According to the United States Federal Reserve, Americans' net worth has fallen 40 percent since 2007, returning to its 1992 level. Progress toward recovery will be slow and difficult, and the U.S. economy will be weak throughout the runup to November's presidential and congressional elections. Can any incumbent — and especially President Barack Obama — win re-election in such conditions?
To be sure, the blame for America's malaise lies squarely with Obama's predecessors: Bill Clinton, for encouraging the Fed to take its eye off financial-market supervision and regulation, and George W. Bush, for his costly wars, which added massively to U.S. government debt. But, come Election Day, many (if not most) Americans are likely to ignore recent history and vote against the incumbent.
Given this, it would not be surprising if Obama and others in his administration were seeking noneconomic issues to energize his campaign. National-security problems in general, and the challenge posed by China in particular, may be shaping up as just such issues.