Obama’s Base and Politics of Disappointment


There may be no better illustration of President Barack Obama’s appeal than his ability to hold onto voters — minorities, single moms and young people — who have fared the worst under his presidency. But the bigger question as we approach Election Day may be whether these constituencies, having been mauled by the economy, show up in sufficient numbers to save the presidential bacon.

Welcome to the politics of disappointment. Much has been said about the problems facing the middle class, who have been losing out since the 1970s. But the biggest recent losers have been groups like African-Americans. In the current economic downturn, middle class African-Americans have lost virtually all the gains they made over the past 30 years, according to the National Urban League. Median annual household income for blacks decline by more than 11 percent between June 2009 and June 2012, according to the Census bureau, twice the loss suffered by whites.

African-Americans as well as Latinos have also borne much of the pain from the housing downturn. In fact, according to the Census, Latinos suffered the biggest loss of net worth, largely based by housing, in the recession of any ethnic group. The weakness in the housing market, which is now only beginning to recover, hurts many Latinos, who represent a large part of the nation’s construction industry workforce.

Latinos have been doing so poorly under Obama’s tepid recovery that, by some estimates, more are headed back to Mexico than coming here. Many voters who might make a difference in November could be lounging in Michoacán or Oaxaca rather than Michigan or Ohio.

As for the young, even those with college education, they still suffer high unemployment rates and constricted job opportunities. More than 15 percent of all workers between 18 and 24 are unemployed.

A college degree does not assure success.  More than 43 percent of recent graduates now working are doingso at jobs that don’t really require a college education according to a recent report by the Heldrich Center for Workforce Development. Not surprisingly, the stress levels among college freshman are the highest since data started to be collected, a quarter-century ago.

Ironically the one group that has thrived under Obama — the affluent, including the dreaded “1 percent” — is also the class that has mobilized most aggressively against him. In 2008 Obama split the vote among those making more than $100,000 a year; this year. According to Gallup, the wealthier have shifted heavily to GOP presidential nominee Mitt Romney, with those making over $180,000 favoring him by slightly more than 9 percent.

Arguably the biggest change has taken place among those at the highest elevations. These include many of the executives of largest banks, who accepted federal bailouts and then helped themselves to huge bonuses in the ensuing years, largely due to the market impact of the Bernanke Monetary spigot. For example, both JP Morgan and Wells Fargo this month announced record profits.

The top 1 percent of earners gained more than 90 percent of the benefits from the TARP-powered 2009-2010 recovery while the top 0.01 per cent by themselves garnered more than one-third.   They all but avoided serious investigations for their misdeeds; in fact, no major Wall Streeter has yet to go to jail for sending the world economy into disarray.

Yet the very institutions like Goldman Sachs, who tilted heavily toward Obama in 2008, now favor Romney. Wall Street has sent Romney $37 million this year, and only $4.8 million to the president. For his big business money, the President relies instead on Silicon Valley and Hollywood.

In contrast, the president continues to dominate his less affluent 2008 core constituencies. But it’s increasingly likely that the poor economy — particularly for these same groups — could depress turnout.  In 2008,   the record turnout of minorities, single women and young voters propelled the Obama near landslide. A weaker showing this year could make the election far close, as we are seeing in polls today, and could even allow Romney — the candidate of predominately white, married, middle class voters — to overcome his party’s chronic demographic shortcomings.

Let’s start with Obama’s most loyal base, African-Americans. Though certain to turn out overwhelmingly for the president, Gallup reports that the number “likely” to vote has decreased somewhat from 2008. A recent Urban League report  suggested that a diminished African-American turnout could cost the president in such key swing states as Pennsylvania, Florida and even Ohio. A recent poll by Politico and George Washington University found that while 82 percent of whites are “extremely likely” to vote only 71 percent of African-Americans, and 70 percent of Latinos, expressed the same intention.

Ominously, registration levels in many key African American areas such as Chicago  have dropped precipitously, by more than 12 percent compared to increases in some of the heavily white outer suburbs. Although Obama will still win his home state in November, prospects for Democratic house pick-ups have dimmed.

More critical still has been a massive reduction in voter registrations    in heavily black and Democratic Cuyahoga County, Ohio (Cleveland). Recent attempts in many states to monitor voting could further reduce minority turnout.

