The list of crises facing the White House today is lengthy and weighty: the Gulf oil spill, high domestic unemployment combined with an unstable economic situation in Europe, a cultural divide on the issue of immigration, and continuing efforts to stabilize Iraq and win in Afghanistan, just to name a few. Today, we are likely to get a very poor jobs report after five consecutive months of job growth. Will the jobs report be seen as the beginning of a double dip recession?
As we enter the summer of 2010, the Administration faces the most substantive macro issue agenda in decades. Former President Bill Clinton is often said to be unhappy with the fact that few “big things” happened during his presidency. We doubt President Obama will ever have that complaint.
Despite his many challenges, Obama does have a window of opportunity to right the ship of state before the fall elections. It is, after all, the summer. This is a time when most voters disconnect from the political and policy debates and processes. Plain and simple, the level of information absorption declines dramatically over the next two months and as result Obama will benefit from this period of low attentiveness. Two things are likely to happen this summer that will help the President:
- The Gulf oil spill coverage has probably reached—pardon the pun—a saturation point. The shock and immediacy of the situation has abated. People are now fully aware of the damage done. The relief wells will be completed in August. If the leak is stopped before Labor Day—and right now this is far from certain—the President will have won at least a partial victory. Of course, the spill will remain a political issue in the fall and perhaps in 2012, but the worst will have passed for Obama.
- News outlets (both old media and new media) recognize the changing pattern in news consumption and act accordingly. Therefore, there is less focus on politics and public policy and this will help the President as well.
We are not saying that all of the President’s problems can be solved in July and August, but this period gives the Administration an opportunity to get some traction on a few issues before the fall campaigns begin in earnest. Voters will tune back in after Labor Day and will reassess the President and his policies at that time.
Current Political Environment
Our sense is that today’s jobs numbers are going to trigger some significant media coverage and modest political fallout and cause a drop in the stock market to boot. While voters are pretty much locked-in with respect to their perceptions of the President, we may see his approval numbers start to move from the mid-40’s—where they have been consistently over the last 60 days—into the low 40’s. If this happens and it is not corrected during the summer, the Democrats will be extremely vulnerable in the fall. The difference between an approval rating in the 46-47% range vs. ratings in the 41-42% range may be the difference between Democrats just losing the House and Democrats losing both the House and the Senate.
Perceptions that the country is off on the “wrong track” is at the highest point (62%) of the Obama presidency. Not coincidently, Obama’s approval rating is at its lowest point: 46%.
Note in the above chart that Obama’s approval rating actually started falling with little appreciable increase in the “wrong track” numbers. This indicates that voters may have been reacting to the health care reform debate, evolving assessments of the stimulus and other Obama policies. Put simply, Obama was forced to make political decisions that couldn’t please everyone, disappointing voters with lofty, impossible expectations. But now he faces a more structural challenge: the combination of 12 months of unemployment at or above 9.4% (as well as the intensifying war in Afghanistan and the Gulf oil spill) have pushed the country’s “wrong track” number over the 60% mark. If “wrong track” gets into the mid-60’s it’s hard to see the President’s approval rating reaching much higher than 40-42%.
As we move closer to the fall elections it might make sense to revisit 1994 and compare the key political indices of that time to the current situation. The below chart should scare any Democrat reading this post:
A quick review of the key political metrics suggests that Democrats will most likely lose the House this fall. This, by the way, is not necessarily the worst thing that could happen for a President Obama running for re-election. Gridlock in Congress would provide him with political cover for an extended recession or slow recovery, as well as giving Obama and the Democrats something to run against in two years.
The biggest problem for Democrats might be that among energized/interested voters, the gap on the generic congressional ballot is even higher (in the Republican +6 range). The problems for Democrats nationally are extensive and notable:
- Voter interest is higher among GOP leaning and Independent voters than Democrats
- Congressional approval is an historic low
- The President’s approval rating among Independents is only 40%
- The “re-elect” numbers are at or near historic lows and there are substantially more Democrats than Republicans in office
- The engaged voters are angry about spending and the stimulus package; this gives the GOP a huge advantage
Now whether the above translates into a thirty or a fifty seat gain for Republicans remains to be seen, but unless Democrats and the President can turn things around a bit this summer, November 2nd will be an unpleasant day.