Jobs Jobs Jobs
Will a Down Market Swing Votes or Is Job Growth the Key in New York?
By Joseph Mercurio
July 26, 2002
The economic environment has a profound effect on election outcomes. Job security and an improving net paycheck for parents, coupled with easily found better jobs for their children, are the rank-and-file voter's indicator of positive economic performance. The stock market's performance is of interest to the financial press and big investors, but rarely moves vote by itself.
Back in the 1990's the financial markets were filled with "irrational exuberance" (coined by Alan Greenspan in 1996), which led to rising markets. Everyone was looking the other way as some corporate heads raped their companies with lavish personal enrichment packages and duplicity on the books. As long as everyone was making money, "infectious greed" made everyone look the other way.
As the market slipped and regulators began to notice cooked books, the new mindset took over. The Gallup numbers on the public's view of the economy has reversed 180 degrees over the last two years. The view had been very strong: 74% thought the economy was excellent or good, and only 25% thought it was just fair or poor. Those kinds of numbers makes entrenched incumbents sleep soundly at night.
Those numbers have reversed and all hell is breaking loose. Even though corporate wrongdoing is being exposed and bad guys are being indicted each week, there is a move to pass more laws to improve investor confidence in the economy's basic institutions. In the information age bad data is worse than robber barons exploiting the masses. Now Bush's job approval is at 73% positive and 21% negative -- a net shift down of 32 points since September.
While the big guys worry about "thoughtless despair" (Bloomberg's new quotable remark), the voters are watching the market as good theater. Jay Leno joked about it being fun to watch the cable guys being hauled off in handcuffs and Don Imus was giddy at the stock losses for top executives.
Some voters will react negatively to their retirement savings dipping but most will assume it is a temporary dip that comes with an increase in home value. If Bush's federal prosecutors and state Attorneys General indict enough people and the new rules seem to clean up corporate reports by Labor Day, the fall should be safe for elected officials who maintain a demeanor of shock at corporate immorality reminiscent of Claude Rains in "Casablanca."
If the current unbalance persists and causes a drop in purchases of large ticket items -- followed by layoffs, cuts in overtime and general job and pay insecurity -- all bets are off.
In New York Golisano's pitch as a self-made man who created upstate jobs might resonate with more voters than in his past races. Not that he would win -- after all, voters gave him little notice twice already -- but he can get more than his current polling and the high single digits he received last time. Currently he is taking evenly from Pataki and the Democrats. If he gets above 10%, he will take more heavily from the Governor.
The economic turmoil could be a good opportunity for the Democrats in the General Election -- if they present an optimistic pitch that they can do better at creating job and job security than Pataki has to date. In the short term it can affect the outcome of the Democratic Primary. McCall must show that his stewardship of the state's funds has been exemplary, while Cuomo must make the opposite case.
Unfortunately for Cuomo his failure to come out of the Democratic convention is distracting from his ability to make a clear case against his opponent on economic and investment issues.
The decision to bypass the convention and start a grassroots campaign was ill advised. It cut into his ability to raise money and it added cost to the campaign. While Team Cuomo intended it to appear as the mass of Democratic rank and voters rising up to overturn the party bosses, it was merely another in a string of "Astroturf" campaign moves designed to get ink. In retrospect, the ink on a coherent economic message and firm commitment to job growth would have been more powerful.
For the Governor, things have to break properly after the primary. The market must come back, job growth and net payroll must improve and consumer spending needs to stay high in the state, including tourists coming here and spending money.
Are the Democrats capable of an optimistic message? Can the Governor convince voters that the future will remain rosy under his leadership? More later.
