Elections: Everything Affects Everything

by Michael Sean Winters

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It is commonly, and correctly, understood that this year’s election will hinge on the state of the economy. But, economic performance is measured in different ways, and a myriad of different events, not all of them stateside, can affect that performance.

Yesterday, for instance, the Obama administration got some good news and delivered even better news. The good news it received was that manufacturing activity increased last month at the highest rate in 10 months, rising to 54.8, up from 53.4 in March. The activity pertained to all sectors of manufacturing activity: new orders, production, and hiring. The news sent investors into the stock market with renewed vigor and the Dow reached its highest close since late 2007. Obama desperately needs more and more stories that indicate the economy is moving in the right direction if he is to sustain the narrative that he has been digging the nation out of a recession largely caused by the Bush-like policies Gov. Romney supports.

The better news the administration delivered was an order from the Labor Department that Wal-Mart pay $4.8 million in wages it denied workers in overtime pay. For years, Wal-Mart improperly classified certain workers, mostly those who worked in the vision-care centers, so as to avoid paying overtime. The Department of Labor investigated the situation and ordered Wal-Mart to pay. It is inconceivable that a Department of Labor in a GOP-led administration would take such action. Obama desperately needs more and more stories like this, that show the government standing up for the little guy, the average wage-earner, in the face of “profits-above-all” corporations like Wal-Mart.

But, perhaps the biggest news about the economic future came not from the heartland, and not from the Department of Labor, and it was not, on the face of it, about economics. In France, Marine Le Pen, leader of the far-right National Front party her father started, announced that she would be casting a blank ballot in Sunday’s run-off presidential elections. Analysts predict that incumbent President Nicolas Sarkozy will fail in his re-election bid unless he garners 80% of the National Front’s voters. Le Pen’s announcement makes it that much more likely Socialist candidate Francois Hollande will be moving into the Elysee Palace.

Hollande is no radical, except, perhaps, by Fox News standards. In fact, his election will likely help Europe step away from the radical, and stupid, path it has been on in dealing with the sovereign debt crisis facing many nations within the Eurozone, most especially Greece, Spain, Portugal and Italy. Sarkozy has stood with German Chancellor Angela Merkel (and, viewed against the long arc of history, it is a good thing to see France and Germany standing together!) in supporting austerity programs to deal with the debt crisis. The problem, of course, is that austerity programs never work, a point definitively and exhaustively demonstrated by Ken Rogoff and Carmen Reinhardt in the classic “This Time Is Different: Eight Centuries of Financial Folly.”

The good news, then, is that insofar as Europe has been on an austerity dead-end, and Hollande is likely to help move it back towards a saner economic approach, the long-term prospects for economic recovery in the Eurozone improve. The bad news for Obama is that, in the short-term, these kinds of political changes leading to economic changes will create uncertainty in the markets and, after the roller-coaster rides of the past dozen years, nothing is more likely to scare investors, and corporations, than uncertainty.

Yesterday’s surprise visit to Afghanistan on the anniversary of Osama bin Laden’s death also illustrated the diverse ways foreign issues faraway can have an impact on our elections and politics. Obviously, Obama was demonstrating the power of incumbency: Gas up Air Force One, wake up the troops, deck the hall with flags, and you have a great photo-op: The confident commander-in-chief of the armed forces shaking hands with the flower of America’s youth, in a dangerous place, explaining to a captive audience, both in the room and on television sets across the nation, how and why we are going to proceed in our dealings with an intractable world. As a photo-op, and a news story, it sure beats handing out pizza with Rudy Giuliani in lower Manhattan! People do not only vote on policies, they vote for the person, and most people have no chance to meet the candidates in person, so they must go on what they see. Hence the importance of stagecraft in statecraft.

While the photos help bolster his image as a decisive leader, it is doubtful that anything the president announced yesterday will have a profound effect on the election. But, should he win, the decision to begin negotiations with the Taliban raises some interesting policy challenges in the years ahead. It will be harder to charge House Republicans with conducting a “war on women” when you are busy trying to strike a deal with people who really have declared war on women! It also remains to be seen whether or not the counter-terrorism strategy, long advocated by Vice President Joe Biden and now adopted by the president, will work. The counter-insurgency strategy we have been conducting has not failed, but it has not exactly worked either, and it is far more costly than a counter-terrorist strategy. We shall see how that pans out.

Everything affects everything else in politics. The rise in manufacturing and the Dept. of Labor decision against Wal-Mart all bolster the president’s argument for a second term. But, the decision by a right-wing Frenchwoman to announce she would be casting a blank ballot on Sunday, while it may be good for France, good for Europe, and good for the world, may be bad for Obama in the short-term and might be more consequential than an uptick in manufacturing activity. Obama does not only need sustainable growth in the economy, he needs evidence of it before November. Otherwise, all the good photo-ops getting of Air Force One won’t amount to a hill of beans.

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