What will matter most in the forthcoming presidential election are the objective conditions, and most especially the objective economic conditions, of the nation. That’s why this story in the Wall Street Journal must be so disconcerting to President Obama. It reports that home values posted the largest decline in the first quarter since late 2008, “prompting many economists to push back their estimates of when the housing market will hit a bottom.”
Stan Humphries, Zillow’s chief economist, said that while most economists expected sales to decline after tax credits expired, the drag on the market has been greater than many anticipated. “We expected December and January to be bad,” Humphries said, but monthly declines for February and March were “really staggering.” Humphries now believes prices won’t hit bottom before next year and expects they will fall by another 7-9 percent. Others agree. Paul Dales, a senior U.S. economist with Capital Economics, says prices could fall by as much as 10 percent, down from his previous forecasts of around 5 percent.
We are now in the fifth month of Barack Obama’s third year in office. Unemployment is at 9.0 percent. We’re about 7 million jobs short of where things stood when Obama took office. Economic growth in the first quarter was 1.8 percent. Housing prices have fallen for 57 consecutive months. Only one in three Americans approve of the way Obama is handling the economy, the lowest point since he took office, and nearly eight in 10 American are less optimistic about the economy than they were a few months ago.
David Axelrod is anxious, and he’s right to be. His friend, the president, is caught in a political tractor beam from which few, if any, public officials escape. The only way to likely to overcome it is if the economy shows signs of a strong recovery. That has yet to happen, and one cannot help but think it may never happen, in the Obama presidency. If that ends up being the case—if a year from now the economy is more or less in the same condition as it was two years ago, last year, and what it is now—Obama will be the easiest incumbent to beat since 1980. It’s not impossible for Republicans to lose such an election, but it would be mighty hard.