Why Obama could still lose in November

Worsening jobs figures, Romney's ad blitz and low approval ratings are reasons for Obama not to be complacent.

A somewhat blithe consensus has built up around the view that Mitt Romney is destined to lose the US presidential election. Prediction markets Intrade and Iowa Electronic Markets have the incumbent on 70.3% and 72.4% respectively to win, whilst Nate Silver, a superstar election seer, has Obama a huge 76.1% favourite. But for all the President’s advantages, and they are admittedly formidable, a good deal of uncertainty remains going into the final six weeks of the campaign. Here are three reasons why the race is more unpredictable than most pundits appreciated.

1. The economy, stupid. Long before the Clinton campaign coined that famous maxim, politicos have known that the single most important factor in presidential elections is the state of the economy. Ronald Reagan’s question to the nation in 1980, "do you feel better off than you did four years ago?" was widely thought to have skewered the hapless incumbent Jimmy Carter. Romney is clearly looking for the same tactic to work in 2012. The irony of Carter’s predicament was that in fact about ten million jobs had been created during his presidency – his misfortune was that the recession began in his re-election year, creating the impression of failure at the worst possible time. Obama’s job creation numbers are far worse than Carter’s: the economy has (narrowly) lost jobs since his election and only 4m of the 9m jobs lost in the recession have been recovered. Moreover, no president since Roosevelt has been re-elected with unemployment at more than 7.2% (it is currently 8.1%). But, like Roosevelt, Obama inherited a horrendously underperforming economy and, as with Roosevelt, the economy appears to be improving as his re-election approaches.

The danger for Obama, however, lies in the precariousness of the jobs growth figures. Some point out that the unemployment rate has been flattered by discouraged workers dropping out of the labour market. And the weak jobs growth figures from September – along with the current level of the ISM - have set up a tense end-game for the Obama administration. With two more months of data to come, Obama could be hugely damaged should those figures turn negative in the run-up to polling day.

Chart 1: US unemployment

2. This is the year of the super-PAC The incumbent funding advantage in presidential elections usually works in two ways: firstly the incumbent simply raises more money in most years due to their greater familiarity with donors and the tendency of backers to prefer a proven winner over an insurgent challenger; secondly, they generally avoid the costly battle for their party’s nomination that drains the challenger of cash before the real contest has ever begun. Both these advantages hold this year too (Obama had raised $600m in total to Romney’s $335m by the end of July), but they should be greatly mitigated following 2010’s controversial Supreme Court ruling in Citizens United v. the FEC. This ruling essentially eliminates the restrictions that existed on individual and corporate donations to "political action committees"; as a result, deep-pocketed donors, of which the Republicans seem to have rather more than the Democrats, will be able to target unlimited ads at the key swing states in the final weeks of the campaign.

The impact of these super-PACs was huge during the Republican primary, with Mitt Romney’s Restore Our Future super-PAC vastly outspending his rivals and destroying big poll leads, like Newt Gingrich’s 20-point lead in Florida, with a deluge of negative ads. Of course, it won't be so easy for Romney to squash President Obama in this manner. For one, he has his own super-PAC, albeit one less well-funded. It also remains unclear whether the Republican super-PACs have raised anything like the kind of funds some were predicting (data going up to 31 July showed a relatively modest $140m between them). But their eventual impact is impossible to predict, which leaves open the possibility they could make a critical difference in the crucial swing states like Florida and Ohio come November.

3. Approval ratings still dangerously low. Obama’s approval ratings are nowhere near high enough at this stage to justify complacency. Most analysts expect the bump he enjoyed following the Democratic Convention to fade by the end of September, which should erode much of the lead that appears to have excited prediction markets. Chart 2 shows the difficulty Obama has had in maintaining his approval ratings at levels comparable to those of the last four Presidents to enjoy re-election in the US.

Chart 2: Presidential approval

My view is not that Romney is more likely to win the Presidency - I don’t think he will. Obama’s approval ratings may be relatively low but they are significantly higher than those of Presidents Carter and Bush at this point in their unsuccessful re-election campaigns. He is also leading to varying degrees in states worth 332 electoral college votes (270 are needed to win). However, once one adjusts the current polls for the convention bounces and allows for the not inconsiderable likelihood of more disappointing economic news between now and the election, Romney’s task is not quite the Herculean labour that many seem to think.

Richard Mylles is a political analyst at Absolute Strategy Research, an independent consultancy based in London.

Barack Obama meets with supporters at OMG Burgers on 20 September in Miami, Florida. Photograph: Getty Images.

Richard Mylles is a political analyst at Absolute Strategy Research, an independent consultancy based in London.

Photo: Getty
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Who will win the Copeland by-election?

Labour face a tricky task in holding onto the seat. 

What’s the Copeland by-election about? That’s the question that will decide who wins it.

The Conservatives want it to be about the nuclear industry, which is the seat’s biggest employer, and Jeremy Corbyn’s long history of opposition to nuclear power.

Labour want it to be about the difficulties of the NHS in Cumbria in general and the future of West Cumberland Hospital in particular.

Who’s winning? Neither party is confident of victory but both sides think it will be close. That Theresa May has visited is a sign of the confidence in Conservative headquarters that, win or lose, Labour will not increase its majority from the six-point lead it held over the Conservatives in May 2015. (It’s always more instructive to talk about vote share rather than raw numbers, in by-elections in particular.)

But her visit may have been counterproductive. Yes, she is the most popular politician in Britain according to all the polls, but in visiting she has added fuel to the fire of Labour’s message that the Conservatives are keeping an anxious eye on the outcome.

Labour strategists feared that “the oxygen” would come out of the campaign if May used her visit to offer a guarantee about West Cumberland Hospital. Instead, she refused to answer, merely hyping up the issue further.

The party is nervous that opposition to Corbyn is going to supress turnout among their voters, but on the Conservative side, there is considerable irritation that May’s visit has made their task harder, too.

Voters know the difference between a by-election and a general election and my hunch is that people will get they can have a free hit on the health question without risking the future of the nuclear factory. That Corbyn has U-Turned on nuclear power only helps.

I said last week that if I knew what the local paper would look like between now and then I would be able to call the outcome. Today the West Cumbria News & Star leads with Downing Street’s refusal to answer questions about West Cumberland Hospital. All the signs favour Labour. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.