By Matt McDonald, (202) 822-1205, mmcdonald@hamiltonps.com

What if there is no economic recovery before the election?ᅠ At the beginning of this year, the consensus view was that the economy was bad, but that it would be getting better “next quarter.”ᅠ The better next quarter never came, and now the economic projections have been adjusted for the worse.ᅠ The consensus now is that the economy won’t get better next year at all, and we are probably looking at a significant recovery only in 2013.

This view is reflected in the Federal Reserve’s unprecedented policy of keeping low interest rates in place for the next two years, and it has been reflected in recent private sector economic revisions.ᅠ J.P. Morgan is now projecting an unemployment rate of 9.5 percent in the fourth quarter of 2012; Goldman Sachs is projecting unemployment of 9.25 percent.ᅠ Both of these estimates are up from the current rate of 9.1 percent. ᅠJust today, the Office of Management and Budget released its Mid-Session Review, with official estimates at 9 percent unemployment in 2012. This is consistent, albeit slightly rosier than private-sector projections.

At the same time that economic projections have been collapsing, so too have the President’s job approval ratings.ᅠ The Real Clear Politics average has the President’s approval rating at just 43 percent, with the Gallup tracker at 38 percent, the bottom of the range of polls.

The benchmark of job creation for the President to gain some momentum has been getting tougher as well.ᅠ To get below 8% by Election Day would require 272,000 jobs per month going forward.ᅠ This is up again since last month. To reach a more modest 8.5 percent unemployment rate by Election Day 2012 would require the creation of 220,000 jobs on a monthly basis.

We outlined previously that in a tough economic environment, the likely strategy for the President’s reelection campaign is to define his eventual opponent as unacceptable and frame the election as a choice.ᅠ Despite continued and recent references to Reagan’s success in 1984 with 7.2 percent unemployment, we are not going to see a “Morning in America” campaign, because voters won’t believe it in current conditions.ᅠ This is going to be a traditional negative campaign, the beginnings of which we have already seen, both in a strategy of blaming a “do-nothing” Congress and in the early framing of likely general election opponents.

The interesting thing is that the economic forecast has now become bad enough that even a negative strategy may be ineffective.ᅠ In 2008, Ben Smith wrote up an item from a GOP consultant.ᅠ The source detailed how a focus group he conducted believed every negative thing they heard about then-Senator Obama, and that they were going to vote for him anyway.

The danger for Obama 2012 now is the same as their advantage in 2008.ᅠ By Election Day 2012 if the economy has been bad for all four years of the Obama presidency, voters may not care what he has to say about his opponent.ᅠ Or worse, they’ll believe it all and vote the President out anyway.

Matt McDonald is a partner at Hamilton Place Strategies and a veteran of two Presidential campaigns and the White House.ᅠ Prior to joining HPS, Matt worked for McKinsey and Company. ᅠHe holds an MBA from MIT’s Sloan School of Management and an undergraduate degree in economics from Dartmouth College.