No president running for re-election in rocky economic times can escape the monthly jobs report, and Friday's numbers brought disappointing news -- the jobs picture has slowly improved in recent months, but will it be enough for President Obama to be able to declare "it's morning in America again?"
Even though there are no exact parallels in electoral history, Ronald Reagan in the spring of 1984 was -- and Obama right now is – a first-term president leading a country slowly and painfully creeping its way out of a severe recession.
By some measures the recession of 2007-2009 and its long aftermath are worse than what Reagan had to contend with, partly because the recent recession was accompanied a crisis in global financial markets.
Our view today of Reagan’s re-election triumph in November of 1984 is colored by everything we know now that he and his critics didn’t know in the early summer of 1984.
Despite an unsteady performance in his first debate with his Democratic opponent Walter Mondale, Reagan eventually prevailed in a landslide, winning nearly 60 percent of the popular vote and carrying every state but Mondale’s home state of Minnesota.
By the beginning of 1984, Reagan had endured several politically damaging missteps such as his proposal to cut Social Security early retirement benefits by more than 30 percent and to delay cost-of-living increases for retirees. “Despicable,” growled Democratic House Speaker Tip O’Neill. “A rotten thing to do.”
The unemployment rate which had peaked in November and December of 1982, fell sharply throughout 1983 and the first few months of 1984 before flattening a bit. By the time voters went to the polls in November, the last pre-election report from the Bureau of Labor Statistics showed 7.4 percent unemployment -- the highest number a president has ever been re-elected with.
Remarkably, from April of 1983 to April of 1984 the economy was generating an average net increase of more than 360,000 jobs every month. Compare that job growth to the less robust current numbers: from April of 2011 to April 2012, there’s been an average net increase of 159,000 jobs every month.
Although during Obama’s presidency the unemployment rate has never hit the 10.8 percent level it reached in the 1982 recession, it reached 10 percent in October 2009 and has fallen slowly to 8.1 percent—compared to 7.7 percent in April of 1984.
What’s especially striking when one compares the Reagan era to what’s happening today is the contrast in long-term unemployment. The number of long-term unemployed, those jobless for 27 weeks or longer, peaked in June of 1983 at nearly 2.9 million; the number of long-term unemployed hit 6.7 million early in 2010 and still stands at more than 5 million, according to Friday’s report from the Bureau of Labor Statistics.
The average number of weeks of unemployment peaked at 21 weeks in mid-1983 while the average weeks of unemployment soared to more than 40 weeks last year and remains at 39 weeks.
And the long-term unemployed are a far higher percentage of jobless people than was the case in Reagan’s first term as president. In the spring of 1984, the long-term unemployed accounted for about one in every five jobless people; but according to Friday’s BLS report, 41.3 percent of the jobless last month were long-term unemployed. (Some of this longer-lasting unemployment is due to the extension of unemployment insurance benefits.)
In the media commentary of the spring of 1984, there was a consensus that the economy had improved enough for Reagan have a good chance of winning a second term – although the economy was far from the only issue that Democrats were trying to use against Reagan.
Mondale was talking on the campaign trail that spring about the CIA’s mining of Nicaraguan harbors and Reagan's “utterly irresponsible” policies in Central America. Soon he warned, “America could be involved in full-scale war in Central America.”
New York Times economics columnist Lenard Silk wrote in mid-April 1984 that “While the economic recovery increases the odds of President Reagan's re-election, relatively high unemployment persists in different parts of the country and could hurt him in some key states.”
Silk suggested that perhaps Democrats would shift the campaign focus to a different economic issue: “Despite the overall rise in the economy and in the average level of real disposable income, the ‘fairness’ issue, or unequal distribution of gains and losses from the Reagan programs, is one that the Democrats may be able to exploit, and to which Mr. Reagan seems extremely sensitive.”
He speculated that, “The 1984 election could be more of a ‘class’ conflict than the 1980 election was, and this could work to Mr. Reagan's disadvantage.”
Even though he’s the incumbent and not the challenger, as Mondale was in 1984, Obama has for months made a “fairness” argument to voters, saying that upper-income people ought to pay higher taxes.
As for the jobs data, Obama’s chief economic advisor Alan Krueger gave CNBC a guarded assessment Friday morning: “Given the problems that the U.S. economy has had over the past decade -- problems that have been building for quite some time – we need faster job growth. We have a very large jobs deficit…. We need more job growth in this country and the president is trying to do the things to hasten job growth.”
He argued that if Congress had passed some of Obama’s proposals such as sending more federal money to cities and local governments to hire and retain public school teachers and firefighters, “then I’d think we’d be having better growth.”
But he said “the economy is continuing to heal and confidence remains strong.”
The Obama campaign has yet to offer its version of the soothing, feel-good ad the Reagan campaign began airing in May of 1984: “It’s morning again in America.”
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