Saturday, May 9, 2009

Our Popular President, Gay Marriage in Maine, Stimulus Update, Economic Update, A Slower 2nd Hundred Days?

It is day 110 of the administration of President Barack Obama. This is 7.5% of his full term.

Presidential Popularity Stays High

As we watched President Obama's popularity across January, February and March, it would be easy to draw the conclusion that what he was experiencing was the typical initial surge in popularity that always accompanies a new administration and that his popularity was slowly eroding towards the historical partisan divide that we have seen over the past 20 years. After all, when it comes down to actual elections, the division has remained quite close. Consider the elections of the last 20 years:
1992 -- Bill Clinton vs. George H.W. Bush -- Clinton-Bush = 5%
1996 -- Bill Clinton vs. Bob Dole -- Clinton-Dole = 9%
2000 -- George W. Bush vs. Al Gore -- Gore - Bush = <1%
2004 -- George w. Bush vs. John Kerry -- Kerry - Bush = 3%
2008 -- Barack Obama vs. John McCain -- Obama - McCain = 7%

Essentially, we have voted in a range that went from a high of +9% for the Democrats (Bill Clinton in 1992) to +3% for the Republicans (George W. Bush in 2004), which is pretty narrow when you consider the landslides from earlier in the century that guys like Ronald Reagan (+18% vs. Walter Mondale in 1984), Richard Nixon (+23% vs. George McGovern in 1972) and Lyndon Johnson (+23% vs. Barry Goldwater in 1964).

So is President Obama the next Reagan, Nixon or LBJ, at least from an electoral and popularity standpoint? It's still way too early to tell. What we can say for now is that his popularity is holding on very strongly. The graph below, which shows his monthly average, show his approve-disapprove holding in the low 30s, well above the marks above. After losing 6% in this measure in February and 8% in March, President Obama lost only 2% in April and has regained most of that 2% so far in May.

The daily tracking below shows the same trend -- a fairly remarkable stability in Presidential popularity since March.

How about our breakdown by poll type? Here is the latest:
Adult Americans: +37%
Registered Voters: +29%
Likely Voters: +17%

Even using the most conservative estimate, the likely voters number, if an election were held today, President Obama would do 10% better than he did last November. This would give him all the states he won in 2008 plus Montana, Georgia, Arizona, North and South Dakota and South Carolina (sorry, readers, he'd come up just short in Texas by this measure.)

So is this a harbinger of an era of Democratic dominance as people such as James Carville have been suggesting? Hold on a little. Part of this surge is driven by the extremely strong political skills of President Obama himself and might not translate to future leaders such as Hillary Clinton or Joe Biden. Also, we haven't exactly seen an active, engaged Republican Party. Quite the opposite. The key for Republicans will continue to be generating fresh, market-based ideas and finding a way to appeal to more minorities, particularly hispanics. The demography continues to lean more and more Democratic with the current divide, with minorities comprising a greater percentage of the population and a new generation coming of age that has no time for tired positions of social conservatism.

Gay Marriage in Maine
I told you that the winds of change were blowing. Maine this week became the fifth state to legalize gay marriage, joining Massachussetts, Connecticut, Vermont and Iowa. It also became the second state to legalize it by an act of legislature, joining Vermont last month. In total, six states have allowed gay marriage at some point, with California briefly allowing gay marriage, but outlawing it again after a state referrendum last November.

The debate now moves to New Hampshire, New York, Rhode Island, Washington, DC and California.

New Hampshire has passed bills in both houses of the state legislature. A reconciled bill passed Wednesday and now moves to Gov. John Lynch (D), who has, in the past, opposed gay marriage. The votes are not there to override a veto if one is issued, but it is unclear if Gov. Lynch will in fact issue a veto, sign the bill or allow it to become law without signing it. He has until Tuesday to issue a veto or the bill will become law.

New York Gov. David Patterson (D) has urged the legislature to pass a bill to legalize gay marriage in New York, but it appears Democrats in the state legislature are struggling to get enough votes to pass a bill.

Rhode Island, potentially the lone hold out in New England if the New Hampshire bill becomes law, appears to have stalled in efforts to pass a gay marriage bill, facing strong support from the heavily Catholic population there.

In Washington, DC, the city council voted 12-1 to recognize gay marriages from states that allow them (our old friend, former Mayor Marion Barry being the lone dissenter), but the issue must be approved by congress, which has legal jurisdiction over the federal district. Whether the votes are there in congress is also unclear, particularly in the Senate.

In California, which was closely contested in 2008, is expected to be back on the ballot in 2010.

I'm not saying that gay marriage will be the law of the land across all 50 states any time soon, but does anyone else sense a drumbeat of inevitability here?

