2012: The Media Canít Save Barack From the Obama Economy
by John Tamny
by John Tamny: What
Keith Richardsí 'Life' As a Rolling Stone Tells Us About Economics
With the Obama
economy limping along thanks in part to the Administrations
policies in favor of extreme dollar weakness, theres growing
speculation as to his re-election chances in 2012. Will a difficult
economic situation that includes high levels of unemployment make
Obama a one-term president? History says no given the power of incumbency.
Added to that,
another popular narrative of late points to an Obama victory owing
to the supposed economic illiteracy of the electorate, along with
a media that will provide our weakened president with positive media
coverage no matter the state of the economy. Of course the problem
with this bit of theorizing is that Americans arent stupid,
and after that, past elections suggest that those same Americans
tend to tune out the media.
two terms in office tell the tale here. As USA Today media
reporter Peter Johnson has put it, Over the course of his
campaigns and eight years in office, Ronald Reagans press
peaked and fell but was always negative.
In his re-election
bid in 1984, 91 percent of his coverage was negative.
The above is
important. Despite a rising economy and millions of new jobs, the
media invariably stuck to a number of gloomy themes during the Reagan
years, including the rising homeless population, twin deficits,
and a generalized assumption that the supposed economic gains of
the 1980s were only being enjoyed by the wealthy few. Amidst this
constant negativity, Reagan was returned to office in 1984 with
one of largest landslide victories in electoral history.
stocks confirmed what voters already knew that the economy
was doing very well. Despite a major recession brought on by Paul
Volcker and the Federal Reserves needless flirtation with
quantity money targets in the early 1980s, the Dow
Jones Industrial Average still returned 134 percent during Reagans
presidency. Markets and the Electoral College told the truth about
an economy and presidency that the media regularly tried to cast
in a negative light.
To put it simply,
voters arent dim and they know when the economy is performing
well. Conversely, when the economy is acting badly, voters are well
aware once again.
supporting the above, we must first journey back to Jimmy Carters
presidency. As William Greider put it in Secrets
of the Temple, Despite the aggravations of inflation,
President Carter had presided over one of the longest and most expansive
periods of economic growth in postwar history, four years of recovery
starting in 1976.
So while GDP,
the frequently faulty measure of economic health, was rising during
Carters presidency, neither the stock markets nor the electorate
were fooled. The recession during the Carter years was the falling
dollar, as evidenced by spikes in gold and oil. A falling dollar
is always recessionary for limited capital flowing into hard, commoditized
assets, and away from innovative ideas that fund our economic advancement.
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© 2011 Forbes