In the first Presidential debate on October 3, Mitt Romney could well step into a political quicksand lurking just beneath the surface of his political taunt, “Are you better off now than you were four years ago?” If voters compare 10/3/12 with 10/3/08, Romney is sunk because the comparison is so revealing.
America’s economic house is hardly in order, but trend lines are promising: housing starts and new home sales at their highest levels in two years (and projected to climb 20% more by January, 2013), the DJIA is up about 50% since October, 2008, interest rates remain at record lows (and the Fed has vowed to keep them there until unemployment dips), corporate profits are at record highs, consumer confidence has more than doubled since President Obama’s inauguration, and more jobs have been added than lost every month now for almost three years.
Compare that to a panicked America on October 3, 2008. The financial world “was on the verge of an abyss,” as Paul Krugman put it in that day’s NY Times column. 603,000 jobs had been lost in September, 2008, compounding a 592,000 job drop in August, 2008. Sept. 29, 2008 had seen the Dow’s largest one-day point decline ever, 778 points. And then the bottom really dropped out: between Oct. 1, 2008 and October 10, 2008 the Dow suffered a gut-wrenching 2,400 point further drop, nearly 22% . Housing starts were at a 17 year low, and had fallen by two-thirds since January, 2006. Fanny Mae and Freddy Mac were in federal conservatorship, Merrill Lynch and Washington Mutual were married shotgun-style to BOA, AIG had lost 95% of its stock value, Lehman had folded, and badly-rattled tough guy John McCain was running around like a chicken with its head cut off. Americans quavered every time their boss walked by or another economic report loomed. No one wanted to hear or read the news–never a good sign.
As President Obama said in a mid-term self-evaluation, the President’s main job is to make Americans feel confident about the future. And there’s no doubt we’re more buoyant now than we were that horrid first week of October, 2008.