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Obama First Since FDR Re-Elected With 7.9% Joblessness

November 07, 2012

Obama First Since FDR Re-Elected With 7.9% Joblessness

President Barack Obama prepares to leave the stage after making an acceptance speech during an election night rally in Chicago, on Nov. 7, 2012. Photographer: Daniel Acker/Bloomberg

President Barack Obama, whose hope- and-change campaign promises yielded to grim economic realities in the White House, defied history to win re-election last night, as wary Americans seeing glimmers of a recovery handed him a second chance.

Obama was re-elected with the highest unemployment rate of any president returned to office since Franklin Roosevelt in 1936 and became only the second Democrat since Roosevelt to win another term. Bill Clinton was re-elected in 1996.

He prevailed over Republican nominee Mitt Romney narrowly in the popular vote, yet achieved an electoral sweep by carrying the hard-fought states of Colorado, Ohio and Virginia. In doing so, he kept intact the coalition of women, minority voters and young people that originally propelled him to office as the first black U.S. president.

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With Florida too close to call, Obama had captured 303 Electoral College votes, well beyond the 270 needed to win the White House, compared with 206 for Romney. Voting lasted so long in Miami-Dade County, Florida, that officials said they wouldn’t finish counting votes until today. Obama held a slim lead over Romney with 92 percent counted.

The election marked a rejection by voters of the Republican Party’s agenda of shrinking government and slashing taxes at a time of economic uncertainty. It was also an embrace of an incumbent who remained personally popular with voters even amid their dashed hopes about his first term.

‘Better President’

“Our economy is recovering, a decade of war is ending, a long campaign is now over,” Obama told cheering supporters in Chicago, striking a tone that echoed his 2004 Democratic convention speech that put him on the national stage.

“You’ve made me a better president, and with your stories and your struggles, I return to the White House more determined and more inspired than ever about the work there is to do,” he said.

While clear majorities of voters said they were most concerned about the economy and saw it stagnating or deteriorating rather than improving, exit polls showed they rated Obama as more in touch with people like them. They chose to stay the course rather than plunge into the unknown with Romney, the former Massachusetts governor, who had argued he could succeed where the president had failed to create jobs and tackle the federal debt.

Obama may have benefited from positive economic data just before the election.

Housing Starts

Housing starts climbed in September to the highest level in four years. With the latest gains, companies now have added 4.97 million workers to payrolls since the economy stopped hemorrhaging jobs in February 2010. Retail sales in August and September registered the biggest back-to-back gains in almost two years. The Standard & Poor’s 500 Stock Index is up 75 percent since Obama took office.

All that is in contrast to President Herbert Hoover, who lost his bid for re-election to Franklin Roosevelt in 1932 in the midst of the Great Depression. The October 1929 stock-market crash was followed by 9,700 banks suspending operations as of 1933, a contraction in U.S. economic output of close to one- third and unemployment that soared near 25 percent.

‘Another Direction’

“I so wish that I had been able to fulfill your hopes to lead the country in another direction, but the nation chose another leader,” Romney said in Boston, in a concession speech lasting less than five minutes. He said he would “earnestly pray” for the victor.

Even though he placed his campaign headquarters in the state he once governed, Romney lost Massachusetts by 23.4 points, the largest defeat in a candidate’s home state in more than 100 years. The previous worst showing was when Democrat James Cox of Ohio lost his state by almost 20 points in 1920.

Voters who cited joblessness and rising prices as their biggest concerns were more likely to blame Obama’s Republican predecessor George W. Bush than him for the nation’s economic woes.

Still, it is Obama who now must confront the fiscal challenges that confounded him during his first term, including the immediate task of dealing with the so-called “fiscal cliff” of tax increases and spending cuts that will start in January if Congress and the White House don’t act before then. Republicans were on track to maintain their majority in the U.S. House while Democrats were poised to hold the U.S. Senate, setting the stage for another round of partisan skirmishing.

Romney Meeting

Obama said he looked forward to sitting down with Romney to discuss “where we can work together to move this country forward,” and pledged to reach out to “leaders in both parties to meet the challenges we can only solve together.”

Romney offered few specifics during the campaign on how he would manage the fiscal challenges, as the former private-equity executive strove unsuccessfully to turn the race into a referendum on Obama’s leadership. The challenger also struggled to shed the caricature the president’s team painted of him in thousands of ads as a corporate raider who put profits over people.

