James Pethokoukis

Politics and policy from inside Washington

Why economy may not save 2010 Democrats

Jun 15, 2010 20:41 UTC

“Hope” wasn’t just a major theme of Barack Obama’s 2008 presidential campaign. It also might be a one-word summation of the 2010 midterm campaign strategy devised by the White House and Democrats on Capitol Hill. They hope voters get more comfortable with healthcare reform. They hope voters really care about the technocratic bank bill. And, most importantly, they hope voters begin to sense some impact of a slowly recovering economy on their personal financial situation.

Oh, and they sure hope the dang hole gets plugged, of course. It’s that last one that’s really biting Democrats at the moment. Obama’s approval rating, after more than a year on the downswing, had finally turned around in April. Then came the gusher in the Gulf. The president’s numbers are now at the lowest level of his presidency. According to weekly Gallup polling, just 46 percent of Americans approve of his job performance (with 46 percent disapproving). If history is a guide, Democrats will suffer heavy losses should Obama’s low numbers persist into November.

Certainly the BP “well control incident” — as the company might put it — is playing a big role in all this. Polls consistently show a ten percentage point gap between those who think Obama is blowing it vs. those who think he’s on top of things. And the closer voters are to the spill, the more critical they are. Just take a look at these numbers from Public Policy Polling. While Louisianans are way angrier with BP than Washington by 53 percent to 29 percent, they are pretty mad at both. By 50 percent to 35 percent, they now think President George W. Bush did a better job handling Hurricane Katrina than Obama’s job responding to the oil spill. Maybe Obama’s prime-time energy speech will turn things around. We’ll see.

But the prime shaper of the 2010 political backdrop is still the economy. A growing gaggle of economists now fret that growth will decelerate in the second half of 2010. Even bullish Ben Bernanke’s Federal Reserve is looking at a Plan B should the economy slow sharply. No double-dip recession, perhaps, but not enough economic oomph to dramatically lower the unemployment rate. In fact, it may again top the 10 percent level before year end. And if it doesn’t, the reason is more likely a shrinking labor force — as measured by government statisticians — than a surge of new jobs.

And the following numbers will only add to the sense of deepening Democratic gloom. A poll for NPR looked at the state of the races in 70 competitive House districts. Just 41 percent of voters favored Dems vs. 49 percent for the GOP. In the 30 most-competitive districts currently held by Democrats, Republicans led 48 percent to 39 percent. And in the 60 Dem districts overall, Obama had just a 40 percent approval rating.

But these results may be the ones most worrisome to Obamacrats in Washington. Only 37 percent of voters in the Dem districts believed the following: “President Obama’s economic policies helped avert an even worse crisis, and are laying the foundation for our eventual economic recovery.” On the other hand, 57 percent agreed with this statement: “President Obama’s economic policies have run up a record federal deficit while failing to end the recession or slow the record pace of job losses.”

In Washington, they call that “losing the narrative.” Democrats can only hope they can somehow get it back.

COMMENT

The reasons why Dems are losing are as follows: (1) they’re supposed to be Democrats, not Republicans, (2) they seem incapable of explaining anything simply and clearly, (3) they are spineless, (4) they are clueless, and (5) they have sold out to big business.

The ONLY reason why Democratic candidates will win against a Republican opponent is because the Republicans are choosing people who are completely insane.

Posted by sharonsj | Report as abusive

How will the right deal with potential defense cuts?

Jun 15, 2010 17:42 UTC

Bruce Bartlett thinks budget deficits will create a schism among Republicans/conservatives:

At least a few Republicans are now openly suggesting significant cuts in the defense budget, raising concerns among conservatives primarily concerned about national security. I believe that ultimately national security conservatives will be forced to choose between cuts in the defense budget and tax increases to reduce deficits.

Me: I think this would be a really interesting  and important debate. To what extent should US defense strategy be focused on China (and a defense of the Taiwan Strait, I suppose) vs. hunting down terrorists and making sure they don’t have enclaves to operate (which may include some form of nation building)? It is sort of Machines (built by defense contractors) vs. Man budgetary debate. Missile defense systems and carrier battle groups vs., say,  retaining the veterans of the Iraq/Afghanistan wars. Geopolitical strategist Tom Barnett, whom I admire greatly, argues that while the US should maintain a powerful warfighting force of the sort that raced through Iraq, it will need to focus more and more on nation building in disconnected areas of the world. Both assume an active and globally engaged US defense posture  but yet have a very different perceptions of the future geopolitical landscape.

The way out of (national) debt

Jun 15, 2010 17:18 UTC

National Review’s Stephen Spruiell makes the following point:

Italy (debt-to-GDP: 118 percent) has put together an austerity package that relies mostly spending cuts to do the heavy lifting. Portugal (debt-to-GDP: 86 percent) has put together an austerity package that relies mostly on tax increases. Because Italy is cutting spending instead of raising taxes, it has better economic growth prospects, and will bring down its level of indebtedness more quickly, than Portugal. That markets believe this is reflected in CDS spreads of 189 basis points for Italy, compared with 289 points for Portugal.

Me: Traditional fiscal austerity (higher taxes and less spending) has a poor track record because higher taxes are a growth killer. The way heavily indebted nations escape their fiscal traps is either through inflation or higher growth or default. The US should take Door #2 while also cutting spending.

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