Capital Goods
Dread it when credit is due
By Scott Mooneyham

The start of another major election year is three months away. Unfortunately for the country, and for some of the candidates, a summer that began with a bit of economic hope ended with a lot of pessimism. Politicians have had to face up to a cold, hard reality: The sour economy isn’t likely to be much sweeter come campaign season. Even so, assigning blame, as candidates always encourage voters to do when joblessness is up and markets are down, might not be so cut and dried in 2012. North Carolina is now a state where both Democrats and Republicans hold the levers of power. Tarring an opponent with the brush of high unemployment and sluggish economic growth may mean getting some of that sticky muckiness on political allies and friends. That doesn’t mean the tar buckets will stay in the shed.

The Democratic governor and Republican legislature have been going at it over unemployment. When joblessness in the state again edged above 10% in August, Gov. Beverly Perdue and GOP legislative leaders flung blame each other’s way. She attributed the rising numbers to Republican budget cuts, noting that private-sector jobs increased during the month. “The severe cuts to education, including teacher positions, inflicted by the Republican legislature are taking their toll on our classrooms and our workforce,” she said. Senate leader Phil Berger, an Eden Republican, said Perdue offered up more of the same thing that put the state “into a financial ditch.”

The finger-pointing is just starting. Wait until highly paid political consultants take a turn at helping Perdue, Berger, et al. craft messages for TV and campaign mailers. Gary Pearce, who once worked as one of those political consultants, said the dour economy will be a constant theme of the campaign season. “It’s going to be the biggest elephant in the room — or the biggest donkey.” Pearce, who ran campaigns for Gov. Jim Hunt and U.S. Sen. John Edwards, believes that the Democrat now in the governor’s mansion will have a hard time shaking off blame for the economic doldrums. Incumbents in the White House typically suffer in a down economy, he says, and Perdue certainly benefited from Barack Obama’s coattails here in 2008. But at least she has a foil this time around — the Republican legislature.

“Perdue’s best strategy, yes, is to blame them. I think that is clearly what she is going to try to do,” Pearce says. It’s a strategy made simpler by Republicans passing a state budget over her objections, then overriding her veto. She’s already trying to paint that budget as contributing to the state’s economic woes. Pearce claims most elections are decided on change versus the status quo. If the race for governor in 2012 is, as many expect, a rematch between Perdue and former Charlotte Mayor Pat McCrory, then the Republican would represent change. Perdue will try to sell the electorate on her being the only thing standing in the way of a Republican governor rubber-stamping the actions of a Republican legislature.

Even if she’s successful with that, individual legislators still might escape blame when it comes to the economy. Though polls typically show that voters are down on state legislatures and Congress, they often have a different opinion about their own representatives: It’s the other guys who are the problem. But in this season of discontent, Gallup polls show anti-incumbency sentiment nationwide rising to unprecedented levels. In North Carolina, voter discontent might also settle on the fact that Republican legislators came into office talking about how they would focus on jobs and the economy, then making a lot of headlines for embracing abortion restrictions, gun-rights laws and an effort to put a gay-marriage ban into the state constitution. Those controversial measures nearly obscured GOP victories on lower taxes, medical-malpractice reform and consensus workers’ compensation changes.

One hope that all incumbents, whether governor or legislator, should abandon is that of a big economic turnaround in North Carolina in 2012. An index of economic indicators compiled by N.C. State University economist Mike Walden recently showed declines in four of five measures. He interprets those falling indices to mean that growth will continue to be sluggish at least another four to six months, even if the economy doesn’t contract and tip into a double-dip recession. Other economists predict that job numbers won’t improve significantly until 2014. Voters are grumpy, and they’ll be taking that out on someone next year. Divided power may make determining how they allocate that punishment more difficult than in the past. But it doesn’t change the basic formula: Someone in office needs to pay.

Scott Mooneyham is the editor of The Insider, www.ncinsider.com.