Election 2014  
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Why Are Romney and Obama Tied?

Americans need jobs, higher wages, and refinancing on their homes. And a president who can deliver.

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If you want to understand why the presidential race is basically tied, take a good look at Friday's report from the Commerce Department on the state of the economy. The headline is not too bad from President Obama's point of view. The economy grew at the rate of 2 percent in the third quarter, up a bit from the 1.3 percent in the second quarter.

But look below the headlines and it's a dismal story for the middle class families to which both candidates are appealing.

Nearly a third of the growth came from a one-time spike in military spending that is not likely to be repeated.

Much of the uptick resulted from increased household borrowing, not from an increase in consumer incomes.

Business investment was basically flat.

Exports were down slightly.

Shrinking state and local spending continued to be a drag on the recovery.

The only good news was that the housing collapse has apparently bottomed out, and home-buying and home construction are both increasing.

But this is not a strong enough recovery to either raise wages, create the 10 million jobs that the economy needs, or increase living standards. In fact, it is the weakest recovery of all the postwar recessions, especially measured against the depth of the collapse.

There have been 13 quarters -- just over four years -- since the official end of the recession. At this point in the typical postwar recovery, total growth had averaged 16.8 percent -- 4 percent a year. In the current recovery, total expansion has been just 7.2 percent -- under 2 percent per year.

The improbable hero of the story is that radical, Ben Bernanke. By keeping interest rates rock bottom, the Fed Chairman at least assures that for those consumers and businesses who can get credit, it is dirt cheap. This puts more purchasing power in consumers' pockets.

But the homeowners who most need refinancing can't get it, because their homes are still underwater. And as the lousy business investment numbers demonstrate, too few businesses see reasons to expand (and by the way, tax cuts for small businesses won't solve that problem any more than low interest rates do -- businesses need to see customers with money to spend before they will expand.)

And as Bernanke is the first to point out, cheap money by itself can't solve the problem. That takes fiscal policy. And though he dares not say it out loud, he doesn't mean less government spending, he means more.

Bernanke has been courted by the deficit hawks to insist on the kind of deal that his predecessor Alan Greenspan imposed on Bill Clinton -- lower interest rates in exchange for deficit reduction. But Bernanke is a good enough economist to appreciate that in a serious slump we need both monetary and fiscal stimulus. He is conspicuously absent from the ranks of those elites promoting budget cuts. But I digress.

The long term source of all this misery is of course right-wing economic policies. But by failing to clean out and restructure the financial system, and to at least fight for much stronger recovery measures despite Republican obstruction, our president has given his opponent an opening to make the continuing slump Obama's fault.

All of which explains the following apparent paradox: Mitt Romney can have a dismal convention, a series of gaffes, the contempt of much of his own party's base, as well as the highest disapproval rating of any recent major party nominee -- and still fight Obama to a draw based on one better-than-expected debate performance.