With the average price of gas nearing $4 a gallon and the unemployment rate still above 8%, the economy is certainly on most voters' minds this election year. (See: U.S. Consumers Stronger Than Expected: Barry Ritholtz Isn't Buying It)
But recent economic data, particularly retail and auto sales, suggest that the U.S. consumer is doing better than in recent years and is faring rather well in the face of rising energy costs. There is also the jobless rate, which is on a downward trend. In January, the last month of recorded data, the rate of unemployment ticked down for the fifth straight month to 8.3% while the rate of new jobs created was the fastest in nine months.
Now all eyes are on the February jobs report out Friday. Ahead of this critical number, the ADP employment monthly report showed 216,000 private sector jobs were created last month, which was in line with expectations. The CEO of ADP said "virtually every sector of the economy added jobs."
While these factors portray an economy that has regained some momentum, Republicans on the campaign trail see this improving picture differently. The current GOP front-runner Mitt Romney said the following in his Super Tuesday victory in Boston earlier this week:
"To the millions of Americans who look around and can only see jobs they can't get and bills they can't pay, I have a message: You have not failed. This President has failed you. President Obama said he would create jobs. For 36 months, unemployment has been above 8%. He said he would cut the deficit in half. He's doubled it. Today, our debts are too high and our opportunities are too few. And we've seen enough of this President over the last three years to know that we don't need another five."
Whether Romney, or any other Republican, acknowledges the positive trend or not, it is hard to dispute the data. And if the economy continues to improve, presumably so do the chances of Obama's re-election, which means the GOP will have to refocus its economic message in some other way.
Bill Kristol, editor of The Weekly Standard, a conservative magazine and blog, joined The Daily Ticker's Aaron Task to discuss just what the Republican message must be on the economy if the GOP wants to defeat Obama in November.
"I do think the Republicans have to step back in a sense and take a bigger view of the economic situation," he says.
Here's how he frames it. "It's great if we have short-term 3% or 4% growth instead of 1% or 2% growth but is the economy healthy? Is $1 trillion in debt a year sustainable? Is the size and scope of the federal government the way we want to govern the country in the future? Can we leave entitlements unreformed?"
Republicans need to shy away from specific issues and "they really need to explain we are on the wrong track in a bigger way," says Kristol.
On the issue of tax and entitlement reform, for example, polls show most Americans support raising taxes on the wealthy and oppose cuts to entitlement benefits. Both of those ideas are not popular with the Republican candidates, especially with yearly trillion dollar deficits.
Kristol says Republican voters should be asking themselves four key questions:
1) "Can we afford [those programs]?"
2) "Will raising taxes really help provide the economic growth and help us afford the government programs we do need?"
3) "Do you want government to be bigger or smaller "
4) Do you generally think that we need to re-limiting government or do you just want to continue down the road of Obamacare, the stimulus and the like?"
"If it becomes a bunch of micro choices I think President Obama could be in decent shape," says Kristol. "If it becomes a big question about the size and scope and the direction of government I think Republicans have a pretty good shot."
There is one issue, however, Kristol believes every Republican must confront: the big banks on Wall Street. He says Rick Santorum has done the best job at connecting with Middle Class voters."I think [Santorum] senses that Republicans can't be the party of Wall Street," Kristol says. "They have to be the party of Main Street. That a lot of what has gone wrong has been due to Washington but a lot of what has gone wrong has been due to Wall Street as well," he notes. "I think that message has to be included by any Republican candidate."
Kristol goes on to say that tackling Wall Street is a reasonable agenda for both Democrats and Republicans. "If they are too big to fail, then make them less big," he says. "That's the simplest way and doesn't involve a lot of regulation."