The Election is Still a Long Way Off
February 21, 2012
The current spike in gasoline prices and the flap over the Obama administration's proposed requirement that religiously affiliated institutions provide their employees health insurance covering contraception are useful reminders that economics and politics are both dynamic, not static. It's always risky to project that the status quo will hold, particularly when an election is more than eight months away.
There's no question that the economic numbers over the past five months have been significantly better than they were in the first nine months of 2011. They've risen from a level at which any president would have a difficult time getting reelected to one that suggests this might be a competitive race that could go either way. But those numbers are in the abstract. The 30-cent surge in gasoline prices in recent months is largely attributable to political instability in Iran and elsewhere in the Middle East, and it is something that average voters can see, feel, touch, and hate. Don't be surprised to see anger start bubbling up anytime now.
It's anyone's guess where the economy, unemployment, and gas prices will be this summer. We should be mindful of the fluidity of economic news, good or bad. Things (other than gasoline prices) look better now than they did four months ago, but what will they look like four or eight months from now? Will Europe fall into a recession? Will there be a collapse of major financial institutions in the eurozone? These are very big questions that cannot be answered now.