Obama's Race for Re-Election Isn't Against Republicans, It's Against Unemployment

Obama's real race for re-election isn't totally against Republican candidates, no matter how much hair they have, how many times they say "You betcha," or how much tea they consume. The 400 pound gorilla in the race is the unemployment rate-as the rate goes up, the president's chances for re-election go down.

Another big factor is how many of the unemployed will vote at all in 2012. They may be so down that they won't make it to the polls, which, to speak with the inhumane calculation of a political surgeon, would be good for the President, though I'm sure Obama tries not to discuss such nasty stuff with his advisers. And the voting rate of discouraged job-seekers is probably not easily predictable.

In July, 2010, the U.S. Federal Reserve printed the following estimate:
"The unemployment rate is projected to average 8.3 to 8.7 percent in 2011, up from 8.1 to 8.5 percent in the April estimate. The Fed is also less optimistic about the unemployment data in 2012, lifting the estimate to 7.1 to 7.5 percent from 6.6 to 7.5 percent."

In its report for August, 2010, the Federal reserve said:
"Likely reflecting the relatively weaker near-term growth profile, the Committee shaded up its already dour unemployment rate projections through 2012. Th e unemployment rate projections for 2012 now range from 6.8 percent to 7.9 percent, well above the Committee’s longer-run 'sustainable rate' projections."

Some projections from other sources see the unemployment rate for 2012 as around 8%.

Even with unemployment numbers around 7% or 8% it is possible that Obama can be re-elected. Inflation will probably hold steady at a low rate. Housing values may well edge up slowly.

And other factors, of course will weigh in. Such as whether people have begun to have positive experiences with health care reforms, credit card reforms, etc.

It's definitely "the economy, stupid," but there are fine points to the effects of the economy on the election.

Read more at:  Economic Projections from the June FOMC Meeting
And at: Fed cuts growth forecast for 2010, lifts unemployment estimate