The US election may be 18 months away – it will be held on 6 November, 2012 – but the campaigning has already started. If it hadn’t kicked off beforehand, the first obvious pointer came when President Obama filed the relevant paperwork with the Federal Election Commission, on 4 April, allowing him to hit the fundraising trail.
The 2012 election is a focal point at the moment because Barack Obama is getting serious brownie points for being the man in charge when Osama Bin Laden was brought to justice.
Economy key
But the next year and a half will also provide us with confirmation or otherwise of what US citizens and global investors alike truly desire – a US recovery. Obama has undoubtedly not lost sight of the fact that it will be his economic plans and successes, or otherwise, that will largely dictate whether he gets a second term as well as dictating whose challenge may fare better than others.
Two candidates the focus may favour are Mitt Romney, who narrowly lost out in the Republican nomination in 2008, and Mitch Daniels, Governor of the state of Indiana and formerly a director of the US office of management and budget under George W Bush – though perhaps he should keep this latter credential under wraps for now.
They are certainly better placed than other potential Presidential candidates such as, for example, businessman and (hair)style icon Donald Trump, or former speaker of the House of Representatives, Newt Gingrich.
So if economics – with national security a strong second – is the issue with which to measure Obama, right now he stacks up pretty well. Part of this is purely down to timing as the US economic recovery is now two years old and Obama started his presidency just over two years ago, in January 2009.
The recovery may be painfully weak but it is still on an upward trajectory.
Positive moves
Banks are starting to ease the criteria for giving consumer loans; incomes are edging upward; the private sector is creating jobs, with the manufacturing sector contributing hugely; corporate results have been picking up steadily over the past few quarters with the latest figures showing a gain of 17% against a pre-season forecast of 11.8%; earnings expectations are expected to continue.
But 55% of Americans still disapprove of his handling of the economy and precedent suggests voters will ignore successful war leaders in the face of poor handling of the economy.
There are still a huge number of negatives – rising inflation on the back of rising commodity prices; a weak dollar (though to some sectors this is a distinct benefit); the continued strength of China and its dominance of the US import market; threats of credit downgrades from rating agencies; a housing market that is still in the doldrums.
The US economy will still be in the doldrums in November next year, as we will be in the UK, as others will be in Europe, but Obama is able to point to lots of graphs that point north from the time he arrived as President.
The bin Laden factor will only last as long as it is mentioned on the news and in the papers. The economy, on the other hand, will outlast Obama so with an election to win he may put policies in place to win votes sooner rather than later.
