From Special Report’s All-Star Panel Friday, November, 25
On recent polling on the state of the economy and President Obama’s approval ratings:
I think it’s remarkable [that] with unemployment at nine percent and growth essentially stalled at two percent his [Pres. Obama’s approval] numbers are so relatively high. They ought to be in the ’30s. They are in the mid-40s. That speaks well for him.
And I think any Republican who assumes that because we have high unemployment they are going to win the election hands down is mistaken.
It’s true: There has been a rule since 1936 that no president has been reelected with unemployment above, I think it’s 7.8 percent. I don’t think that rule applies anymore. We sort of have gotten used to — perhaps not nine percent, but it [nine percent] isn’t as shocking as it would have been had we been at four percent last year. It’s becoming a chronic condition.
On Republican presidential contenders not formulating the case against Keynesian economics:
You don’t have to have a counter because a Keynesian stimulus has already been attempted. It isn’t theoretical argument. If it were, you are right — the Keynesian is always giving away candy, so why not receive it? It’s always a promise of: I’ll give you candy and it will stimulate the economy.
Well, we actually have had a trial of that for three years — and we’re at higher unemployment and stagnant growth. So I’m not sure the argument will matter. It will be conditions.
And in the end what might sink Obama is not arguments, but it’s going to be Europe. If Europe has [a] collapse, it’s quite possible it will send us into a second recession.
Today, Italy has to sell six months notes at six percent interest rates — here it’s zero percent — [and] its two-year notes at eight percent. Anything over seven percent is a catastrophe. It means you can’t sustain yourself….
This election could ironically hinge on nothing but whether Europe escapes its problems before November of next year.
On the suggestion that the president could then blame George W. Bush for the state of the economy:
If our unemployment is 11 percent, he can say anything he wants. He loses.