Why Obama Is NOT Likely to Lose in 2012; A Response to Karl Rove

In Washington very few are as trusted as Karl Rove in predicting political futures and organising the political machine to see it through. Even George Bush acknowledged him as the "Architect" of his 2004 re-election victory. 

In his article (Why Obama Is Likely to Lose in 2012) in the Wall Street Journal Mr Rove highlighted four serious reasons why Obama will lose in 2012.  I will attempt to debunk these facts as wishful thinking and uniformed insight.

The first point highlighted by Rove is the high unemployment rate of 9.1% with 14 million Americans currently unemployed. It is true that figures don’t lie but sometimes they don’t paint the complete picture. 

When Obama took office in January 2009 the economy was haemorrhaging 800,000 jobs monthly, jobless claims was hovering around 1 million monthly, the stock market index was below the 7000 mark while retail sales were down. Today the picture is different with over 2 million private sector jobs added, the stock market is at a high of above 12000 and non-farm payrolls have consistently been positive for 15 straight months and jobless claims down to 400,000 monthly.   

The reasons for the consistently high unemployment which are dependent on facts beyond any president’s control include:

1.     The cost of crude oil has been consistently high (due to the Middle-East conflict)  and this along with other factors such as the Japanese Tsunami and reduced global industrial output has gradually resulted in a sustained increase of consumer price index which currently stands at a 12month high translating to reduces retail sales.

2.    The 900 billion dollar economic stimulus package (AKA TARP- Troubled Assets Relief Program) resulted in a boost to the economy by preventing cuts in jobs of middle class folks (teachers, fire fighters etc.). As these funds have run out State and Local governments have been steadily shedding jobs faster than the private sector can pick them up resulting in a net unemployment.

3.     Though business confidence is at an all-time high and US corporations are making record profits while sitting on substantial cash reserves, the rate of hiring has been quite poor. The companies after the economic decline have instead invested heavily in machinery which are at their cheapest level as they are now sourced oversees notably from China and they have the added advantage of writing off the expenditure as capital investment against business taxes.

4.    Finally unemployment is always the first to be hit and last to recover during an economic downturn. 

While the above factors may work against Obama’s re-election bid it’s my prediction and that of Federal Reserve chairman, Ben Bernanke, that the economic outlook for next year will be more positive as business confidence reaches new levels and the housing market bottoms with subsequent increase in hiring by the private sector with a decline in unemployment rate to about 8% or better by election day.

Mr Rove also pointed out that President Obama has a problem with his base; highlighting the fact that even Jewish voters were deserting him. This to me is pure speculation. But flipping the coin over (to the GOP side); Mitt Romney or his mirror image (Jon Huntsman) will win the GOP nomination. This will alienate the far right in the GOP, who have always felt that these candidates have flip-flopped on social issues such as abortion, strong national security stance, health care and are seen to be weak on their resolve to insensibly cut government spending.  

As the GOP nomination field currently stands, no single candidate has a strong personal persona or policy to gain the hearts of the independents that form the deciding voting bloc. As per Obama’s base I have a strong confidence that it’ll take the GOP candidate nomination to spur them into action.

The health care reform passed into law was highlighted by Mr Rove as an achilles heel for President Obama re-election bid. This is an incomplete truth. 

As provisions of the law start to kick in next year through 2014, it will offer more than 30 million people with access to health care while preventing discrimination of people from access to health insurance due to pre-existing conditions, providing Obama the biggest boost to his re-election bid. It has to be noted that the rising cost of health care which is being experienced as result of wider coverage will mostly affect a large population of the electorate who wouldn’t have voted for Obama in the first place.

An icing on the cake of health care debate is the Paul Ryan’s health care overhaul which has targeted the seniors by attempting to turn Medicare into a voucher program as a means of reducing cost. This is a gift to Obama’s election bid as the seniors have traditionally been known as the most reliable voting bloc.

The last point raised by Mr Rove that Obama should not be campaigning is simply BS and need not be justified. Obama is set to raise a record 1 billion dollars surpassing the 750 million dollars raised during his last campaign. This puts him far ahead of the pack of wolves that form the current GOP nomination field.

Obama is on a sure path to re-election in 2012 and I hope Mr Rove will clearly read the writing on the wall and not be blind-sided by wishful thinking.