The Most Important Number In Politics

With apologies to Chris Cillizza, the most important number in politics, one that may well help determine the fate of major health care legislation this year, will be released by the Department of Labor on July 31. It's the first estimate of economic growth during the second three months of the year. Administration officials are crossing their fingers and hoping that it will be interpreted as a sign that the economy is turning around. It's hard to determine what constitutes a "good" number, since demand almost certainly declined in the second quarter. But the if the rate of decline dropped off sharply, economists will up their confidence levels that the economy, right now as I type, early in the third quarter, has begun to grow again.

The chain of logic goes like this: when the House and Senate conference report on health care hits the floor in September, a large number of wavering members will think prospectively about the state of politics in November 2010. If I vote for this bill, they'll say to themselves, will I be punished? Less prosaically: this is Obama's health care bill. Will Obama be popular enough by November of 2010 in my district (or state?)

This seems on first glance to be a rational calculation. But it's not. The members will use the information available to them at the time to project the future. (Potentially perilous: if the late September revised GDP estimate for the second quarter is worse than the July projections.)  They'll take account of the unemployment rate and the trend lines, to be sure, but the administration has done a fairly solid job of keeping expectations for a 2009 turnaround in check.  

One reason why Republican arguments against health care reform and on the deficit have gained traction is that the administration's counterargument on the economy is weak. Undeniably, it's valid --  we'd be in a second Great Depression if not for the intervention -- but until there's a better number to cite, all the administration can really say is "hang in there."  That's allowed Republicans to back away from the open hand extended by Sen. Max Baucus.

What will bolster the confidence of Democrats? A hard datum. If the first estimate of Q2 GDP is "good" -- and good here means either positive or only very slightly negative -- Democrats in Congress will undoubtedly deploy the availability bias: the one piece of hard evidence they have to support their future projections about the economy will be a sign that the economy is turning around.

In the grander schemes of political thought, the unemployment numbers are much more important than GDP and much easier to actualize. The administration suffered a fairly tough punch when it turned out that the rate of unemployment increases sped up in June -- an artifact, to be sure, of many factors beyond the White House's control, but a sudden curve of the trend line in the zero sum politics game.

If the numbers had been reversed -- if June was better than May, then Democrats would feel more confident about their prospective assessment of the future, and therefore feel more confident about the health reform process.

Another problem for the Democrats: it didn't help that everyone, White House included, jumped onto the bandwagon when Fed chair Ben Bernanke thought he saw "green shoots". You won't be hearing much positive rhetoric from the administration for a while...