Segment 1: Seasonal Investing in 2021 SEGMENT BEGINS AT 00:44 Economist and trading coach Jerry Robinson examines the current economic environment in light of an approaching annual stock market strategy used by many investors. Will this year be different? Moral...
By Edward Luce in Washington
The Financial Times | Published: July 13 2010 18:51 | Last updated: July 13 2010 18:51
Robert Gibbs, Barack Obama’s chief spokesman, got into hot water this week for daring to speak the truth – that the Democrats could lose control of the House of Representatives in November. But it could be even worse than that.
Contrary to pretty much every projection until now, Democratic control of the Senate is also starting to coming into question. While Mr Obama’s approval ratings have continued to fall, and now hover at dangerously close to 40 per cent according an ABC-Washington Post poll published on Tuesday, the fate of his former colleagues in the Senate looks even worse.
In the past few days polls have shown Republican challengers taking the lead over previously safe Democratic incumbents, such as Barbara Boxer in California and Russ Feingold in Wisconsin. Indeed, given the uniformly negative direction in the numbers, it is now quite possible the Republicans could win the Senate seats formerly held by both President Obama in Illinois, and Joe Biden, vice-president, in Delaware.
Add to that the continuing woes of Harry Reid, the Senate Democratic majority leader, in Nevada, where the Republican party’s recent nomination of Sharron Angle, a far-right and highly eccentric Tea Party supporter, appear to have had no positive effect on Mr Reid’s prospects, and the Grand Old party has a good shot at taking control of both houses of Congress. Worse for Mr Obama, political scientists say that at this stage in the calendar, there is almost nothing he can do about it.
“If you ask me where the silver lining is for President Obama, I have to say I cannot see one,” says Bill Galston, a former Clinton official, who has been predicting for months the Democrats could lose the House. “Just as BP’s failure to cap the well has been so damaging, Obama’s failure to cap unemployment will be his undoing. There is nothing he can do to affect the jobless rate before November.”
The direction of the data could hardly be worse. According to Democracy Corps, a group headed by Stanley Greenberg, a liberal pollster who is a close friend of Rahm Emanuel, Mr Obama’s chief of staff, a majority of US citizens see Mr Obama as “too liberal”.
Astonishingly, 55 per cent of citizens think Mr Obama is a “socialist” against only 39 per cent who do not share that diagnosis. The same poll shows 48 per cent support for Republicans against just 42 per cent for Democrats. The numbers are eerily similar to 2006, except that it was George W. Bush’s Republicans who were on the receiving end four years ago.
“The bottom line here is that Americans don’t believe in President Obama’s leadership,” says Rob Shapiro, another former Clinton official and a supporter of Mr Obama. “He has to find some way between now and November of demonstrating that he is a leader who can command confidence and, short of a 9/11 event or an Oklahoma City bombing, I can’t think of how he could do that.”
In private, informal advisors to Mr Obama are almost as negative. According to one, the US public’s loss of confidence in Mr Obama’s leadership is a factor above and beyond their dissatisfaction over the state of the real economy, which continues to slow as last year’s $787bn stimulus starts to run dry. The adviser, who asked to remain anonymous, said the public did not know what Mr Obama really believed. Examples include his lukewarm support last year for a public option in the healthcare bill and his equally lukewarm support today for a Senate bill that would extend unemployment insurance and aid state governments to keep teachers in their jobs.
In both cases, Mr Obama has offered only token, negotiable, support. “I never thought I would say this, but even I’m unsure what President Obama really believes,” says the adviser. “Instead of outsourcing decisions to Congress, he should spell out his bottom line. That is what leaders are for.”
Next week, Mr Obama is likely to sign a historic Wall Street re-regulation bill into law. Earlier this year he did the same for healthcare. But polls show the public either does not care, or even opposes these otherwise big reforms. “The longer this goes on, the more it looks like Obama wasted his first year on healthcare,” said the outside adviser. “It’s still the economy, stupid.”