As we head toward November's mid-term elections, the outlook remains dire for Democrats. For the trajectory of this campaign season to change in their favor, two things need to happen -- unemployment must drop significantly, and the public's attitude toward the new health care reform law must become much more positive. Neither seems likely, though.
Increasingly, it appears that for Democrats to turn things around, Republicans would have to snatch defeat from the jaws of victory, or a "black swan" -- an extraordinarily unexpected event that causes a tremendous change -- would have to swim to the rescue of the president's party.
In March, the U.S. economy created a net 162,000 jobs, yet unemployment held steady at 9.7 percent. This news underscores the economic challenge facing President Obama and his fellow Democrats this year. Plenty of encouraging economic statistics come out every week. Economists have no doubt that a recovery is under way. The simple fact is, however, that the economy must generate 100,000 new jobs every month just to keep up with population growth. Also, once-discouraged workers re-entering the job market will soak up a sizable number of the next 100,000 new jobs, so the country will effectively need to create 200,000 jobs every month to lower the unemployment rate.
These realities explain why unemployment has remained at 9.7 percent for three months and why virtually all economic forecasts say that it will hover in the 9.5-to-10 percent range through the end of the year. Private employers, particularly small-business owners, seem reluctant to hire permanent workers, further exacerbating the problem.
Last month, the number of Americans who have been out of work for 27 weeks or more rose to 6.5 million, a record. Finally, the broader "U-6" measure -- which tracks not only out-of-work job hunters but also the unemployed who have given up and part-time workers who would rather work full-time -- ticked up to 16.9 percent for March. Simply put, Democrats won't be getting much help on the jobs front.
On health care, polls conducted since Obama signed the reform law have been mixed. Responses to some questions indicate a slight improvement for Democrats; others don't. Certainly, there is no evidence that enactment of health care reform has thrown a lifeline to Democratic candidates.
That leaves the party's hopes hinging on either a "black swan" event (a term employed by Nassim Nicholas Taleb in his 2007 book, The Black Swan: The Impact of the Highly Improbable) or a Republican implosion. More than a few GOP veterans worry about the latter. They fret about an undercurrent among the party's rank and file that could lead to the nomination of extreme and/or inexperienced candidates who could spoil a potentially great year for the GOP.
One top-notch Republican strategist says that along with the anti-Democratic-incumbent feelings coursing through much of the electorate, a virulent anti-establishment sentiment among some GOP primary voters could take a real toll on mainstream candidates who would stand a good chance of winning a general election. This throw-the-bums-out dynamic seems most likely to hurt congressional Republicans who voted for the Troubled Asset Relief Program and are now confronting primary challengers.
Luckily for the GOP, a fairly small number of its incumbents face tough intraparty challenges. Nevertheless, the party has reason to fret about primary season. One race to watch is that of Sen. Robert Bennett, who might fail to get enough support in the Utah caucuses to simply make it onto the primary ballot. (Still, Democrats probably have little chance of benefiting from Bennett's ouster should it come to pass.)
The fact that Bennett, one of the most respected Capitol Hill Republicans, is under siege speaks volumes about the state of the GOP. In other Senate races -- notably those in Kentucky, Indiana, and, arguably, New Hampshire -- very electable Republicans are in close primary fights with candidates who would have a difficult time winning a general election. No doubt, a few similar situations exist on the House side.
So the Republican Party has its difficulties, but the national political environment remains good for the GOP. If anything holds down GOP gains, it's more likely to be Republican voters' in some races opting for weak nominees or a huge game-changing event that takes everyone by surprise rather than Democrats' figuring out how to turn their own situation around.
This article appears in the April 10, 2010 edition of National Journal Magazine.
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