Obama’s reelection campaign has focused on Mitt Romney as an individual and there is some evidence the efficacy of these attacks is waning. Regardless, Romney is better served to have these assertions made in July 2012 as opposed to September and the public has become somewhat indifferent to more news about his taxes, Bain capital and how many cars his family owns -especially when each new report about the economy shows more weakness.
Romney hasn’t even fully laid out his own economic plan demonstratively and he has an advantage on President Obama in terms of what people think he can do to turn around the economy. This is a problem for President Obama and without making clear what his vision is for the future aside from championing the 99 percent, (most of whom don’t vote) the polls could continue to slide for him.
Mitt Romney is by no means in the clear, but for him to be polling better than an incumbent president in several aspects related to the economy is considerably predictive. Democrats haven’t had a two term president except for Bill Clinton since the Truman years and most presidents aren’t reelected with 8 percent unemployment or more.
The unemployment rate may not budge much for July 2012 and that will be another recent data point that shows President Obama has struggled with making change on the economic front – recently. With possible government shutdowns in every year of his presidency or fiscal cliff-like issues present at all times, it’s hard for the economy to have a growth spurt that usually occurs after a steep recession.
It’s time for President Obama to bargain on aspects of the “fiscal cliff” before it’s too late. He could be better served to pass the ‘Bush/Obama’ tax cuts and should not double down on class warfare rhetoric that marginalizes the business community. It may not be working.
Romney must continue to collect data that compares this recovery to prior recessions and show why he could be a better economic leader. President Obama must compare this recovery to his predecessors and what he ‘inherited’.