Just how much trouble is President Obama and his economic agenda in? Allies will point to the president’s still-robust 55 percent approval rating, according to pollster Gallup, but that number has been declining steadily from a high of 65 percent in early March. (He’s actually a point lower than George W. Bush at similar points in their presidencies.) And while the House of Representives has passed historic cap-and-trade legislation, the bill seems to be going nowhere in the Senate and the president may have little to crow about at the December climate change conference in Copenhagen. Even his plan for a consumer financial protection agency looks like it’s in doubt. Then, of course, there’s healthcare reform, which Obama again will be making the case for during a prime-time news conference tonight.
But no matter how cleverly Obama makes his points or how skillfully he wrangles the Washington press corp, his efforts may be futile as long as unemployment continues to rise and sap American economic confidence. Here are the numbers that should worry team Obama: A recent AP-GfK poll found 54 percent of Americans think the country is on the wrong track, the same as in January and up ten points from mid-April. A recent Diageo/Hotline poll found 55 percent of American think the country is on the wrong track, the same as in early March and up 12 points from early June. A CBS poll has the wrong track number at 57 percent, up from 48 percent in early May and the same as in early March.
The trend is clearly not Obama’s friend, particularly with unemployment expected to continue to rise to at least 10 percent and stay elevated for some time. The outlook is dire enough that economist Gluskin Sheff economist David Rosenberg, formerly of Merrill Lynch, has speculated that Obama might turn to extreme economic measures to juice the economy and his political fortunes: “We are sure that as the unemployment rate makes new highs and increasingly poses a political hurdle in a mid-term election year, that it would make perfect sense, for a country that always operates in its best interest — even if it may not be in everyone’s best interest — to sanction a U.S. dollar devaluation as a means to stimulate the domestic economy.”
That would certainly have the potential for worrying financial markets mightily. But as for now it’s tough to find much investor concern over Obama’s troubles or his bogged down agenda. The Dow has scored seven-straight winning sessions for the first time since April 2007, gaining nearly 10 percent over that span. With fear of a depression subsiding — see Larry Summers new favorite metric, the plummeting number of Google searches on “economic depression”, for evidence — political gridlock may again be good.