Will an East Coast Strike Derail Obama's Re-election Bid?

 Historically, followers of presidential campaigns have looked for an “October Surprise” – a news event with the potential to change the course of the election.  Over the past few decades, the “October Surprises” have included a false announcement of the Vietnam War winding down by then-President Johnson during the 1968 Humphrey-Nixon-Wallace contest; Henry Kissinger’s announcement that a Vietnam peace was “at hand” just before the 1972 Nixon-McGovern election; the 1992 (Bush-Clinton) breaking of the Iran-Contra affair; and the release of George W. Bush’s drunken driving arrest just before the 2000 Bush-Gore election.

But sometimes, the ‘surprise’ comes from elsewhere…such as when Iran announced that they would not release the American Embassy hostages just before the 1980 Carter-Reagan election.  And that could well be the case this year.

Yes, Mitt Romney might release his Tax Returns (or they may be released to media sources by hackers claiming to have obtained them).  

Or perhaps Benjamin Netanyahu will decide to launch a surgical strike against Iran’s nuclear complex, forcing President Obama into the position of taking a hawk-like military stance (which will disappoint progressives, but not be good enough for Neo-con Republicans).

Or maybe it will come in the form of a looming longshoremen’s strike that has somehow evaded news reports, but which could shut down 14 ports and 95% of all shipping traffic on the east coast.

On September 30, the employment contract between the U.S Maritime Alliance (representing container carriers and port operators) and the  International Longshoremen’s Association expires.  Talks for a new contract broke down on Aug. 22 over wages and benefits, with no clear path to agreement in view. The union had requested a "last best offer” from Management, and the Alliance Management refused.  The union said last week that it was now “making preparations” for a possible strike on Oct. 1.

At the urging of the Retail Industry Leaders Association and the National Retail Federation, President Obama has ordered mediators to reopen talks between the groups.  The breakdown in talks comes in the midst of a concerted effort by Philadelphia area port operators, in an alliance with Del Monte Brands, to transfer dock operations away from ILA workers and towards lower-paid laborers.   

“Many companies are making contingency plans, but clearly even the best plans will be problematic in the event of a full- scale shutdown at East and Gulf Coast ports,” said Peter Gatti, executive vice president of the National Industrial Transportation League this week.  “Even the potential shift of that freight will put extraordinary demands on all modes of transportation, particularly for rail.”

In 2002, U.S. West Coast ports closed for 10 days after the Pacific Maritime Association locked out members of the International Longshore and Warehouse union, who it said were intentionally slowing down work.  President George W. Bush ordered an end to the shutdown under the Taft-Hartley Act, but the short lock-out cost the U.S. economy more than $1 billion a day. 

The resolution – or not – of this situation could well be the “October surprise” for 2012.  If the President is able to secure a negotiated settlement, it will earn him political capital.

But if an agreement is not reached, it puts the President in a no-win situation: as long as the strike continues, the economy will be further depressed, and Republicans will seize on the opportunity to criticize the President and unions.  If the President steps in and orders the dockworkers back to work, he will be seen as betraying blue collar workers, unionists, and progressives.

I fully expect Obama to win re-election, based on today’s numbers and sentiments.

But if this is the “October Surprise,” all bets could be off - especially in the three critical coastal swing states of Virginia, North Carolina, and Florida...and heavily unionized states like Pennsylvania, Ohio, and Wisconsin.

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