The Economic Time Machine

ECONOMY

Most swing state economies faring better than U.S.

 

By the numbers, no swing state is better off economically than it was four years ago. But many see stronger recoveries than the U.S. How will that affect the presidential election?

dhanks@MiamiHerald.com

Still, Lewis’ commercial business has been having a strong year thanks to its contracts in the energy field. Lewis Construction managed to land contracts tied to Wisconsin’s growing “fracking” industry — which extracts oil and natural gas from rock. It’s a practice largely opposed by the Obama administration, and one that Romney is pressing as part of his broader agenda to lower energy costs and grow employment by pursuing more oil production in the United States.

The swing states of Colorado and Ohio also sit in the fracking belt, but Pennsylvania is getting the biggest boost from the relatively new industry, said Tom Jackson, an economist at IHS Global Insight.

“It’s really provided a boost to a lot of industries,’’ Jackson said of fracking in the Keystone State. “The steel industry has been building a lot of the equipment, but there is also a lot of technical and professional help you wouldn’t think of. Like land title issues, and legal help on mining rights.”

For Virginia, it’s not fracking but the federal bureaucracy that helped insulate that swing state from the recession. Much of Washington spills over into Northern Virginia, which is home to the Pentagon, the world’s largest government office building. A surge in federal spending during the Obama administration has been a help to the state. While Virginia’s overall employment is down less than 1 percent since Election Day 2008, the number of federal workers in the state has climbed 9 percent.

Military helps, too, in Virginia, home to the massive Norfolk naval base in the region where Tom Sarach operates his Reliance Staffing. Sarach said his increased sales haven’t come from government contractors but a broad base of industries in the private sector — particularly manufacturing. “It’s been a slow upward tick,’’ he said, recalling the dark days in early 2009 when his contracts dropped by nearly 50 percent.

While business is back up, Sarach said he still sees a wounded economy in Virginia. Businesses have been confident enough to request more temporary workers from Reliance but few become permanent hires. One reason Sarach cites: uncertainty over how the Obama administration’s healthcare law will impact staffing costs.

“A lot is on hold right now,’’ he said. “Until [Washington] writes the final regulations, there’s no way for us to sit down and do calculations on it. We’ve done some preliminary work, and it’s not pretty.”

The gap between polls and economic performance shows the complex factors both candidates face as they try to pull a swing state into their column. Demographics and social issues can overcome economic issues, as can the way voters perceive a downturn or a recovery.

Even with pollsters confident the economy remains the top issue for most voters, economics don’t determine politics.

North Dakota has the lowest unemployment rate in the nation, 2.9 percent, but Obama has virtually no chance of winning that conservative state. California’s 10.7 percent jobless rate — the third-highest in the country — still hasn’t presented Republicans with a chance of competing in the country’s largest state on the presidential level.

But for close contests, analysts see perceptions of the economy playing a large role in swaying the independent voters that will make the difference in November. But even a relatively strong rebound doesn’t mean a lock for Obama.

“The question is, in states that are doing well, who do voters credit?’’ said Quinnipiac University pollster Peter Brown. He pointed to Ohio’s healthy rebound, with unemployment lower than it was on Election Day 2008 and a full point under the national average. “Do you credit Barack Obama or do you credit John Kasich?” Brown asked, referring to the state’s Republican governor.

The question can be a dicey one for the Romney campaign as it balances criticizing the Obama economy without offending hometown Republican governors touting the rebounds underway in their states. At a Romney rally in St. Augustine, Fla., this week, Florida Gov. Rick Scott had encouraging words for the Sunshine State’s rebound, where unemployment is dropping faster than almost every state in the country.

“Even though we have a president that is making it much, much more difficult to do well, in Florida our economy is getting better,” Scott said, according to the Associated Press. “Just think what the state could do then if we had the right president.”

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