LA Biz Observed: That darn economy

That darn economy

Mark Lacter • Bio • Email

I realize that John McCain is busy getting ready for tonight's acceptance speech, but he might want to flip over to CNBC. The stock market is down more than 300 points because, well, the economy stinks and is likely to stay that way through at least the first part of 2009. That presents a problem for the Republican nominee because he is notoriously challenged when it comes to economic matters (he just doesn't like the numbers stuff). And considering that Sarah Palin's experience as a businesswoman is limited to her 20 percent stake in an Anchorage car wash (which, by the way, didn't pay the requisite fees or fill out the necessary forms), he might not get much help from the VP side of the ticket. Anyway, CNBC's Albert Bozzo wonders whether the economy might prove to be debilitating:

Though a good part of such election handicapping depends on partisan analysis and opinion, economic data and history offer some insights. A study of presidential elections between 1896 and 2004 shows three keys to victory for the incumbent party—good economic growth, fiscal restraint and a candidate seeking re-election. “None of these apply to McCain,” says [William A. Niskanen, a McCain supporter, who is chairman of the Cato Institute and headed President Reagan’s Council of Economic Advisers]. Arguably, none of those qualifiers applied to George H.W. Bush in 1992. All three clearly did in 1996, when Bill Clinton easily won re-election. In 2004, a case could be made either way.

[CUT]

The GOP may be most vulnerable on the jobs front. Nonfarm payrolls are up about 5.1 million between the inauguration of Pres. Bush and July 2008, vs. million during the Clinton presidency and 16 million in the Reagan era. In addition, the unemployment rate has been climbing, touching 5.7 percent in July, a four-year high; economists expect the jobless rate to easily surpass 6 percent in the year ahead. Labor market conditions are particularly powerful in influencing voters’ perceptions about the economy and though a lagging economic indicator they can still prove deadly for a candidate. Such was the case with the failed re-election of Pres. George H.W. Bush.

Oh, I forgot. Palin's was involved in a failed startup - a marketing business which was to go by the name Rouge Cou (a literal French translation of "red neck").

12:44 PM Thursday, September 4 2008 • Link
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