I think most sophisticated Obama supporters and administration officials would agree with each of these statements, but few besides Matthew Yglesias seem to understand their combined implications. The economy drives American politics, and it’s stuck in a ditch. Absent a macroeconomic miracle, the Fed is Democrats’ best hope for getting the recovery moving, and their only direct leverage is Obama’s appointment power. So why does no one care that Peter Diamond’s Fed nomination was blocked yesterday? As bizarre as it sounds, there is no bigger issue in American politics right now in terms of the potential effects on future electoral outcomes.

This originally appeared at Brendan Nyhan’s blog

As Jamison Foser points out at Media Matters, Barnes published an op-ed in the Wall Street Journal yesterday that repeatedly suggests the key to Obama’s re-election is cutting spending:

If Mr. Obama wants to avert a fiscal crisis and win re-election in 2012, he needs House Speaker Nancy Pelosi to be removed from her powerful post. A GOP takeover may be the only way…

Over the past 50 years, it should be no surprise which president has the best record for holding down discretionary spending. It was President Reagan. But who was second best? President Clinton, a Democrat. His record of frugality was better than Presidents Nixon, Ford and both Bushes. Mr. Clinton couldn’t have done it if Republicans hadn’t won the House and Senate in the 1994 election. They insisted on substantial cuts, he went along and then whistled his way to an easy re-election in 1996…

Mr. Obama’s re-election to a second term is heavily dependent on his ability to deal effectively with the fiscal mess.

The suggestion that Clinton had “an easy re-election” due to spending restraint is implausible. Here’s a plot of changes in non-defense discretionary spending (Barnes’s preferred metric) for recent first-term presidents (see methodological notes below for details):

The relationship between spending restraint and vote share is entirely driven by Reagan’s 1984 landslide (an outlier on both dimensions). When it is excluded, there is no relationship between the variables.

By contrast, the relationship between economic growth and presidential vote share is extremely strong and robust to the exclusion of any single president. Here, for example, is the same set of presidents with their vote share plotted against the Douglas Hibbs measure of weighted per-capita growth in disposable personal income (drawn from his Bread and Peace model):

As I’ve previously noted, Clinton’s move toward the center (which included an emphasis on deficit reduction) may have helped somewhat to boost his margin above what we would have otherwise expected, but the driving force in 1996 (as in every election) was the state of the economy.

Similarly, it’s hard to imagine Reagan being re-elected based on his record of spending restraint if the economy was in the tank. The fiscal year 1982 budget cut non-defense discretionary spending substantially, but it wasn’t enough to protect Reagan during the recession of 1981-1982, which pushed Reagan’s approval numbers down to 35% by January 1983. Once the economy bounced back, however, approval rebounded in time for him to crush Mondale in 1984.

Barnes may wish that presidents were re-elected based on spending restraint, but that’s just not the world we live in. Obama’s fortunes will rise or fall depending on the state of the economy.

[Methodological notes: Spending levels are drawn from the historical tables for the FY2010 budget and are in constant dollars (Table 8.2). I compare spending in the fiscal year beginning before the president takes office (e.g. fiscal year 1969 for Nixon) to the fiscal year that ends just before the president is up for re-election (e.g. fiscal year 1972 for Nixon). I start with fiscal year 1974 for Ford (since he took office in August of that year) and end with fiscal year 1976 (excluding the transition quarter in 1976).]

Things have changed, however. In a column for Roll Call, Stuart Rothenberg flags a new NBC/WSJ poll suggesting that the Democratic brand has lost most of its advantage relative to the GOP.

Unfortunately for Democrats, their own brand has fallen like a rock.

In April, almost a year ago, the Hart/McInturff poll found 45 percent of Americans with a positive view of the Democratic Party and 34 percent with a negative view. In the most recent Hart/McInturff survey, the Democratic Party’s positives have sunk to 37 percent and its negatives have risen to 43 percent. Yes, those numbers are slightly better than the GOP’s (31 percent positive/43 percent negative), but not enough to help Democrats in the fall.

