IT’S THE ECONOMY STUPID, THE SEQUEL
Back in 1992, political consultant James Carville coined the phrase “the economy, stupid” as one of the three top campaign messages for the presidential campaign of Bill Clinton.
While it was initially designed for only the Clinton staff, it eventually became the overall message of the campaign and the main rationale why the incumbent George H. W. Bush should be defeated.
Twenty-four years later, another Clinton is running for President, but this time as the de-facto incumbent. Hillary Clinton recognizes the severe economic problems in the nation; however, she vows to continue the policies of Barack Obama. Her only answer is to be more progressive than Obama. She promises to raise more taxes and expand government even more, with free college tuition and expanded Obamacare. In contrast, Donald Trump promises to cut taxes, restructure “bad” trade deals, end Obamacare, and expand domestic oil exploration. Unlike Clinton, Trump vows to protect coal industry jobs, while both candidates claim they will return more manufacturing jobs to the country.
The problem for Hillary is that millions of Americans are suffering financially and the overall economy is not doing very well. Once again, along with national security, the main issue in this presidential race will be “the economy, stupid.”
Today, the latest key indicator was announced, showing our economy grew at an anemic rate of only 1.2% in the second quarter. This was approximately half the level of growth expected by most economists. The report is especially troubling since the economy only grew by .8% in the first quarter and .9% in the last quarter of 2015. An economy in recovery should be growing at a 3% level or more, so our economy is sputtering at best.
Other indicators show serious economic problems as well. The level of home ownership in our country is now at a fifty year low, only 62.9%. The rate has been plunging ever since Barack Obama became President. Since the financial crisis of 2008, credit is much tighter and housing prices are increasing much faster than incomes. Even low mortgage rates have not succeeded in turning around the downward trend in home ownership. Buying a home used to be a major part of achieving the American dream, but today it is an unattainable fantasy for millions of people struggling in this economy.
While the President touts an unemployment rate of only 4.9%, the real picture only emerges after looking at the labor force participation rate which is only 62.7%, near a forty year low. Currently, there are almost 95 million Americans who are not in the labor force. Approximately 50 million Americans are impoverished with almost 44 million receiving food stamps.
With such economic woes, will Americans want to stay the course and elect Hillary Clinton or vote for change and support Donald Trump? In 1992, voters embraced change and elected Bill Clinton as President. If they see the economy in decline today, they will also likely reject the incumbent party and vote for Trump. It remains to be seen which candidate will have the most compelling argument, which is why the next three months will be so interesting.