Obama: Connecting the Dots to Win

For a brief interlude earlier this year, it looked like the economy would heal just in time for President Barack Obama’s reelection campaign. Employers were creating jobs at a robust 200,000 per month, sending the unemployment rate beneath 9 percent for the first time in 21 months. The stock market refilled battered 401(k)s with a nifty four-month rally. And the White House confidently predicted that the U.S. would soon regain all of the ground lost in the recession.

That was before an earthquake in Japan, unrest in the Middle East, debt woes in Europe, and dysfunction in Washington conspired to sap the momentum. Suddenly, before you could say “Jimmy Carter,” the notion of an election-year expansion had evaporated, replaced by fears of a recessionary relapse. “At one time, it looked like the President was going to be a shoo-in. Then they let the air out of the recovery balloon,” says Chris Rupkey, chief financial economist with Bank of Tokyo-Mitsubishi UFJ in New York.