Latino voters are particularly affected by this move to monitor voting, since many may lack the right paperwork. But even so, there is a real enthusiasm gap, demonstrated by the unexpected decline in registrations among Latinos. Twelve million Hispanics were registered in 2008 and the number was expected to rise to 14 million by this election. Instead the total, as of the last election in 2010, was only 11 million, something that some experts link to Mexicans moving or returning home due to poor economic conditions.

Arguably decisive in the swing states of Florida, Colorado and Nevada, mobilizing Latinos may pose the greatest challenge for the Obama campaign. In 2008, they voted two to one for Obama, and they seem likely to repeat that feat again this year.

Even worse for the President, Latinos, like the other core constituencies, don’t appear to be as enthusiastic this year. With Latino unemployment well above the national average, support for the president has waned a bit from 2008 levels. If turnout also decline, this could prove decisive.

This lack of enthusiasm appears among younger voters as well. Though Romney is winning white voters under age 30, particularly men, he is being hammered among both female and minority millennials. But the real issue may prove to be turnout. Growing alienation seems to have depressed enthusiasm among the young, with barely half of all under 30 pro-Obama voters now planning to turn out to the polls. If this persists, the youth vote will be less important this year from the record turnout that cemented the 2008 victory.

As he loses ground among middle class whites and families, Obama will need for his core constituencies to show up. This where his “ground game” will be critical. If the key groups come out to the polls, forgetting or at least forgiving what has happened over the past four years, they can renew their faith in the gospel of hope and change for the next four.

Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University, and contributing editor to the City Journal in New York. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

This piece originally appeared at Reuters.com

Barack Obama photo by BigStockPhoto.com.

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The politics of disappointment have been going on for some time now, since the early 1970's by my reckoning. They are driven by automation, trade, and immigration policies whose combined effect is to increase the supply and reduce the demand for labor, even as they promote the growth of the economy as a whole. In other words they bring about a redistribution of income from labor to capital. There is only one way to combat this problem, assuming one does not choose to oppose automation or restrict trade, and that is to subsidize wages with a tax on those who derive most of their income from capital.

There is only one fair and efficient way to do this in the literature of economics: through a vast expansion of the earned-income tax credit financed by a progressive tax on consumption in the form of a graduated expenditure tax. I will not try to prove this. A number of great economists have done so in the past. See, for instance, Nicholas Kaldor's little book on The Expenditure Tax and Milton Friedman's writings on the negative income tax.

So far neither party has been willing to address this problem honestly and forthrightly. The best explanation is that the donor class -- roughly the ten thousand or so wealthiest families in America, who finance both parties and set the political agenda -- do not want to go there. They do not want to give up their status symbols (private jets, multiple mansions, servants, etc.). But it ever we do go there, there is no reason why we could divide up the economic pie in the same proportions as we did in the 1950's, when times were good. And we could do this without destroying the link between effort and reward or the incentives to save and invest (savings are tax exempt under a graduated income tax and all forms of income (interest, capital gains, wages and salaries, etc) are treated the same. The rich could get richer and so would the working poor and everybody in between. The only difference is those dad gum status symbols which are anti-democratic.

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Obama's base of dissapointment

Choosing to compare only the last four years rather than the last 40 years distorts the economic picture completely. Lower income people were much better off relatively to average through the 1970’s until the borrow and spend policies of the Republican in the 1980’s and 2000’s. Remember we had a balanced budget in 2000 that the Reupblicans borrowed and spent away.
In the same period with huge productivity increases due to computerization the wealthy have increased their share of wealth from around 12% of the economy to over 20%. It makes no sense for the lower or middle income voter would to imagine that returning to the keep taxes low for the wealthy borrow and spend Republican party. As the former governor of Michigan said, it makes no sense to give a tax break to someone so they can increase their investment in China.

If the Republican control the government they will aggressively cut spending for lower income Americans, cut taxes even further while running up the deficit even more, many of the irresponsibly signed statements that they will not raise taxes when they should be signing statements committed to balancing the budget.

Obama may not have done a particularly good job on the economy but it seems extremely unlikely that a Republican government will actually be of greater benefit to the middle or lower classes, while continuing the same failed policies from 2001-2008.
Therefore it is not surprising that with such a dismal economy Obama is doing as well as he is.

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