Here’s how the net positive numbers (pecent positive minus percent negative) for Democrats and Republicans have changed over the course of Obama’s presidency:

Perceptions of the GOP have only improved a bit, but the negative press and opposition party criticism faced by Democrats have apparently taken their toll. Since my original post in October, the difference in net positive numbers between the parties has closed from 27 points to 6 — a decline that coincides with the most intense stage of the health care reform debate.

As a result of this change, the difference between the major party brands no longer appears to be unusual for this stage in the midterm election cycle (polls in the chart were the closest available):

I interpret this shift as reflecting the underlying fundamentals of the election cycle, which favors the GOP (a Republican takeover of the House is a realistic possibility). The question now is whether the Republicans will continue to gain ground. In 1994, the GOP opened up a major lead in perceptions of the party relative to Democrats between June and October:

I still don’t expect a 1994-style landslide in November, but it seems clear that the Democratic brand advantage that might have helped prevent such an outcome has evaporated.

Will reporters let the president continue this strategy in the second half of his term, especially when it comes to war with Iraq? The evidence isn’t reassuring.

So far, Bush has been protected by his reputation for honesty, the media’s distaste for complex policy issues and — since Sept. 11 — his status as a wartime president. As a result, the administration has gotten a pass when it has used deceptive, even dishonest arguments to sell key pieces of its agenda, most notably the tax cut and Bush’s plan to create private Social Security accounts. And even when serious questions about its arguments have been raised, the White House has dissembled wildly rather than admit mistakes or mendacity.

Take Bush’s false claim to have publicly listed three exceptions during the campaign under which budget deficits would be acceptable. As revenues declined last year and deficits appeared imminent, the president claimed the following to try to protect himself from criticism: “As I said in Chicago during the campaign, when asked about should the government ever deficit spend, I said only under these circumstances should government deficit spend: if there is a national emergency, if there is a recession, or if there’s a war.”

Bush repeated this at least 11 separate times (and told his “trifecta” joke based on it even more often). Yet there is no record of Bush ever saying what he claims during the campaign in Chicago or anywhere else, as Jonathan Chait first reported in the New Republic. After much investigation, it was discovered that Vice President Al Gore listed the exceptions during the campaign, not Bush. A Bush advisor did indicate at the time that he also supported them, but the White House has not produced any evidence to substantiate Bush’s Chicago story despite numerous requests from the press. The administration’s only substantive response was to direct a Washington Post reporter to two GOP primary debates and a post-election appearance by Bush, none of which support the claim.

Then, in July, the Office of Management and Budget issued a press release that severely underestimated the percentage decline in the 10-year federal budget surplus caused by the Bush tax cut (apparently an inadvertent error). Rather than admit its mistake publicly, OMB deleted the error and posted an altered version of the release (Adobe PDF file) on its Web site with no indication that it had been changed. After my initial report on this was picked up by New York Times columnist Paul Krugman, OMB was finally forced to add a disclosure to the release.

Now, with matters far more grave at stake in the debate over Iraq, the administration has been no less brazen in its dishonesty. At a Sept. 7 appearance with British Prime Minister Tony Blair, Bush said, “I would remind you that when the inspectors first went into Iraq and were denied — finally denied access, a report came out of the Atomic — the IAEA [International Atomic Energy Agency], that they were six months away from developing a [nuclear] weapon. I don’t know what more evidence we need.”

An IAEA report in 1998 (around the time that inspectors were “finally denied access”) did say Iraq was six to 24 months away from developing a weapon before the Gulf War in 1991, but its efforts to produce weapons-grade uranium were largely crippled by the war and subsequent inspection regime. It appears Bush was referring to that estimate to underscore the point that Iraq has already come close to developing nuclear weapons and will try to do so again.

However, he should have been clearer about when that capacity was discovered. By tying the pre-Gulf War estimate to when inspectors were “finally denied access,” Bush appears to imply that IAEA’s conclusion that Iraq was “six months away from developing a weapon” dated from 1998, rather than 1991. The IAEA summary of the report he is referring to in fact stated that as of 1998 it “has found no indication of Iraq having achieved its program goal of producing nuclear weapons or of Iraq having retained a physical capability for the production of weapon-useable nuclear material or having clandestinely obtained such material.”

