I had a prediction before. Unemployment rate 7.5% or lower Obama re-elected, 8.0% or higher, Obama losses re-election, between 7.5%-8.0% a tight race.
We now have a tight race and I predict Obama will win.
True, Obama probably lost an opportunity to gain a huge landslide and totally crush Romney and GOP. But he still has a good chance to win.
Fundamentally, this is because US democracy is really about how voters feel about the status of the country as a whole and the direction it goes. The unemployment rate is a huge part of this "feeling".
Despite the claim that 47% don't want to pay tax and poor people are lazy and do not want to work, only a tiny portion of the population willingly lives in poverty and relies on government's support. If they are given a chance of paying higher tax with higher paid jobs vs paying no tax and staying in poverty, anybody with any sense of human dignity would choose the former.
That's why unemployment rate is a crucial factor and that's why all candidates emphasize that they want to create jobs. Incidentally, while GOP claims that government is the problem, the GOP candidates always claim their administration creates jobs, as if, somehow, the government magically becomes an angel in their hands. It defies logic and painful reality, to say the least (Historically, GOP presidents created a lot fewer jobs than Dem presidents).
That's why GOPs were furious when the recent unemployment rate dropped below 8.0%. They have a good reason because the data lends credibility to Obama's policy.
Recession does recover, eventually. But not all recessions recovered in short time. A recession can also develop into a depression. By early 2009, Dow dropped from its peak 14,164.53 to 6,547.05, slightly more than 50% drop. This level of drop only occured once before. That was in 1933 and a great depression followed and the unemployment rate reached 23.6%. Since then, the highest unemployment level was 9.7% in 1982 in Reagan's first term. Obviously, US voters did not attribute the high level of unemployment to Reagan.
If you care to compare, the great recession of 2008 had all the characteristics of the pre-depression era which was marked by massive bank runs. This time, there was no massive bank run because of the FDIC, TARP and Fed. However, had Obama followed GOP's and Romney's advice to stay passive, the effect of FDIC, TARP and Fed would be seriously challenged. No one should forget how scary the time was when FDIC reported that it would run out of money if the situation continues to deteriorate! That was the first time in the entire history of FDIC! Had that happened, US would be ensured to go to depression because bank runs would follow. Then, nobody could save US, not even God because US economy is way too huge for anybody to even thinking about helping.
One key action was actually the auto-bailout which saved 1 million jobs directly. Had Obama followed Romney's advice to let the auto industry die, 5.3 million jobs would have been lost, instead of 4.3 millions. That would drive the unemployment rate up substantially, quite likely above 12-15% (counting the job losses in other sectors) and would take much much longer time to recover. In retrospect, the only reason that Romney suggested not to bailout the auto industry is that he wanted Obama to fail and wanted US to get into real depression.
It is true that historically nobody won re-election with unemployment about 7.4% on the election day. But before Reagan, nobody was re-elected with unemployment rate above 7.0% (except the great depression). Voters do put the historical facts into perspective. The trend is an important factor, in addition to the value itself.
For those who really believe Romney would win, you can try your luck on intrade. You may win really big.
選擇“Disable on www.wenxuecity.com”
選擇“don't run on pages on this domain”
