Obama’s Dusk, Obama’s Morning

High unemployment is the domestic equivalent of an unpopular war–an overpowering drain on presidential popularity that can’t be countered with policy achievements in other areas, personal charm, or any other conventional political weapon. Barack Obama may soon offer the latest affirmation of this.

A few weeks ago came news that the unemployment rate for June had climbed to 9.5 percent—a slight uptick that silenced wishful suggestions that the economy had bottomed out and that a recovery would soon take hold. Now comes the Wall Street Journal’s latest survey of 51 leading economists. Their consensus: unemployment will soon hit 10 percent and will stay there through the first half of 2010, declining only to about 9.5 percent by the end of ’10.

If this bears out, the political implications are obvious: Republicans will fare well in the 2010 midterm elections—and their success will be universally interpreted as proof that the public has turned on Barack Obama.

Why is it worth pointing this out now, 16 months before voters head to the polls? Because we’ve actually seen a script very similar to this before, and it offers some significant lessons as next years approaches.

The last time unemployment soared this high was in Ronald Reagan’s first term. Reagan, like Mr. Obama, came to office as a transformational figure, his rise powered by his sunny warmth, good humor, and a consensus that his predecessor’s party had run out of answers to the country’s problems.

In the wake of Reagan’s win, polls showed a steady rise in the number of Americans calling themselves Republicans—and a corresponding drop in Democratic affiliation. When the Democrats fell back on their stale, pre-1980 rhetoric, it only bolstered Republican confidence that the 1982 elections would bring further G.O.P. gains—control of the House for the first time since 1954, many declared, would soon be at hand.

Democrats have been just as giddy since last November. This time, polls show a surge in Democratic affiliation. Nor can the Republicans seem to get their act together, with Dick Cheney, Rush Limbaugh and Sarah Palin—symbols all of what the country rejected last fall–still largely defining the party’s message. Democrats now talk of a favorable Senate map in 2010, with an eye to expanding their majority well past the 60-seat mark.

But the Republican confidence of early ’81 was undermined by the same thing that now threatens Mr. Obama: unemployment. Unlike Obama, Reagan didn’t technically inherit a recession. But unemployment stood at 7.5 percent when he took office, inflation was higher, and there was wide consensus that the economy was stalled. He pushed his signature tax cuts through that summer, and almost immediately after, the economy plunged into a full-scale recession

At the end of September 1982, unemployment hit 10 percent, prompting most Americans to give up on his economic plans. They liked him personally, but he’d killed the economy, or so they concluded. The once optimistic G.O.P. lost 26 House seats and broke even in the Senate (after early predictions of a four- or five-seat gain).

It’s looking more and more like that’s about where Mr. Obama and the Democrats will end up in 2010. With unemployment stubbornly high, the G.O.P.’s message—that a failed stimulus (and maybe health care reform, too) only made things worse—will resonate and voters will tune out Democratic pleas to give things just a little more time. A significant loss of House seats would then be inevitable, and that “favorable” Senate map won’t yield any gains.

At the end of ’82, the consensus was the country’s flirtation with Reaganism had ended and that the Democrats were back. Nothing could have been further from the truth. Unemployment finally crested in December ’82 (at 10.8 percent), then began a steady, years-long decline. By ’84, voters were celebrating the same Reagan policies they’d turned against just two years earlier, and a 49-state landslide ensued.

There’s reason to believe the same will be true for Mr. Obama. Even the Wall Street Journal’s pessimistic economists agree that the effect of this year’s stimulus won’t really be felt until next year, with its implementation staggered. That sets up an eerily similar scenario: a popular rejection of Obama’s policies in 2010, followed by an enthusiastic re-embrace of them in 2011 and 2012, as the economy returns to life and unemployment—a lagging indicator—is finally brought to heel.

It’s a better bet by the day that 2010 will be a good year for Republicans. But it’s an equally good bet that it will be their last good year for a long time.

Obama’s Dusk, Obama’s Morning