I agree with Peter Lawler that the election is shaping up to be very close if one projects from present circumstances (with only modest changes up or down to unemployment and job creation numbers.) The most likely event that could crack open the election would be a crisis in Europe that sharply and unambiguously hit the US economy. Here some reasons (some very obvious) why such an event would hurt Obama’s reelection:
1. It would have happened in the second half of Obama’s fourth year as President. The public has been willing to split the blame for the current economic conditions between Obama and former President George W. Bush, and indeed the public has assigned a bigger share of the blame to Bush (though Obama gets some of the blame too.) Blaming Bush would be laughable in this case. Persuadable voters are also unlikely to be too sympathetic to Obama blaming the economy’s problems on another continent. If this sound unfair, remember that Obama had done nothing to deserve the political benefit he got from the financial crisis of 2008. At the very worst, Obama comes out of this even. Actually, at the very worst, the rest of us get to live through two banking crises in four years. This is by far the most important effect of such an event.
2. A Euro crisis that is sparked by Greece plays into conservative narratives about unsustainable, Big Government, Eurosocialism and cronyism of Obama who is trying to turn us into Europe. This narrative would have real power. Now someone could rightly mention that Sweden, even after its recent spending cuts and market reforms, spends a larger percent of its GDP on government that does the US. That is true enough, but it won’t be decisive. Think about it. Was the optimal response to the Lehman Brothers collapse to elect a freshman Senator with little private sector and zero executive experience on a platform of Obamacare and green energy subsidies and then have financial regulation reform outsourced to Chris Dodd and Barney Frank? No, but it didn’t matter. The circumstances of the 2008 crisis reinforced certain left-of-center narratives. A big hit on the US from a Euro collapse will reinforce certain right-of-center narratives.
3. Mitt Romney will be good at talking about this stuff. It is very unlikely that Romney will come across as completely clueless and grotesquely cynical as McCain did when he “suspended” his campaign so he could pretend to rescue America’s financial system.
Or maybe, if Obama is lucky (and the rest of us too), we avoid a big hit altogether. That’s what I’m hoping for.