Free Markets, Free People
The following statistics were released today on the state of the US economy:
The Commerce Department’s initial estimate of 2012 first quarter GDP is a below-trend—and lower than expected—2.2% annualized rate of GDP growth, down sharply from the 4Q 2011 rate of 3.0%. The GDP price index rose 1.5%. The GDP decline is mainly due to a 3% drop in government purchases. Strength was largely in personal consumption expenditures, which rose 2.9%.
Consumer sentiment is inching up, with the index rising to 76.4 for the month.
The Employment Cost Index rose 0.4% last quarter, mainly due to wage increases, though the increase is down from last quarter’s 0.5%. Year over year, the ECI is up 1.9%.
Call it anecdotal evidence of the survey below and the point made about eroding Democratic support. There are obviously many reasons for that, but let’s look at one of them.
Recently some Republican pollsters hit 11 swing states and organized focus groups composed mostly of Democrats and Independents. What they found support the results of the Pew survey below. The reasons are fairly interesting:
McLaughlin handled blue collar and Catholic voters in Pittsburgh on April 3 and Cleveland on March 20. He found that they are very depressed about the economy and feel that their tax dollars are being sucked up by both the rich and those living on government assistance.
During the focus group discussions about debt and spending cuts, many in his group volunteered criticism of the presidential vacations as something that should be cut. Among the lines McLaughlin wrote down was one from a Democratic woman who said, “Michelle Obama spends $1 million to take the kids to Hawaii,” and another who said, “President Obama was the only president to take so many trips.”
The theme, said McLaughlin, is that the first family “is out of touch” with working class voters.
As has been said, in politics, “perception is reality” and the perception being reported by these focus groups is not one a president who is going to have to rely on populist arguments to hang on to power wants out there.
Now will that be enough to have them drop support for Obama or not turn out to vote? Obviously, we don’t have enough data to determine that. But, what you don’t see here is blind support for him either. The criticism, in this case, works against his populist posturing, however, and that’s not a good thing.
You may be questioning my assertion that Obama is trying build a populist campaign to help him retain power. However, his only other option is to run on and tout his record. And any sane political consultant would likely say, “are you kidding”?
So instead he’s engaged in a populist campaign. Demonizing the rich, Big Oil, student loans, etc. And his demonization of the rich is working, at least in Democratic circles. However, that success is being negated by the perception voiced above:
He added that the president’s attack on the rich and GOP presidential challenger Mitt Romney’s wealth is working, but the voters were also lumping in the president’s vacation spending in with the General Services Administration’s Las Vegas scandal and federal spending for those who aren’t looking for work.
Again, the populist campaign is being blunted by the president’s behavior and the spending scandal(s) surrounding his administration.
Oh, and another indicator to tuck away:
“There really wasn’t a real dislike for Romney. It was just that he is too rich. But on the other hand there is a start of resentment of the government,” he said. “What surprised me is that these were Democrats back biting on their own president,” added McLaughlin.
It doesn’t surprise me. There’s a sense of entitlement with this president and his family that is off-putting. And that is being picked up by potential voters and they don’t like it. They most likely wouldn’t like it in good economic times, but could likely shrug it off. But in bad economic times when they’re suffering, they deeply resent their president blithely ignoring their plight and essentially using his office (and their tax dollars) to indulge himself with something they can’t do.
Some analysts have a tendency to wave things like this off as nonsense. But it isn’t. A vote is made up of a lot of small things driven by their perceptions. When added up, that leads to a decision. Who knows what other perceptions these Democrats have to add to this obvious resentment they hold?
The point, of course, is are they enough to erode their support for Obama? We’ll see. But note, when Republican pollsters get this sort of reaction from blue collar Democrats in focus groups, it’s probably not a isolated feeling among that group.
It has never been particularly high (except in 2003 apparently), but in the last few years, it has taken the same route as the economy. The Pew Research Center has published a survey has taken a look at the favorability ratings for local state and the Federal government, and the Fed is in Congress and Nancy Pelosi territory when it comes to that.
Governments in general have seen their favorability rating slip over the past decade, but none like the federal government. And the “hope and change” administration has apparently managed to drive the unfavorable view of government even deeper than that mean old Bush guy.
I bring this survey up for a reason. Many things factor into a vote. Or a decision not to vote for that matter. Getting an idea of how voters may feel about such institutions as government is important in trying to figure out how the vote has a whole will go.
The perception they have – favorable of unfavorable – of government is one of those good indicators.
Look, for instance, at the point on the chart around 2008. Of course we all know what happened then. But the unfavorability number then wasn’t as bad as it is now.
It climbed after that mainly on the “hope and change” smoke and mirrors show. But then reality set in. Bailouts, trillion dollar debts for as far as the eye could see, failed stimulus, a huge increase in unemployment, passage of a hugely unpopular, expensive and possibly unconstitutional health care act along with cratering housing prices, an economy that continues to bounce along the bottom and an administration that frankly seems clueless.
Reaction? Favorability takes a dive to a new low – 33%.
Now there are those who will tell you that this is no big deal. Well it is. What this helps do is frame the debate for one side and tailor it to a receptive electorate. Big government, intrusive government, expensive government has failed. And there’s a three year record for everyone to see. The federal government has tried, for the most part, to do everything the blue model of government says it should do. It hasn’t worked.
Or said another way, this survey points to an issue that should be popular for one side of the political spectrum and require the other side to defend their model, if they can.
So why is this a problem for the current administration? Because of where the most significant changes have taken place:
Since Barack Obama’s first year in office, public assessments of the federal government have dropped nine-points, with most of the change among Democrats and independents. In 2009, 61% of Democrats and 35% of independents had favorable opinions of the federal government in Washington, those figures stand at 51% and 27%, respectively, today. Republicans’ views, already low in 2009, have shown less change.
Everyone and their brother knows that the Republicans are going to have a less favorable view of a Democratic administration (just as the numbers were reversed when Bush was in office). No big deal. The significance comes in the eroding numbers among Democrats and, of course, independents.
In fact, the number for independents is below the average for favorability on the whole. Indies are in the 73% range of being dissatisfied with the federal government. And Democrats are in danger of seeing the number slip under 50% if they’re not careful.
What do these numbers impact?
What they’ll possibly impact, on the one hand, is enthusiasm. Especially among Democrats. The 10 point change between July of 2009 and today among Democrats sends a distressing signal to the administration. They’re losing even their stalwarts. And you have to figure that if there are 10% who’ve grown dissatisfied with the federal government as run by their own party, there are probably a good percentage leaning toward that as well.
Independents already had a pretty low opinion of the federal government in July 2009 at 35%. This administration has done nothing to win independents over and in fact, independents now have a lower opinion of this version of the federal government (27%) than they had under Bush (35%). In the case of Independents, the lower number may motivate more independents to go to the polls and vote for the opposition.
That’s hardly what the administration wants.
So file this survey away as an important data point and indicator of the mood of the electorate. At this date, It doesn’t point to good times for the administration regardless of what candidate polls say at this stage of the race (they’re worthless). This sort of information, along with direction of the country polls, etc. give one the mood of the country. As you can see, the mood – when it comes to the federal government – isn’t good. It reminds one of the mood prior to the “wave elections” we’ve seen in the recent past.
How that will translate in November is still hard to say – but it will become clearer as we get closer. In the meantime, take all the spin of who will win with a grain of salt. There’s deep seated underlying dissatisfaction with Washington DC and those who run it.
That could mean big trouble for incumbents – especially the one in the White House.