From its start, the U.S. economic recovery has been unusual. Even now, three years into the upturn, growth is strangely uneven. Some states are booming. Others remain mired in the slowdown.
With things somewhere between "Morning in America" and recessionary malaise, both Presidential candidates are struggling to come up with a coherent message that will play in vital battleground states with widely divergent outlooks. The President had hoped to run for reelection on a robust recovery, but the continuing struggles faced by industrial states make his paeans to a strong economy ring hollow to many swing voters. At the same time, the national rebound has forced Kerry to change his downbeat rhetoric as he tries to woo voters in key states such as Florida and Arizona that are prospering.
As a result, both candidates are resorting to some fancy footwork. Bush is reminding anxious voters of the post-September 11 shocks the economy has endured, stressing his empathy for suffering workers, and charging that Big Government Democrats would stifle growth. Kerry, meanwhile, is playing down talk about "the worst economy since Herbert Hoover" and emphasizing a middle class squeezed by rising costs for health care, gasoline, and tuition.
For Bush, the manufacturing meltdown in Michigan, Ohio, and Pennsylvania puts him at risk of losing three big battlegrounds, totaling 58 electoral votes. In Michigan, Steven Jakubiak, a mailman in Battle Creek, says the President has not concentrated enough on the economy and has spent too much time on Iraq. "I understand the safety of our country, but that's not the only issue," says Jakubiak, 50. "Jobs and manufacturing are just as important." Bush seems to have heard that message during a recent visit to Ohio. The state has lost 232,000 jobs -- a 4.1% drop -- since he took office. "The economy is strong, and it's getting stronger," Bush asserted in a July 31 event at the Canton Memorial Civic Center. But he added: "It lags in places like eastern Ohio, I know that. I'm aware of that."
Less clear-cut are the 8 swing states with 79 electoral votes that, while improving, aren't close to regaining the jobs they have lost in the Bush era. Among them are three states the President carried in 2000: Arkansas, New Hampshire, North Carolina, and West Virginia. Democrats are hoping that the loss of North Carolina jobs -- payrolls have dropped during the Bush years by 94,100, or 2.4% -- could move Vice-Presidential candidate John Edwards' state into their column. "I've seen a lot of companies move their help desk to India," grumbles Chris Terrell, 33, a telecom sales representative in Greensboro. A lifelong Republican, Terrell says Kerry "could steal me away."
On the flip side, the booming economies of Republican-leaning Arizona, Florida, and Nevada are likely to help the President hold on to the three states -- with 42 electoral votes. Arizona has added 75,000 jobs since January, 2001, while Florida has added 286,000, for increases of 3.3% and 4.0% respectively. And Nevada created 75,000 jobs in the same period, for a 7.7% gain.
Not surprisingly, voters in such states are upbeat. "Arizona is the boom center," says Cathy Weir, 39, a bank branch manager at Fidelity National Title Insurance Co. in Scottsdale. "The low mortgage rates have kept me smokin' busy."Adds Dan Stark, 50, a marketing director for Boyd Gaming Corp. (BYD) in Las Vegas: "Bush figured out how to grow the economy, and the deficit is starting to shrink." Meanwhile, robust growth in New Mexico -- the only state that avoided slipping into recession -- gives Republicans hope of capturing a prize they lost by just 366 votes in 2000.
Republicans are also optimistic about swing states where the recovery has been strong, including Minnesota and Wisconsin. Al Gore narrowly carried both four years ago, but Bush is targeting them now. Says Andy Laperriere, a managing director at institutional broker ISI Group Inc.: "It's a real challenge to convince people that the economy is bad when they see 'Help Wanted' signs all over."
Still, for every bit of good economic news there are warning signs, too. In a July 30 report, the Labor Dept. says that only about two-thirds of long-term workers who lost their jobs during the first three years of Bush's Presidency have found new work. And of those who have found positions, more than half of the new jobs pay less than their old salaries.
To downplay such negative trends, GOP strategists are stressing social issues such as abortion, gay rights, and the death penalty in an effort to win the votes of financially stressed but culturally conservative Catholic swing voters. And with the President holding a wide lead among voters who are most concerned about terrorism, his campaign is taking every opportunity to emphasize Bush's role as Commander-in-Chief. The danger: By gliding over lunch-pail economic concerns, he risks coming off as out of touch with the daily struggles of working families.
Kerry's strategists think they have found a message that will play in states with good economies and bad. "There is an economic argument that works everywhere -- and that is that middle-class voters feel increasingly squeezed by prices that are rising and incomes that are stagnant," says Kerry campaign pollster Mark Mellman. "Whether you're talking about Ohio or Nevada and Arizona, health-care costs are skyrocketing."
That resonates with voters like Sienna Wyniemko, a buyer's assistant at Sharon Luggage & Gifts in Charlotte, N.C. "We have all felt the squeeze because our health-insurance premiums have gone up, and for the most part our benefits have not," says Wyniemko, a Bush voter in 2000 who is undecided now. "The result has been there haven't been any pay increases in three years."
Still, the Democrats acknowledge that they tailor their economic message to fit local economic realities. That, says senior Kerry strategist Tad Devine, means emphasizing job losses in Ohio and sluggish salary gains in Florida. The strategy comes with a risk, though: The litany of woes leaves Kerry open to charges that he's too pessimistic about the rebounding economy.
If solid economic growth means Kerry can't carry Arizona, Florida, or Nevada, can he still win the election? The answer is yes -- if Ohio's job losses tip that large, must-win Bush state to the Democrats. So, the economy could certainly make the difference this year. The only question is, which economy?
By Richard S. Dunham and Rich Miller in Washington, with Ann Therese Palmer and Michael Arndt in Chicago, and bureau reports