On Wall Street, when a stock stays within a narrow range for an extended period of time, traders often referred to the condition as being "stuck in a channel". This seems an apt description for the President's numbers. The daily numbers below show that over the course of the past month and a half, the President's approve minus disapprove have been stuck in a range of approximately -3.5% to +0.5%. Basically, slightly more people disapprove of the President than approve and those numbers aren't shifting much.
Looking at the monthly numbers, which filter out a lot of the noise of variations in polling techniques and short-term mood swings of the public, the numbers look even more stable. Using the monthly technique, going all the way back to July, President Obama has been in a range of -0.7% to -3.5%, a tight 2.8% range for almost 6 months that always showed the Presidents disapproval higher than his approval, but always by a narrow margin.
So, we have a President who is mildly unpopular at this point in his Presidency, a public perception that has been held for about 6 months, which seems like a lifetime in American politics. What does it mean for 2012?
The 2012 Race
Let's triangulate this a few ways. It is VERY early in the race...right now was about the point in 1991 when Saturday Night Live was running a bit "1992 - The Race Not to Be the Guy Who Loses to Bush" mockingly playing Democratic hopefuls trying to convince voters not to vote for them because the nominee was sure to be slaughtered by the mighty 91% approval President George Herbert-Walker Bush. Yes, the same guy who got a whopping 38% of the vote in November 1992. So let's caveat all of this by saying things can and will change, a lot, before November 2012. In which direction is the question.
So, let's look at a few angles.
I. Present Approval Rating
The President's current numbers would represent a very close race as they stand today. As I've written previously, it would likely throw the race into critical toss-ups like Colorado and Virginia, with the former being the exact dividing point to get to a winning electoral count for either party. The President is probably encouraged that the Democratic party held on in a Senate race there this past year, but that is hardly a definitive word. Translated narrowly, it says that a Democratic incumbent can narrowly beat a tea-party Republican in Colorado in the current environment, but a more moderate candidate on the GOP side might have yielded a different result. So, clearly, Republican candidate choice matters in 2012.
II. Public Prognostication
A recent poll had only 26% of the American public believing that President Obama will be re-elected. That is an interesting result, given that it significantly lags his approval rating, which has been tracking in the mid-to-high 40s. It speaks to the fact that quite a number of people who actually like the President and intend to vote for him don't believe that he can win. That's interesting, but not terribly significant. It reflects media coverage of a President under siege, and public reaction to the dramatic gains the GOP made in the House in 2008. It is far more important how people plan to vote than how they think the election will turn out, a topic on which the average voter is not particularly well researched.
III. The Gamblers Edge
I've often looked at intrade odds, as people who bet their own money tend to do their research into what is going to happen. As of right now, the intrade odds of President Obama's re-election are pegged at 55% -- actually to be more precise, the Democratic Party's odds of winning are betting at 55%, President Obama's odds are trading slightly below that.
Obviously, the collective wisdom of the markets doesn't publish its rationale, but some obvious reasons for their greater optimism for the President's chances are the potential for an improving economy between now and November 2012, the lack of a compelling national GOP candidate at this point and the demonstrated prowess of Team Obama at running a Presidential campaign.
These odds are not far off from where I would peg the race...I believe it is close to a pick 'em race, with a slight edge to the President because of the probability that things will get better over the next 22 months.
IV. The Early Match-Ups
There have been two major national 2012 polls conducted in December, each that matched the President up against a variety of potential GOP hopefuls. As I said before, take these with a hefty helping of salt, but they are instructive at least of where the public's heads are today.
NBC News / WSJ
Obama vs. Romney: Obama +7%
Obama vs. Palin: Obama +22%
Obama vs. Thune: Obama +20%
McClatchy / Marist
Obama vs. Romney: Romney +2%
Obama vs. Huckabee: Obama +4%
Obama vs. Palin: Obama +12%
Clearly Mitt Romney fares the best of the potential GOP candidates (although these polls exclude a number of potential GOP hopefuls such as Rick Perry, Bobby Jindal, John Boehner, etc.), as he looks to be close to a toss-up with the President. Mike Huckabee polls next closest, with Sarah Palin and John Thune far behind. These numbers should be far more concerning to Palin than to Thune. Thune is not well known outside of Washington, so his numbers could potentially improve significantly if the American public actually gets to know him. In the case of Palin, she is heavily exposed to the public, some would say overexposed, and it appears that the public doesn't like what it sees. Think about it -- the President has a 45% approval rating and is beating Palin by 12 to 22 points? It doesn't look pretty for the Thrilla from Wasilla.
V. It's the Economy, Stupid
There have been significant studies (I keep promising to publish an analysis, a piece of work that I still owe you, dear reader) that have shown a very strong correlation between election-year income growth and the ultimate vote result. Note that in these studies, only the election year numbers matter, as the American public has long forgotten the first 3 years by the time election day rolls around. By this measure, there is some reason for optimism for President Obama as the economy appears to have turned a corner and may be in a significant upswing by 2012.
A Stimulus By Any Other Name
A stimulus bill containing a mixture of tax cuts and spending increases that costs over $750B all financed through the deficit in the hope of creating growth in a fragile economy. The American Recovery and Reinvestment Act of 2009? No, the tax cut deal of 2010.
It's amazing to me that after all the Republican potshots at the original stimulus package when the economy was cratering, that they have now supported an even larger stimulus package at a time when deficits are larger and the economy has been stabilized. But that's what happened.
The final votes on the stimulus/tax cut deal were pretty resoundingly bi-partisan, with, if anything, far more opposition from the left than from the right:
In the House, the final vote of 277-148 reflected 55% Democratic support and 79% Republican support
In the Senate, the final vote of 81-19 reflected 77% Democratic, 88% Republican support and 50% Independent support
A pretty bi-partisan deficit-fest.
How about that original stimulus? It still has a little juice left, but has nearly run its course. Most of the tax cuts were slated to expire at the end of this year (although some were continued in some form or fashion in the recent tax deal) and a good chunk of the spending has taken place. Here are the latest numbers:
Tax Cuts: $243B spent out of $288B (84% paid out)
Spending: $340B spent out of $499B (68% paid out)
It will be interesting to see if the new GOP House tries to cancel the remaining $159B in spending when it takes over in a month. Almost all of the money has already been awarded, so it might be difficult to do so.
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