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For campaigns, calculating what counts as ‘better off’

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CHARLOTTE, N.C. » When Ronald Reagan asked voters a week before the 1980 election whether they were better off than four years earlier, he turned a race that had been nip-and-tuck for months into a landslide victory — and showed how a pointed question can be a lethal political weapon.

Mitt Romney, the Republican presidential nominee, speaks often of that election in meetings with donors and other supporters, citing it to reassure those who are alarmed that he has not been able to build a lead against a president burdened with a listless economy, ballooning federal debt and a jobless rate deep in the red zone for an incumbent.

But if Romney believes the "Are you better off?" question will be political kryptonite for President Barack Obama, he will have to reckon with an economic scorecard that is more mixed than he and other Republicans are claiming on the campaign trail. U.S. voters, too, have more complicated feelings about their fortunes, and those of their children, than they did when Reagan first posed the question.

"People are not better off than they were four years ago, in the sense of where the economy is today compared to where it was," said Kenneth S. Rogoff, a professor of economics at Harvard, ticking off statistics from the unemployment rate to housing prices. "But certainly, things could have been a lot worse. You can decide whether the glass is half-empty or half-full."

The half-full argument, which the Obama campaign will promote at the Democratic convention here this week, holds that the economy is far stronger than it was at the depths of the recession in early 2009 when it was bleeding 800,000 jobs a month. Tepid though it may be, the pace of this recovery is on a par with the aftermath of other post-World War II financial crises, like those in Asia and Latin America.

In July, the United States added 163,000 jobs. The economy, which contracted 6.7 percent in the first quarter of 2009, expanded 1.7 percent in the second quarter of this year. Stocks rose too: The Wilshire 5000 market index rebounded from 9,087 points in January 2009 to 14,258 points last month.

"We avoided falling into the abyss, and it was an open question whether we would," said Lawrence H. Summers, who was Obama’s chief economic adviser until the end of 2010. "It may not be easy to explain, but it’s right. It’s the truth."

Voters seem squarely on the half-empty side. Only 20 percent of those surveyed think their financial circumstances are better now than four years ago, while 39 percent think they are worse off, according to a CBS News poll conducted in August. That is just as pessimistic as during the financial meltdown a month before the 2008 election.

Moreover, 47 percent of those polled in April by The and CBS News think things are likely to get worse rather than better for the next generation of Americans, while only 24 percent think things will improve. That is also worse than when Obama took office, when 32 percent said the future would be worse.

But, as pollsters note, Americans have consistently expressed pessimism about the future, regardless of whether a Democrat or a Republican was in office. In three decades of polling by The Times and CBS News, only during the last year of Bill Clinton’s presidency did a solid plurality — 44 percent — voice optimism about the next generation.

Even in the final year of Reagan’s presidency, in July 1988, 59 percent of people said the future would be "bogged down" by troubles rather than brighter.

Those numbers belie Romney’s claim, in his acceptance speech in Tampa, Fla., that "for the first time, the majority of Americans now doubt that our children will have a better future." They also offer Obama a line of counterattack.

The enduring pessimism, Obama’s advisers say, reflects a deeper sense of grievance on the part of the middle class, which has seen incomes stagnate since the 1970s, even during times of prosperity. The campaign hopes to exploit those feelings by presenting Obama as a great defender of the middle class against the predatory policies of Republicans.

In this way, they say, he may be able to detach himself from the current economic cycle — and place himself in the broader current of economic change in America.

"Middle-class insecurity didn’t start with the recession," said David Plouffe, a senior strategist to the president. "The question is, who do you trust to build the kind of economy that’s going to give the middle class security? That’s the central mission of our presidency."

From taxes and the health care law to education reform and investments in high-technology manufacturing, Plouffe said, the Obama campaign will lay out the case that its policies will help the middle class while Romney’s will harm it.

Stanley Greenberg, a pollster who helped develop Clinton’s "It’s the economy, stupid" campaign in 1992, said, "People want to know the plan," adding that Obama has "to talk about moving America to a place where the middle class can prosper."

But analysts say Obama must be careful about how he talks about investments, because voters understand that the federal government is broke and are therefore wary of promises.

"If you stand up and say, ‘Here are all the things we’re going to spend money on,’ you risk getting yourself into a big argument you don’t want to have," said Jared Bernstein, former economic adviser to Vice President Joe Biden.

For all the talk about the future, Obama cannot avoid the past four years. Some analysts said he should defend the health care law and the Dodd-Frank financial regulations, but in the context of laying the groundwork for future growth. He should also point out that the United States is one of the fastest-growing economy in the developed world, even at its sluggish pace.

"Yes, it’s slower than a get-rich-quick scheme," said Austan Goolsbee, a former economic adviser to Obama. But as recent bubbles and meltdowns have shown, Goolsbee said, "get-rich-quick schemes didn’t work."

This year is different from 1980 in an important respect. When Reagan asked voters whether they were better off, he listed four yardsticks: inflation, employment, America’s standing in the world and their sense of security. In all of these areas, Plouffe said, "everything seemed to be off the rails."

This time, inflation is virtually nonexistent, and Obama has compiled a solid record in foreign policy and in national security.

Still, some experts said Obama should not underestimate the political salience of "Are you better off?" this year.

David Gergen, a political analyst and former presidential adviser, recalls how he and Richard Wirthlin, a Republican pollster, came up with the question while preparing Reagan for his debate with President Jimmy Carter.

Part of its appeal, Gergen said, was that Reagan was good at asking questions, especially ones he knew the answer to. The question, he said, also distilled "a sentiment that was there among voters but had not come together in a coherent way."

"‘Are you better off now than four years ago?’ remains potent," Gergen said. "It may not be as compelling as it was then. But a campaign based on a feeling of people’s resignation is not a winning campaign either."

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