That left room for Obama, who cast himself as a champion of middle-class opportunity, to argue that sticking with him was the better choice to move the nation forward -- the word he chose as his campaign slogan -- even as he, too, refrained from spelling out where he would go in a second term.

Consumer Confidence

The president was helped in the end by an uptick in public optimism as Americans began to feel the stirrings of a more robust economic revival, with consumer sentiment improving, net job creation over the last month, gas prices falling sharply in most areas of the U.S., and more Americans saying they saw better times ahead.

Obama’s victory came as unemployment hovered at 7.9 percent -- slightly higher than the 7.8 percent rate he faced when he took the oath of office on Jan. 20, 2009, yet lower than the 8 percent mark where it sat stubbornly for 43 months, menacing his re-election prospects. It was down 1 percentage point from a year earlier -- a bigger drop than any president has presided over since 1948, except Ronald Reagan.

Reagan is the only previous president to have been re- elected since World War II with a jobless rate above 6 percent. The rate was 7.4 in October 1984, down 1.4 percentage point from the previous year.

Stacked Deck

From the beginning of the campaign, the president had a deck stacked in his favor with the electoral map. With the nation’s minority population on the rise, including in such competitive states as Nevada, Virginia, Colorado, Ohio and Iowa -- all of which Obama carried in 2008 -- the president started out with more Electoral College votes safely in his party’s column than Romney did. That left the Republican with fewer paths to the 270 needed to win.

By Election Day, the Obama team claimed to have registered 1.8 million new voters in the battleground states -- almost double the number the campaign registered four years earlier. Republicans banked on discontent among Obama’s 2008 supporters and excitement in their own ranks for turning him out to change the face of the electorate. Yet Obama’s camp succeeded in drawing out a vote even more favorable to the Democrat than they did four years ago. Fewer whites and more black and Latino voters turned out than they did in 2008.

Hispanic Voters

According to exit polls, the electorate was 72 percent white -- a group Obama lost with 39 percent to Romney’s 59 percent -- and 13 percent African-American, a bloc that gave the president 93 percent of their votes. Obama won Hispanic voters - - who comprised 10 percent of the electorate -- 71 percent to 27 percent for Romney, a slightly worse outcome for the Republican than in 2008, when Obama carried Latinos 67 percent to Arizona Senator John McCain’s 31 percent.

Hispanic groups wasted no time in declaring that they had helped turn the election against Romney, whose support for “self-deportation” of illegal immigrants alienated the nation’s fastest-growing voting demographic, and claiming a mandate for a sweeping revamp of immigration laws.

“We expect President Obama to exert his considerable leadership to replace a system that has for too long shattered Latino and other immigrant families, and for Congress to come to the table,” Marielena Hincapié, executive director of the National Immigration Law Center, said in a statement last night. “Politicians on both sides of the aisle should recognize that if they adhere to these draconian positions, their political future is at risk. The demographic writing is on the wall.”

Gender Gap

A gender gap worked in Obama’s favor. He won 55 percent of women to Romney’s 44 percent, while Romney carried men 52 percent to the president’s 45 percent.

For all the challenges the economic meltdown that Obama inherited created for his re-election campaign, his stewardship of the automobile industry bailout provided an important advantage for him, particularly in Ohio, where one in eight jobs is auto-related.

Obama hammered Romney -- the son of an auto executive --for having opposed sending federal money to Chrysler and General Motors (GM:US) in 2009, at a time when economists and politicians in both parties acknowledge they wouldn’t have survived without it. Hoping to neutralize the issue in the closing days of the race, Romney’s campaign began airing television advertisements in Ohio accusing Obama of having “sold Chrysler to Italians who are going to build Jeeps in China,” a charge quickly branded “inaccurate” by the company’s chief executive and local newspaper editorial boards.

Auto Bailout

Voters made their own judgment: Exit polls showed that more than half of Ohio voters approved of the auto bailout -- and three-quarters of those backed Obama.

Obama got a late-breaking boost from another development outside his control. The superstorm spawned by Hurricane Sandy battered the Northeast and Mid-Atlantic a week before Election Day, affording the president a chance to play the high-profile role of crisis manager-in-chief just as many voters were making their final decisions.

As the storm froze the presidential race in place and forced both candidates off the campaign trail in deference to its victims, Obama was drawing positive reviews for his management of the devastation, including from New Jersey Republican Governor Chris Christie, a top Romney surrogate.

To contact the reporter on this story: Julie Hirschfeld Davis in Washington at jdavis159@bloomberg.net

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net


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