On Tuesday, Nov. 6, Americans will head to the polls to elect the next President of the United States. Millions of dollars have already been spent on the election. Super PACs representing both President Obama and the Republican presidential candidates are experiencing a flood of monetary contributions while Americans are witnessing firsthand the effects of unlimited donations on their televisions and radio airwaves.
As the election nears, the records of both President Obama and his Republican Party challenger will be analyzed and scrutinized over and over again. Voters will decide who they think will do a better job not only governing the nation but also of leading it out of economic disaster. (See: Florida Primary: Romney Leads Gingrich by 14% After Bombarding Airwaves)
But does the President have as much influence over the nation - and specifically the economy - as the electorate thinks he does?
"The president generally matters so much less than we think," says journalist and Freakonomics Author Stephen Dubner. "Especially when it comes to the economy."
Obama's reelection partly hinges on whether or not the economy has improved since he took office nearly four years ago. There have been encouraging signs as of late that the administration's approach to tackling the recession has worked. The unemployment rate has decreased slowly but steadily over the last five months. The government reported the jobless rate fell to 8.3 percent in January from 8.5 percent in December, yet the economy could quickly reverse its recovery trend over the next few months.
Dubner says economic predictions are "hocus pocus" and it's hard to test theories about what should have been done, such as the argument over whether or not President Obama's $787 billion stimulus was too small. Interestingly, no president post-World War II has been reelected with a jobless rate above 7.2 percent.
Regarding economic predictors, Dubner goes on to note "Every time somebody says 'the last time we had a recession like this, we did this and this happened'- it's a very hard argument to make." Playing devil's advocate in the above video, he tells The Daily Ticker's Aaron Task, "For the money [the White House] has spent, the degree of unemployment it's lowered, it's pathetic."
Dubner and his Freakomonics partner Steve Levitt posed the question about the president's influence after the May 2010 midterm elections. The two interviewed economists, Constitutional scholars, business school professors and others. Even those who were actively advising the president on economic and international affairs were in agreement.
"We talked with Austan Goolsbee and Donald Rumsfeld…they will admit with no reservations the president's influence on the economy is almost vanishingly small," Dubner says.
Dubner shares Rumsfeld's response to the question:
"In business, conversely, I could go into a corporation and decide that I want to freeze the dividend, and I could do it as CEO. I could decide that I want to open a research facility in country X instead of Country Y. I could decide I'm going to downsize or sell off a division, and I did it. And you can be wrong, as well as right, to be sure. But at least you are able to do it. You don't have to go to the Congress. All you have to do is see that the Board of Directors is comfortable with what you've persuaded them makes sense. And as a result… You know, in the government, if we put something in place, in one of the departments or agencies, then Congress wants to have hearings on it, they want to pull the plan up by the roots every five minutes to see if it's still growing and traumatize it, and the press wants to critique it before it's even fifteen minutes old."
The disconnect between the limitations of the presidency and the lofty expectations the public places on the president can be disconcerting to many who believe the president has the power and ability to fix economic problems, international conflicts and domestic strife. The past few years have proven that a fractious, divided Congress leads to gridlock and stagnation — a situation even the president has little authority to reverse or supersede. As the Republicans battle for the GOP nomination and the president begins his reelection campaign in earnest, one must keep in mind that the Oval Office makes up just one part of the large governing pie.
Dubner says uncertainty about the presidency, above all, has a negative impact on individuals. "Humans don't operate well under uncertainty," he says. "That's why a lot of capital is sitting around both on the employment side and the capital side."