Rather than clarifying the point appropriately, Bush spokesperson Scott McClellan claimed the president was referring to an IAEA report published in 1991 (the organization says it did not issue such a report that year) and pointed a Washington Times reporter to two newspaper stories that do not corroborate Bush’s claim.

The White House shifted gears several weeks later, telling a Washington Post reporter that Bush was “imprecise” and that his statement was based on U.S. intelligence. Then, just two days after that story was published, press secretary Ari Fleischer tried a third approach, claiming that “it was in fact the International Institute for Strategic Studies that issued the report concluding that Iraq could develop nuclear weapons in as few as six months.”

But the IISS report Fleischer finally settled on as the president’s source was actually released on Sept. 9, 2002, two days after Bush’s original statement and years after inspectors were “finally denied access.” And if the president was briefed about the report in advance, he would have been told that it does not mention any such six-month estimate. An IISS summary does state that Iraq “could … assemble nuclear weapons within months if fissile material from foreign sources were obtained,” but this conditional assessment of the situation today was certainly not the basis for Bush’s claims in his press conference with Blair.

Nonetheless, Fleischer attacked the Post with righteous indignation. “The source may be different, but the underlying fact remains the same, despite the story’s declaration of the president’s argument, once again, as ‘dubious, if not wrong,’” he wrote. “It is The Post’s reporting that is dubious, if not wrong.”

This dissembling is a betrayal of Bush’s promise to restore honor and dignity to the White House. With so much at stake domestically and abroad, it’s time to hold the president and his administration to a higher standard of truth.

Much later in the story, he clarifies that “the Senate Majority Leader’s press office was contacted, NION’s statement and Daschle’s listing as a co-signer was explained, and a request for verification of the validity of Daschle’s support for the group’s statement and goals was requested. A press staffer, however, would neither confirm nor deny Daschle’s involvement with the petition or the group.” Of course, a cursory glance at the Not in Our Name Web site shows that anyone can add any name to the online version of the petition. As James Taranto has pointed out in the Wall Street Journal’s online Best of the Web column, the petition has been signed in recent days by such distinguished citizens as Ben Dover, Youcommies Are Nuts, Weldon M. Rumproast and Al Koholic.

But instead of securing official confirmation before publishing the story, Rosenberg rushed it into print and then e-mailed Limbaugh, who quickly read the article on the air in his typically irresponsible fashion. “Did Daschle actually put his name to this group’s petition, or did they put it there without his knowledge?  We’ll go on the if basis.” The host then quickly segued from admitting that Daschle might not have actually signed the petition to speculative attacks on one of his favorite targets, imitating Daschle supposedly playing to Hollywood leftists while he supports Bush. “‘We’ve always been supporting the president. Oh yeah, can’t wait to start dropping those bombs on ol’ Saddam. In fact, I want to fly the first B-1 that flies over there and drops those bombs,’ says Tom Daschle. ‘I want to be the guy that sends the first laser-guided bomb into Palace 3.’ Then he’s telling the Ed Asners and the Tom Haydens and the Jane Fondas of the world, ‘I’m right in there with you. I think this is horrible. Not in my name, Tom Daschle.’ So if this proves out, if it’s true, then it’s exactly what we said today is going on. They’re trying to satisfy the split in their party. ‘Don’t put my name in the ad though, OK. Just put it on the Web site. Nobody will see it there. But leave it off the news — I’d be concerned, Tim [Russert, host of NBC's "Meet the Press"], if my name was on that ad in the New York Times. It would be outrageous. Outrageous.’ We’ll wait for further confirmation on this.”

Daschle’s press office then put out an official statement Thursday afternoon denying that the senator had ever signed the petition. That evening, Fox News reported that the whole thing was a hoax. Rosenberg was forced to retreat the next day, though he buried his admission that Daschle had denied the report in an attack on Daschle’s work in Congress for former Sen. Jim Abourezk, D-S.D. In a separate report for World, Rosenberg admitted that Daschle’s office had denied the charge within four hours of his first call, showing just how quickly the first story was rushed out. Evidently he learned all too well from his former boss.