The View From Here . . .

By Bob Morgan, Jr.

Someone asked me a few days ago whether I thought President Obama was likely to be reelected in 2012. November 2012 is a long, long, time away, but I thought it might be interesting to read the tea leaves as they appear now.

I suppose that as a pure betting proposition, Mr. Obama is more likely than not to be reelected. Since 1900, twelve incumbent presidents (McKinley, T. Roosevelt, Wilson, Coolidge, F. Roosevelt, Truman, Eisenhower, Johnson, Nixon, Reagan, Clinton and Bush II) were elected or reelected, while five (Taft, Hoover, Ford, Carter, Bush I) were not elected or reelected. The Intrade betting exchange, an Irish company that provides "futures" markets for various political propositions, lists a market price of 65 cents for a contract on a Democratic victory in 2012. If the Democrat wins, the contract pays off at $1.00. This means that the bettors think that the Democrats (pretty much equivalent to Obama) have about a 2/3 chance.

Nevertheless, there are numerous wild cards that make prognostications of 2012 particularly difficult. Most likely, the business cycle will have run its course and the recession ended by 2012, but that's not sure, nor is it impossible that there will be a double-dip recession. By 2012, Mr. Obama will have trouble pinning a continuing slowdown on George W. Bush. Another possibility is inflation on a scale that we haven't seen in 30 years, largely caused by deficit spending. That's a problem that would be even harder to blame Mr. Bush for, and one that in significant part sunk Jimmy Carter in 1980.

Another imponderable is foreign affairs. An attack on the United States (God forbid) would have significant political ramifications, which could be good or bad for Mr. Obama. Iran obviously remains a major problem nation, as to a lesser degree is North Korea. Iraq appears to be going in the right direction, but a relapse would again be very problematic for Mr. Obama. If there are missteps, it will not be very hard for Republicans to convince people that Mr. Obama is a weak leader and endangering national security.

Then there is the media. So far, Mr. Obama has enjoyed very favorable coverage, but it isn't an impregnable shield. A few members of the mainstream media are more skeptical than others (Jake Tapper of ABC News for example), there is a counter-media (Fox News, New York Post, etc.) and most important, there can be facts on the ground that are hard to spin. The media can't make the Dow go above 8000, for example, and if the financial markets stay weak for years, it will be hard to paper over this continuing lack of confidence in the administration by investors. Similarly, Mr. Obama's gigantic deficits will be a real political problem if they produces significant inflation.

Finally, although Mr. Obama is favored in 2012, his power may be well be checked by the 2010 elections, just as Bill Clinton's was after 1994. An anti-Obama wave in the midterms is distinctly possible, which will rein in Mr. Obama's present and future initiatives. Even if the Republicans don't take over either chamber (GOP control of the House is a possibility), there may well be a working majority of conservatives in one or both houses, which will force Mr. Obama to negotiate and will get his more sweeping proposals defeated or sharply curtailed.

In short, Mr. Obama seems at this far off time like a decent bet for reelection, but there is much that can, and probably will, happen in the next three and a half years.