Auto Bailout, Energy Loom Over Election in Rust Belt

Blue-collar workers in industrial states could determine the outcome of the election.

Tuesday’s presidential election in the United States may well be decided in the northeastern “Rust Belt” states of Iowa, Pennsylvania, Ohio, Wisconsin and the demographically comparable state of New Hampshire. Together, these states account for 58 electoral votes in the election, more than enough to tip the balance in either candidate’s favor.

Incumbent president Barack Obama has almost consistently polled ahead of his Republican challenger Mitt Romney in all five states but the latter cannot win the election without carrying either Pennsylvania, Ohio or two of the three remaining northeastern swing states. That is, assuming he wins in Colorado, Florida, North Carolina and Virginia which seems likely.

The president leads the former Massachusetts governor in terms of favorability and job approval in all five states. Even if they have been among the hardest hit in the recession, his handling of the economy is also appraised fairly well by Rust Belt voters. Obama won all five states with significant leads over his rival John McCain in 2008.

The last time Iowa and Ohio voted for a Republican was in 2004. George W. Bush didn’t win New Hampshire that year but did in 2000. The last time Pennsylvania voted for a Republican was in 1998. The last time Wisconsin did was in 1984 when all states but Minnesota reelected President Ronald Reagan. Republicans believe that they have a chance of winning the state this year as Wisconsin congressman Paul Ryan was added to their presidential ticket as Mitt Romney’s running mate in August.

The critical constituencies in all five states is composed of white working-class men and middle-class women. In the 2008 Democratic Party primary, Hillary Clinton polled far better among blue-collar voters in states like Pennsylvania and Ohio than Obama. In the general election, nationwide, he carried college educated whites, women, first time voters and racial minorities by landslides but lost the white working class by eighteen points to John McCain.

A Pew Research Center poll conducted last year found that 43 percent of the white working class didn’t believe that it would be better off in ten years’ time. It was the most negative view of any of the groups polled and explains why, in the 2010 midterm election, blue-collar voters went 63 percent Republicans. It helped the party win House and Senate seats as well as governorships across the northeast, including in Illinois, Iowa, Michigan, New Hampshire, Pennsylvania, Ohio and Wisconsin.

Even if the unemployment rate in all five northeastern battleground ground states has since come down to below the national average, Republicans aim to replicate the success of 2010 by arguing that the president is holding the recovery back.

Like the president, Romney is highly critical of Chinese monetary and trade policies, arguing that they are to blame for the disappearance of manufacturing jobs in the states that were once the industrial backbone of America, even if, as a former businessman, he will probably be less hostile to free trade as president than his rhetoric suggests.

One industry that promises to replace the jobs that were lost in manufacturing is energy, shale gas in particular. In the last four years, up to 600,000 jobs were added as a result of the shale gas revolution. In the Rust Belt states, where the coal workforce has shrunk by 90 percent in the last forty years, working-class unemployment can be reduced as a consequence.

Beyond employment in the energy sector, lower electricity prices as a result of cheap natural gas create opportunities in the chemical industries. The Wall Street Journal reported in October that the United States are now among “the most profitable places in the world to make chemicals and fertilizer, industries that use gas as both a feedstock and an energy source. And they have slashed costs for makers of energy intensive products such as aluminum, steel and glass.”

Mitt Romney’s plan for North American energy independence by 2020, which includes expanding drilling for oil and natural gas in the United States, stands in contrast to the president’s policies which have been more hostile to domestic energy production. Obama imposed fuel efficiency standards which increase the price of gasoline while his Environmental Protection Agency has been reluctant to issue permits for shale oil and gas exploration. The president also blocked construction of an oil pipeline from Canada to Houston, Texas, to the delight of his environmental base but angering labor union supporters.

The power of organized labor, particularly in Ohio and Wisconsin, nonetheless helps explain why working-class voters in these states are more likely to vote for Democrats than in most of the rest of the country. They help finance the Democratic Party’s election campaigns and get out the vote on election day. Indeed, the president already has the advantage in early voting in Ohio, although by a slimmer margin than he did in 2008.

Also working in Obama’s favor in the northeast is the belief that Mitt Romney opposed the 2008 bailouts that saved two American carmakers from bankruptcy and preserved tens of thousands of manufacturing jobs.

Although the Republican didn’t write the words “Let Detroit go bankrupt,” which was the title The New York Times gave to an opinion article he authored that year, and although his proposed policy was actually very similar to what the president ultimately did, the belief that he opposed the rescue of Chrysler and General Motors is widespread and confirms many voters’ suspicions of him as an “out-of-touch” millionaire who will do little to improve the economic prospects of the common man.

Democrats, of course, have gladly exploited Romney’s image problem with television commercials in which were shown the plants that he closed and the workers that he fired when he was chairman and chief executive of the Bain Capital investment firm.

The Michigan native, whose father was president of the American Motors Corporation for eight years, allayed the concerns of some voters in his first televised debate with Barack Obama in which he was seen as far more persuasive on economic and fiscal policy. Whether it was persuasive enough for him to carry at least two states in the northeast remains to be seen.

In preelection polls, the candidates were neck and neck in all five northeastern battleground states although the president had the advantage in most surveys.