2008 might not be the "Iraq election" after all, writes LIZ MAIR.
"It's the economy, stupid," was the Clinton campaign catchphrase that defined the 1992 presidential election. But, with less than a month to go until the Iowa caucuses, it could easily reemerge as the chief slogan for 2008 as well.
According to a recent Wall Street Journal/NBC News poll, 52 percent of Americans say their top two priorities in selecting a president are the economy and healthcare; terrorism and social/moral issues are the principal concerns for only 34 percent. According to the Journal, these figures suggest a complete reversal of public priorities since 2004.
Why are Americans suddenly refocused on the economy and related pocketbook issues such as healthcare costs? One possibility is the recent good news out of Iraq, which likely has diminished public concerns about U.S. involvement there. Another is the government's success in foiling terrorist plots: there have been no major attacks within the United States since 9/11. In an Economist/YouGov poll conducted last month, only 10 percent of Americans ranked terrorism as the issue that was most important to them, whereas 23 percent said the economy was most important.
Indeed, a sense of economic insecurity is sweeping the nation. According to a recent Los Angeles Times/Bloomberg poll, 56 percent of Americans think that the economy is doing "fairly badly" or "very badly." Meanwhile, an October Gallup survey indicated that just 39 percent of Americans consider themselves "better off" than they were a year ago. As of October, there were already 1.8 million mortgage foreclosures nationwide (compared to 1.3 million in all of 2006), according to RealtyTrac. Meanwhile, housing prices continue to tumble: Moody's Economy.com reports that they could fall more than 30 percent in cities and towns across the country before the crisis is over, which would take a real toll on economic growth. On top of all that, fuel prices remain high and healthcare costs continue to increase, putting consumers in a bind. Add it all up, and it's no wonder the economy and related issues have taken center stage.
That said, there appears to be a gap between economic reality and public perception. Unemployment and inflation remain relatively low, and the economy has experienced 24 consecutive quarters of growth. It’s clearly in better shape than most Americans believe, thanks in some measure to George Bush’s pro-growth policies.
But now Americans seem inclined to scrap an economic agenda—tax cuts and trade expansion—that has delivered positive results. A recent Wall Street Journal/NBC News poll showed that most Americans have become skeptical of free trade. According to an earlier poll, Democrats hold a double-digit lead as the party that would best handle the economy. Moreover, Gallup polling from September showed that 54 percent of Americans believe that Democrats will do a better job of keeping the country prosperous, compared to just 34 percent who said the same of Republicans.
The three Democratic presidential frontrunners—Hillary Clinton, Barack Obama, and John Edwards—are all, to one degree or another, in favor of increasing taxes, curbing free trade, and boosting federal spending. At least one prominent Republican presidential candidate, former Arkansas governor Mike Huckabee, has also indulged in protectionist rhetoric and has a history of raising taxes. Some polls show Huckabee leading the GOP field in Iowa; the former Baptist minister currently garners the support of about 14 percent of GOP voters nationwide, according to the latest RealClearPolitics average. Evidently, anti-trade posturing curries favor not just with Democrats and independents but also with a decent number of Republicans.
In such circumstances, pro-growth candidates clearly face an uphill battle. With the American public apparently convinced that the U.S. economy is sick—and that Bush’s policies have made things worse—it may be difficult to persuade swing voters that more tax cuts and free trade agreements are part of the answer. That is especially the case with Clinton, the frontrunner for the Democratic nomination (and the woman most polls say is set to become the next president), advocating federal intervention as a cure to the mortgage crisis and other top Democrats following suit.
Ultimately, any pro-growth candidate who hopes to succeed Bush in the White House will have to do more than simply promise to cut taxes. Many Americans currently do not associate pro-growth economic policies with economic health, nor do they reckon that further tax cuts should be a federal priority. Therefore, should the economy indeed emerge as the dominant issue of 2008, it will almost certainly help the Democratic nominee, whoever he or she may be.