Summit Notebook

Five weeks: It’s an eternity in the world of politics

By Christopher Doering

Five weeks:  It may not be a lot of time for many people, but with the pivotal mid-term elections looming on Nov. 2 Delaware Senator Tom Carper said five weeks is an eternity for Democrats to use to turn the tide in their favor.

“Today, five weeks a lot happens. A lot of minds change in five weeks,” Carper, a self-proclaimed “optimist”, told the Reuters Washington Summit.

“What we have to do is to be able to remind people if there is some good news here in the next five weeks of what that is and get people to focus on the future.”

Carper, a former Delaware governor, said there is a slew of economic data coming out between now and the election that Democrats could embrace. He pointed to another unemployment report next week, and several more weekly jobless claims.

“If the election were held today we’d lose seats in the House, I don’t know if we’d lose the house,” the Democrat said. “We’d lose seats in the Senate. That usually happens in the off year election.”

Carper is up for reelection in 2012.

Rumors of our demise exaggerated, Van Hollen says

Representative Chris Van Hollen likes to paraphrase Mark Twain when talking about the Democratic chances in the November mid-term election.

“News of the Democratic demise is greatly exaggerated,” the man in charge of the House Democrats’ election effort told the Reuters Washington Summit. “I think the pundits have been wrong before and they’ll be wrong again. Democrats will retain a majority in the Congress. I’m very confident of that.”

Of course it’s Van Hollen’s job to be confident or at least project an image of confidence six weeks ahead of the election where Republicans and the conservative Tea Party movement are trying to convince Americans to vote Democrats out of office and take back Republican control of the Congress.

Van Hollen predicted a “tough, rough election” but believed his party would prevail in part because moderate Americans would be scared by possible Tea Party victories.

He said the “political energy deficit” was beginning to close, presumably meaning that Democrats were starting to get a bit more excited about the election, though polls don’t seem to be showing that.

“You have a very energized group, obviously, on the right,” he said about the Tea Party. “That is also having an impact on moderate and centrist voters who are waking up and saying ‘I agree the economy’s not where we want it to be but it’s a little scary going to Bush economic policy on steroids.’”

“This election should be a wakeup call to the ordinary citizen,” he said.

If Democrats hold US House, Pelosi seen concentrating power-lobbyist

If Democrats are able to hang on to the U.S. House of Representatives in the November 2 elections, Speaker Nancy Pelosi will likely be able to concentrate her power because there will be fewer conservative Democrats giving her a hard time on critical votes, according to top senior lobbyist for the U.S. Chamber of Commerce.

Political prognosticators have said that Republicans are within striking distance of taking control of the House in November, with Republicans needing a net gain of 40 seats and polls showing them closing in on that target.

“She’ll have a much more cohesive conference than she has now because it’s the middle that’s anticipated to get cratered in this election,” Bruce Josten told the Reuters Washington Summit.  “Most of the seat losses anticipated come from the people that are the hardest votes to get on party-line unity votes.”

Pelosi has had a tough time over the last few years holding onto votes from conservative Democrats, like the Blue Dog Democrats who have lobbied hard to ensure most legislation does not add to the bloated federal deficit.

“She’ll have a lot less negotiating to have to do, she’ll have a stronger more cohesive conference, oddly enough, than what she has had,” Josten said, adding a cautionary note that “she’ll have less margin … but literally most of the members of the Progressive Caucus are in safe districts.”

Many of the Blue Dog Democrats have decided against running for re-election or are facing tough bids to return to Washington.

Josten also said that if Republicans are able to win control of the House, predictions that they will be able to significantly alter the health care law that was passed earlier this year are probably overblown.

Shift in power on the horizon in Washington?

Republicans stand poised to gain substantial influence in Congress, putting at stake billions of dollars in investment as a shift among power brokers throws legislative initiatives old and new into doubt. Reuters Washington Summit will bring together an influential line-up of insiders just weeks before Americans cast their votes, promising a must-read stream of exclusive news on the outlook for Congress and President Barack Obama’s agenda. Editors and correspondents from the Reuters Washington bureau are sitting down with senior lawmakers, including GOP heavyweights in line for leadership, and regulators whose implementation of Wall Street and healthcare reform could be complicated by a change in control on Capitol Hill.

The Summit will generate exclusive stories, investable insights, online videos and blog postings, which will be immediately available only to Thomson Reuters clients during the Summit. Key interviews will air live exclusively on Reuters Insider – a new multimedia platform delivering relevant news, analysis and trade ideas presented through a personalized video experience. Visit http://etv.thomsonreuters.com/

Demoplicans or Repocrats? A look at stock market performance and politics

Compiled by Thomson Reuters Proprietary Research Group

• There have been five terms out of the last 16 where the last year of the term has a negative return on the DOW, and four of those terms have been during a Republican president’s term.
• When we look at the previous 90 day returns before the new term, we see that the markets are generally positive (only four negative in the last 16 terms).
• Elections are generally held in the first week of November. When we take the previous 60 day returns before the new term (from Nov. 20 – Jan. 20), we see that the DOW returns are even more positive, with only two terms out of 16 preceded by negative returns in the previous 60 days. This says that the lack of uncertainty after the elections usually give a boost to the market.
• Only three four year terms have had negative returns. 1973-1981 (Oil crisis) and 2001-2005 (Dubya’s first term).
• On average, the 90 days before the new term performs much better (3%) than the 90 days after the new term starts (1.1%).
• The last three terms have started with negative returns in the first 90 days.
• Since WW2, the Dems have had 7 terms and the Republicans have 8 (excluding the 2005-2009 Dubya term). The Dems have done slightly better (8.3% vs. 6.7%) in terms of average annualized returns over this period. However, these numbers are skewed in their favor because of the Clinton-Bubble era.