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Once Again, It's The Economy

By Dan Balz
If 2007 was the year of Iraq in the presidential campaign, 2008 is now shaping up as the year of the economy.

The stock market has registered one of its worst year-opening performances ever. The first jobs report of 2008 showed continued softening in labor markets and unemployment jumped to 5 percent, a two-year high. The mortgage crisis has not abated and continues to spook economists and local elected officials.

All of this has significant implications for the presidential campaign. The economy, stupid, is more than a historical artifact from the 1992 campaign. It may suddenly be a call to arms for all the presidential aspirants.

Change remains the dominant force in this election year. Among issues, national security remains vitally important. But with economic concerns intensifying, the candidate who wins the economic argument may win the presidency. Certainly the issue will help shape the Democratic and Republican nomination battles over the coming weeks.

The economy's salience as an issue has been rising. In New Hampshire, more Republicans and more Democrats cited the economy as the most important issue now facing the country.

Among Democrats, 38 percent said the economy is the big issue, compared with 31 percent who named Iraq and 27 percent who said health care. Among Republicans, 31 percent named the economy while 24 percent cited Iraq and 23 percent said illegal immigration.

Nationally, the economy began popping to the top of the list of voters' concerns before the turn of the year. A Washington Post-ABC News poll in early December found the economy and Iraq essentially tied as the top issues of concern. The previous month, Iraq was the dominant issue by a margin of 2 to 1.

Which candidate stands to benefit most as voters' concerns about the economy rise? At this point, Hillary Clinton may have some advantage over Barack Obama. For both Clintons, economic issues have been central to their political thinking and strategy from the day Bill Clinton announced his candidacy in 1991.

His was the campaign to restore the forgotten middle class. Hers, beginning last spring, sought to focus on the invisible Americans ignored or left behind by the Bush administration. That message has been muffled at different times during the campaign, but in New Hampshire, she returned to it with apparent success.

The National Election Pool exit poll in New Hampshire showed Clinton winning among voters who cited the economy as the biggest issue. Obama won among those who said Iraq was most important, and they were essentially tied among those who named health care.

Clinton also won the empathy vote in New Hampshire -- decisively over Obama. Among those voters who said finding a candidate who "cares about people like me" was important, Clinton beat Obama 41 percent to 19 percent. John Edwards was the choice of 37 percent.

Granted, just one in six New Hampshire voters said they made their decision on that basis. More than half said bringing about needed change was the most important attribute in their choice, and Obama won that vote by almost 2 to 1.

Obama's change-oriented message continues to pack real punch, but neither he nor Clinton can afford not to make dealing with the economy an integral part of their messages in the days ahead.

John Edwards's populist message plays to those who feel most aggrieved by economic inequality and corporate power, but he is in a struggle to be heard over the clamorous debate between Clinton and Obama.

Clinton is closer to finding her voice on the economy than Obama, if only because it is closer to the bread-and-butter, programmatic themes she has talked about for many months.

Like Clinton, Obama has an economic plan and has held events built around the subprime mortgage crisis. But he has yet to weave the economy into his stump speech as effectively as he may need to do going forward, and he may have a more difficult time doing so.

Among Republicans, the challenges are perhaps greater. They may have to reorient their messages to take into account the growing concern about the economy, beginning in Michigan over the next six days.

When GOP candidates debated in Michigan last fall, Fred Thompson got an opening question about the state of the economy and flubbed by offering an upbeat appraisal of the overall economy instead of tailoring his response to one of the states hardest hit by economic dislocation.

When he arrived in Michigan on Wednesday, John McCain spoke directly to those problems, with a pledge to help workers whose jobs have disappeared through globalization. But economic issues have never captured McCain's interest. He is first and foremost a national security candidate.

Most Republican candidates offer Republican orthodoxy: tax cuts, smaller government, market-driven health-care plans and free trade, a set of policies that has traditionally played well with the GOP. But many strategists question whether that is an ideal general election message at a time of economic anxiety.

Mike Huckabee is the only Republican to date with an economic message that is not largely orthodox Republican. His is a more populist appeal to his party not to ignore the plight of working-class Americans or the income inequality that exists in the country today. Huckabee also is almost alone in raising doubts about the effectiveness of free trade.

For candidates in both campaigns, economic issues are likely to become front-and-center as they scramble for advantage.

By Web Politics Editor  |  January 10, 2008; 2:12 PM ET
Categories:  Dan Balz's Take  
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