Stimulus Update
Stimulus funds are starting to move quickly. Here are the latest numbers released by the government. Recall that there is $499 billion in spending authorized, in addition to the $288 billion in tax cuts that have already taken effect.

Allocated so far: $88.1 billion (17.7%)
Spent so far: $28.6 billion (5.7%)

Almost half of the actual spending has taken place in the past few weeks. Recall my benchmark for President Obama is to effectively spend at least 40% of the stimulus within his first year in office. He appears to be off to a good start.

Economic Update
Since the economy started contracting in the third quarter of last year, the dissent was pretty fast and furious through the first quarter of this year:
2008 Q3 GDP Growth = -0.5% annualized
2008 Q4 GDP Growth = -6.3% annualized
2009 Q1 GDP Growth = -6.1% annualized

The total contraction from these 3 quarters is a 3.3% contraction in the economy.
Going to our big board, this recession now ranks as the fifth worst economic contraction in modern U.S. history.

(1) The Great Depression -- 1929-1933 -- 26.6% contraction
(2) The Post-WW2 Bust -- 1945-1947 -- 12.9% contraction
(3) The 1957-1958 Recession -- 3.8% contraction
(4) The Great Depression 2 -- 1938 -- 3.4% contraction
(5) The 2008-2009 Recession -- 3.3% contraction
(6) The 1981-1982 "Double Dip" -- 2.9% contraction
(7) The 1953-1954 Recession -- 2.7% contraction
(8) The 1974-1975 Recession -- 2.5% contraction
(9) The 1980 Recession -- 2.2% contraction
(10) The Post-WW2 "Double Dip" -- 1949 -- 1.8% contraction
(11) The 1960 Recession -- 1.3% contraction
(12) The 1990-1991 Recession -- 1.3% contraction

With continued negative economic growth appearing more likely than not in Q2 of this year, it appears likely that this recession will wind up as either the third or fourth worst economic period in our nation's history.

But let's have a little perspective and consider the gap between this recession and the top 2. Let's very conservatively say that the economy contracts 5% in Q2 (I think the number will be significantly better than that, but let's theorize) and then shrinks 2% in Q3 (I think the number will be positive in Q3 most likely.) That would put the total contraction at 5.0%, definitely third worst, but still not even one fifth as bad as the great depression.

Unemployment is up to 8.9% in the latest release from the BEA, the highest since the early 80s and will likely go higher, probably to 10% or so before it stabilizes and begins to fall. In the Great Depression, it sustained over 25%.

While the orgins were similar (a credit crisis), the tools and checks at the government's disposal (FDIC insurance, the bailouts, Fed management of interest rates and money supply) have blunted the worst.

The stock market has been surging in anticipation of a recovery and I am no longer hearing any serious economists talking about a depression (defined as either a 10% drop in GDP or 8 straight quarters of GDP decline, depending on who you ask) any more.

Not that we are out of the woods -- we need the stimulus funds to be spent, we need to manage through the downward slide of GM and Chrysler (see my previous blog) and we have to maintain consumer confidence, which has started to recover. But things are looking a lot brighter, as I predicted they would.

Presidential Slowdown in Days 101-200?
After a very active first 100 days, it appears President Obama may be headed for a slowdown in change in days 101-200. There are big milestones to be sure:
* An assured confirmation fight for whoever his supreme court nominee is
* A fight on each of the appropriation bills for next year's fiscal budget which may include a fight over partial healthcare reform

But neither of these seems to rival the huge level of activity in the first 100. Part of the reason is that President Obama did all the easy things in his first 100 -- namely all of the executive orders he issued. Part of the reason is that the stimulus fight was so overwhelming in the first 100 days and nothing of that scale, save for possible healthcare reform, rivals the size of that fight.

But these days, President Obama is asking for bills on Credit Card Reform, needed regulation no doubt (it is downright usary that people can accumulate debt at one interest rate and then have that interest rate spiked by as much as 20% even if they have made every payment on time), but hardly game-changing stuff.

It still could turn more active -- particularly if Democrats push hard on universal healthcare reform or cap and trade, but it seems more likely at this point that the second hundred days will be more about administrating (spending the stimulus, enforcing new executive orders, executing the Iraq and Afghanistan strategies) than it will be about major legislative change.

President Obama might be wise to press his strong popularity while he has it to keep pushing for change. People are more ready now than they ever will be. If the economy recovers, the energy for universal healthcare reform will fade as it did on Bill Clinton.

If you like this site, tell your friends.

Incidentally, congratulations to whoever our 1,000 visitor since January 24th is, as it appears likely that this threshold will be crossed in the next week or two. This site has obviously had a lot more than 1,000 visits, but we didn't keep track throughout election season last year, so I don't know the absolute total.

No comments: