October 7th, 2011
10:17 AM ET

Zakaria: How Obama can overcome the down economy

I talked to John King the other day about President Obama's reelection strategy in this down economy. Take a look at the video above and/or the transcript below:

John King: The data is just simply not good for the president. And then on top of that, that's looking backward on the data we already know, today markets are talking about a bear market, financial markets don't look good, the housing market don't look good, the president can't look out at the horizon and see anything to be optimistic about, can he?

Fareed Zakaria: It looks pretty grim. There's a famous model that was designed by a professor in economic at Yale, Ray Fair, which predicts outcome of presidential elections. He's never been wrong in 40 years. And the basic inputs are economic growth, unemployment, inflation you know your basic economic data that the theory is that the campaign itself is actually irrelevant, that you give me the economic data and I will tell you whether the incumbent will get re-elected. Well, if you use those kinds of models and those numbers, the situation looks very tough for the president.

John King: And this one issue. The president answers the question, 'No, people aren't better off than they were four years ago.' This is in one issue on which you would say he's in absolute agreement with his chief nemesis politically, that would be the House Republicans. Listen here for the majority leader, Eric Cantor: "The president said yesterday that people in the country are worse off than they were when he was elected. We feel the same way. The economy continues to sputter." Is the president's only hope to say it's not all my fault, it's their fault too?

Fareed Zakaria: I don't think that's going to be as convincing. I think his hope is probably the tack he's taking to say, 'Things are very bad; they're bad because of the very broad forces beyond our control, the collapse of Lehman, the financial crisis, the global financial crisis, Europe and the euro zone crisis. But here's the issue, I have a plan. I have a plan to help get us out of this. And that is my jobs plan. And I have a way to pay for it. And the Republican Party, on the other hand has no plan.'

He has to draw that distinction and he has to hammer home the idea that he has a set of proposals that are powerful that would take immediate effect that would help Americans and the other side doesn't. I don't think spreading the blame around or complicating the issue is going to help as much.

Elections are referendums. And there has to be referenda on something. If it's not about the plan, it's going to be about him. And, frankly, I think he's better off it being about a comparative analysis of the plans rather than just a referendum on him.

John King: And how complicated is it? How hemmed in is he by the fact that a lot of the long-term things that need to be done, whether entitlement reform, dealing with debt, other structural issues in the U.S. economy might be at odds. Those long-term challenges might be some would say certainly at odds with his short-term political needs?

Fareed Zakaria: I think the sensible thing to do economically is pretty clear, which is to have a short-term plan that has some stimulus for the economy, and various forms, tax breaks, extensions of unemployment, a very significant infrastructure bill because that is what you get. What the government can do more than anything else is rebuild America and put people to work and a debt reduction plan.

And you do it altogether so that you reassure the markets that while spending some money now, you're going get your fiscal balances in order. Politically this seems impossible. And that is the dilemma I think that the president is grappling with that he's not able to get any of that stuff done that would actually have an impact on the economy because there is so much political gridlock and opposition in Washington that he can't manage to make it happen.

soundoff (24 Responses)
  1. Ellinocanuck

    Agree 100%. Love your comments Fareed. Keep up the good work!

    October 7, 2011 at 1:10 pm | Reply
    • j. von hettlingen

      Yes, I'm afraid, however good plans Obama has, he wouldn't get the support in Congress. His adversaries want to unseat him. Unfortunately his re-election chances depend so much on the country's economy. Voters want instant solutions. They don't care that unemployment can't be reduced and growth be improved in a trice. They are fickle and impatient, exactly what the founding fathers dreaded!

      October 8, 2011 at 4:02 pm | Reply
    • Josh Barnett

      Why is everyone afraid to say the obvious ? Tariff China. They are screwing us, and undervaluing our currency to take our jobs. No jobs = no money. No money = excessive debts. This is an incredibly simple formula and we are looking everywhere but the one place that matters.

      Someone will no doubt reply that we owe China $1 trillion, what did we owe them in 2000? So guess what, here's your money and it will come from the tariffs we are about to give you. Have a nice day.

      October 9, 2011 at 2:27 am | Reply
    • Cantmakethisup

      I watch Mr. Fareed program all the time and he makes a lot of sense, he shares one quality with president Obama: not enough bite.

      October 29, 2011 at 1:30 am | Reply
  2. steve

    Fareed is the kind of sensible person that would never cut it in our political sport

    October 7, 2011 at 4:41 pm | Reply
  3. NonZionist

    / / / Obama should rename America "Iraq". This will make it possible to take the hundreds of billions of dollars we spend on nation-building in Iraq, and use that money to build our own nation.

    / / / Seriously, our country is threatened by the collapse of our economy and the collapse of our infrastructure. It is the job of the "Defense" Department to DEFEND our country, and it's time to start doing that: Spend the hundreds of billions allocated to "Defense" on infrastructure reconstruction.

    October 8, 2011 at 1:04 pm | Reply
    • Gethetruth

      @NonZionist Nice logic there ! The problem is not the Economy at all, the Economy can be fixed. They US sovereign debt is not the problem. The real problem is the GOP congress! They want control again so that they can loot as they all ways do. Every republican presidency has looted the treasury by creating war and justifying it. Go back to Vietnam era and follow the trend. It is very unfortunate for Obama, not only was he disliked for being half white by the republicans but he came in at the worst time in modern history.

      October 8, 2011 at 7:57 pm | Reply
      • John in Colorado

        Gethetruth is absolutely correct. The voters should punish the GOP/Tea Party for sabotaging the economy and hurting the country and its people in their zeal to regain power. This was done before Mr Obama's presidency even began with the fake crisis that the banks were about to fail and that GM was about to fail. They are not the majority party in the government. They only hold the US House. Yet they act like they deserve to govern the way they want to with no compromise allowed. That is not how things get done in government. Our problems, like the debt-ceiling crisis were self-inflicted. Now we will pay billions more in interest because our credit rating was reduced. Businesses who are sitting on $2 Trillion in cash refuse to expand and hire because of the uncertainty in government. This is exactly what Mitchell, Cantor and Ryan have up their sleeve. We should not let them get away with it. They have no standing or credibility to come back to voters less than four years after they so badly managed the economy and added so much to the deficit that brought on the current recession, with the claim that they all of a sudden can do better. They had 8 years and in six of which they controlled both houses of Congress in order to work their economic magic and they failed miserably. We have such short memories.

        October 10, 2011 at 8:37 am |
  4. Muin

    "I have a plan" don't work. Former president raised taxes and did welfare reform. And still won reelection because businesses knew the rules to play the game for next five to ten years.

    October 8, 2011 at 3:20 pm | Reply
  5. lachman

    President Obama should immediately cut off all aid to all countries where dictatorial regimes exist, and utilise these funds in helping lift the American economy, and also utilise part of these funds in African countries where millions and millions of children die daily of hunger.

    October 8, 2011 at 5:18 pm | Reply
  6. Goldie

    Get real. Obama is way over his head. Zakaria, you are a biased sell out. Where is all the objectivity that we used to think reporters had? I used to admire you until you showed yourself as an anti semite. You really sold yourself.

    October 8, 2011 at 7:20 pm | Reply
    • Gethetruth

      Where is the Bias ? Did you even read or listen ? So read my piece below and know yourself.

      October 8, 2011 at 8:08 pm | Reply
  7. Gethetruth

    @NonZionist Nice logic there ! The problem is not the Economy at all, the Economy can be fixed. They US sovereign debt is not the problem. The real problem is the GOP congress! They want control again so that they can loot as they all ways do. Every republican presidency has looted the treasury by creating war and justifying it. Go back to Vietnam era and follow the trend. It is very unfortunate for Obama, not only was he disliked for being half white by the republicans but he came in at the worst time in modern history. Cain does not stand a chance. But if the Democrats want to be assured of winning, they should have Hilary Clinton run. It will be great because, not only will we have had the first Black, we can have the first woman. Both being democrats, clearly show the bigotry of the republicans. However, the Republicans will do anything (sell their Grandma too), so I won't be surprised if they had Cain run against Obama. They even had a black GOP leader until recently. They will bend over backwards to get the presidency back. So they will try to find the "Swift Boat' card again and engage Carl Rove to hatch some devious lies.

    October 8, 2011 at 8:05 pm | Reply
  8. Joe

    Employers won't hire because they have no idea what the healthcare plan will do for them that is positive. Obama traded employment numbers for Obamacare. and the stimulus, "unemployment won't exceed 8% if this passes" please. And handing over the auto companies to the unions instead of the bondholders in a bankruptcy. And "eliminating ATM fees" so banks can raise other fees... Just leave things alone and we'd have been better off.

    October 8, 2011 at 11:58 pm | Reply
  9. JoeT

    Employers won't hire because there is not enough demand for them to ceate or sell more products or services.

    October 9, 2011 at 5:35 am | Reply
  10. Donald Edmond, Esq.

    This is the same Fareed Zakaria that was 100% wrong on Iraq.
    Zakaria blindly supported the invasion of Iraq, along with his fellow self-important idiot, Thomas Freidman of the NY Times. As the reasons, justifications and benefits of the Iraq war became laughably weak, Zakaria defended Bush, and Iraq. Now the same Zakaria is giving the United States of America tips on how to better our country? No thanks. Maybe its just me, but when someone (Zakaria) is wrong about the same thing, the same trillion dollar waste for 5 years...that's not the guy you go to for advice about anything except how to fail.

    October 9, 2011 at 1:57 pm | Reply
  11. krm1007

    Here's how....lets start with the no brainers/low hanging fruits/shovel ready items....first, get the jobs back from India that were sent there at the expense of american middle class. Then stop the H 1B visas to Indians who take the jobs away from american middle class WITHIN USA.The rest can follow.

    October 9, 2011 at 2:21 pm | Reply
  12. Prolife

    Solve the housing problem, foreclosure, refining morgages problems, national dept problem, national dept reduction and employment problem. and you solve your reelection problem

    October 10, 2011 at 12:28 am | Reply
  13. Chuck

    The rich won't hire because their having too much fun buying congress and watching us little fight like dogs. Somebody get Vick on the line.

    October 11, 2011 at 2:57 am | Reply
  14. Alejandro Dron

    ‘Exposed Center’
    Graphic Commentary on Peeling Off

    October 11, 2011 at 12:29 pm | Reply
  15. rs1201

    I keep changing my opinion about Zakaria...sometimes he makes sense and other times...he simply doesn't. Obama's plan is to take from middle class families...yes, middle class....families making 250K and individuals making 200K in big cities such as NY are middle class...and giving it to the poor...yes, the poor...families making less than the numbers mentioned above and living in NY or other big cities should consider themselves poor or at best lower lower middle class. Obama's plan will just increase the size of that poor or lower lower middle class by taking away from the real middle class.
    We just have to face it...we elected a miserable moron who doesn't know which end is up.

    October 12, 2011 at 6:42 am | Reply
  16. johnny

    Americans must take matters in their own hands so to speak. The Occupy Wall Street protestor must go one step further to scream for accountability by their politicians. Protestors must insist that a President or his men who failed the economy by engaging America in meaningless and costly wars should be held accountable when the nation's weath is squandered, without any gains.

    Until and unless American itself is in imminent danger of an all out war by any aggressors, America must keep its nose out of other peoples politics.

    American people must first approve any war in a foreign country, and not the Congress or the President. Because it involves American lives and taxpayers money.

    Its only by keeping its nose clean that US would have more international friends – and be safer from any terrorist attack than before.

    October 25, 2011 at 1:15 am | Reply
  17. Cantmakethisup

    Unfortunately President Obama has squandered trillions on the rich as soon as he took office, instead of cleaning house.

    He should have invested that money in the very program that he is trying to implement now.

    Too little?? Too late??

    October 29, 2011 at 1:13 am | Reply

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