National Review’s Kevin Williamson asserts that “winning will be no bed of roses” for a prospective Romney administration:
The economic growth rate in January 2013 probably will be approaching zero, our international standing has been diminished by Obama’s clumsiness and timidity, and our fiscal position is untenable. Romney is working very hard to secure for himself a big box of insoluble problems.
This tracks with what I was thinking as of late September:
Unemployment may remain high until as late as 2017. Such job growth as we have seen over the last four years has mostly been in the low-wage service sector. The deleveraging process of U.S. households may drag on through the next decade, depressing the growth engine of consumer spending. As Federal Reserve Chairman Ben Bernanke has said, the economy as a whole can’t recover until the housing market does — which, despite signs of modest improvement, could take several more years.
But this month we learned, via Moody’s Analytics, that the deleveraging process is actually well on its way: U.S. household debt loads are comparable to where they were in 2006, and the amount of after-tax income devoted to debts and lease obligations is at its lowest level since 1984. And the all-important housing sector? Housing starts spiked in September 15 percent to their highest level in four years. Add to that healthy retail sales this past summer and rising consumer confidence.
Yet as The Daily Beast’s Daniel Gross notes, “One by one, over the past two years, the gears that make the mighty consumer engine go have been engaged.”
What this means is that, if he’s elected, Romney may inherit an economy that, while far from ideal, has achieved escape velocity. President Obama, meanwhile, will have borne the brunt of the nastiest crisis since the Depression and still gotten the boot. One man’s unjust legacy is another man’s just deserts, however. Recall that George H.W. Bush passed on an already-recovered economy to his successor, Bill Clinton, who in turn passed on a recession to George W. Bush.
For better and worse, that’s how it works: the economy is the potter and presidents are the clay.