The case for four more years
The question on every American's lips right now is: are you better off than four years ago? On most indicators the answer is yes, something Barack Obama will try to drive home today.
It’s that old Ronald Reagan zinger: "Are you better off now than you were four years ago?”
The conservatives have been misusing this question since the beginning of their own convention in Florida, where former Massachusetts Governor Mitt Romney was officially nominated as their candidate. Until Clinton addressed the Democratic Convention in Charlotte, North Carolina, his party’s response had been tepid.
"In Tampa, the Republican argument against the president's re-election was pretty simple, pretty snappy: we left him a total mess, he hasn't cleaned it up fast enough, so fire him and put us back in,” said Clinton to an adoring crowd on Wednesday evening (US time).
The 42nd president directly addressed the "better off” question by recalling that the economy was collapsing and shedding 750,000 jobs a month when Obama assumed office. Are they better off now? Of course!
But he also reminded voters of the first few years of his own presidency that is now viewed in the US as an economic success story.
"I experienced the same thing in 1994 and early 1995. Our policies were working and the economy was growing but most people didn't feel it yet. By 1996, the economy was roaring, halfway through the longest peacetime expansion in American history.”
The year 1996 marked the end of Clinton’s first term, but the beloved speaker was swift to point out the difference between his first four years and Obama’s is "purely in the circumstances”.
"President Obama started with a much weaker economy than I did. Listen to me now. No president – not me or any of my predecessors could have repaired all the damage in just four years. But conditions are improving and if you'll renew the president's contract you will feel it.”
The Democrats are strong when it comes to attacking Republican policies to subtly dismantle Medicare, cut social security, while rapidly increasing already ludicrous levels of defence spending and cutting taxes for upper incomes. As Clinton put it: "We simply cannot afford to give the reins of government to someone who will double down on trickle down.”
But any vision Obama presents on an economy for the 21st century that can reverse the country’s $US1 trillion budget deficit and $US16 trillion debt is undermined by the perception that his first four years has been riddled with economic missteps.
Clinton’s speech filled this crucial gap, which is why it will prove to be a more important moment in the Democratic Convention than the address from First Lady Michelle Obama – who was rightfully received with universal acclaim.
The gap was an answer to something this correspondent calls "the Reagan rules”.
The first Reagan rule you know - it’s the "better off” question. The second is the fact that no US president since FDR has won re-election with an unemployment rate above 7.2 per cent.
Reagan won with 7.2 per cent. Obama is sitting at 8.3 per cent. How can the Democrats defend the economic record of a man the voters have never returned to the White House? That’s how the argument goes.
A few days ago, Vice President Joe Biden finally came up with a good answer to the first Reagan rule.
"You want to know whether we’re better off?” Biden asked a crowd in Detroit on Labor Day. "I’ve got a little bumper sticker for you: "Osama bin Laden is dead and General Motors is alive.”
But as Clinton touched upon, a defence of Obama’s economic record can go well beyond the auto-bailout and restructure when using the "better off” rule.
Four years ago, George W Bush was still in office. In fact, the US economy is actually now in positive territory when it comes to private sector jobs since Obama took office, which is nothing short of miraculous. The loss of 300,000 jobs overall since February 2009 is due to reductions in the public sector; something Republicans would surely say is a good thing.
It’s the jobless rate that gives you some hint that the "better off” question is a dumb one. When Obama assumed office the economy was haemorrhaging jobs – over 750,000 a month.
In an interview with CNBC in July, Romney said that regardless of who wins in November, the president should be given between six months to a year to implement their policies before judgement begins on their economic record.
If we afford Obama the same courtesy and take those same measurements not from the president’s first month in office, but 12 months later, the US economy has added four million jobs on a net basis, real wages have increased 1.5 per cent and the unemployment rate has fallen 1.5 per cent.
Tellingly, if you move the dial in the other direction to include the last two years of the Bush administration, the figures are appalling.
This isn’t going unrecognised. Polls consistently show the majority of Americans primarily blame the 43rd president for the current economic malaise and jobless rate.
Which brings us to the second Reagan rule. The 7.2 per cent unemployment rule looks to be pretty inflexible; FDR won his second term in 1936. What that rule doesn’t take into account is that both FDR and Reagan won in landslides.
No one’s suggesting that a high jobless rate is an asset to a sitting president. But American voters will support a president with high unemployment if they can be shown the last four years haven’t been a waste of time and there’s a compelling vision for the next four and beyond.
Clinton helped deliver on the first point. At around 10pm in Charlotte (midday AEST) Obama will get his chance to address the second.
Alexander Liddington-Cox is Business Spectator's North America correspondent.