Osama Bin Who?, What to Make of the State of the Economy, Debate #3 Prepping

President Obama - At the Low Point
I remember when Osama Bin Laden was killed by a daring raid on his compound in Pakistan just a few months ago. Political pundits, both wishful Democrats and mainstream commentators were speaking of how this would seal the deal to re-elect President Barack Obama to a second term. I got a good laugh at the time. It isn't that President Obama didn't get a bounce in the polls as a result of the Bin Laden raid - he clearly did. For a fleeting second, we were just a bit more unified as Americans. It is just that I know how short the American attention span is. President George Herbert Walker Bush was flying at 89% approval in the spring of 1991, coming fresh off victory in the Persian Gulf. By November of 1992, his approval was 34% and he got a mere 38% of the vote in his attempt at re-election.

Whether President Obama is re-elected in November 2012 remains to be seen. As I just noticed, a lot can happen fast in American politics. What is clear is that the approval benefit that the President got from the killing of Osama Bin Laden has faded and then some. The last few weeks of debt-ceiling wrangling has taken its toll on his numbers, as evidenced below.



His monthly numbers put him at the low point of his Presidency. Being clearly into the negative numbers is perilous for a guy hoping to be re-elected. The gamblers on Intrade still think an Obama re-election is more likely than not (it is currently priced at a 54% probability), but less likely than at any previous point in his Presidency. Simply, unless the Republicans commit suicide with a candidate like Bachmann, the President will need to at least hold and probably improve his current job approval numbers to get four more years in the White House.



Correcting Stock Markets, Austerity and Debt Downgrades, Oh My!
The investment world took a collective gasp this week. It wasn't one event. In fact, in a lot of ways, the fundamentals were looking better. The debt ceiling was raised. The European central bank is looking into buying the debt of Italy and Spain, providing an under-pinning of support for the fragile Euro. Corporate profits are at record levels. But people are very nervous. And there are causes to be nervous.

1. Austerity
The debt deal will clearly lead to lower government spending, across the board, which has an anti-stimulative effect on an economy, at least in the near-term. $666B of the $787B in stimulus funds (85%), the keystone economic program of the Obama administration to date have already been spent. The "stimulus by another name" payroll tax credit expires at the end of the year. Extended unemployment benefits are also set to expire at the end of the year.

President Obama has called for extension of unemployment benefits, an extension of the payroll tax cut and increased spending on infrastructure, all of which sounds like stimulus without the President actually calling it stimulus. But is it realistic to spend more and tax less at the same time that the Congressional panel must find another $1.5 trillion in cuts or tax hikes over the next 10 years? It's hard to do deficit reduction and stimulus at the same time.

2. The Stubborn Jobs Picture
Hiring actually picked up a little in June, but progresses at an anemic pace. The 117,000 jobs created last month are scarcely enough to keep pace with population growth. The official unemployment rate remains a stubbornly high 9.1%. If you include those who have given up looking for work, it's an even-more depressing 10.9%. Include those working part-time who are trying to work full-time and you get the "underemployment" rate, a whopping 16.4%.

People who aren't working aren't generating economic output, paying taxes or spending money. Not a great place to be.

3. The Debt Downgrade
Standard and Poors downgraded the quality of U.S. Government Bonds from the highest rating of AAA, a rating U.S. debt has held for all of modern history, to its second-highest rating of AA+. This has received a lot of press, but is probably overblown. Treasury yields are near the lowest levels in modern history as the massive sums of cash not being used to grow the economy are finding their way to the "safe haven" of governmental debt. There simply is no other debt market that can hold that much cash and so it is highly likely that Treasury Yields will remain low of the near-term and the government will not have an issue finding a home for its debts.

Besides, let's be real...S&P doesn't exactly have a stellar track record. Those Collatoralized Debt Obligations that imploded the economy in 2008? AAA rated by S&P. AIG's debt in 2007? AAA rated by S&P. Is S&P really saying that governmental debt now is more risky than AIG or CDO's were then? Or perhaps they are just admitting that they aren't very good at projecting risk.

At any rate, the economy continues to limp along. Whether it will take a turn towards higher growth or slide back into a second recession is difficult to predict. But it will have a huge impact on the election.

Time for Another GOP Debate - What to Watch
Next Thursday at 9 PM ET, Fox News will host the third official GOP Presidential primary debate. I say third official, because the first debate was before the major players got in and therefore excluded key contenders like Mitt Romney and was not broadly watched. This debate should feature all the key players, except for the still-undecided Texas Governor Rick Perry, who really is the guy everyone wants to see.

What we should be watching is how hard the other candidates come after Romney, who is the clear front-runner at this point. Romney has been on lock-down during the debt ceiling discussion, stating no point-of-view. Are the other candidates going to call him on it? Go after him for Romney-care? Try to sell themselves as the more plausible alternative?

Tim Pawlenty was widely criticized for playing it very safe in the second official (but first broadly participated) debate and failing to go after Romney. His campaign is languishing, so don't expect that this time. Expect Bachmann to be full of fire, as she always is. And expect the others to attempt to do something to break themselves out of the pack. I'm just not convinced that any of the present field can beat Romney or that anybody other than Romney can beat Obama. But, like I said, Rick Perry isn't in the game yet.

If you like this game, tell your friends.

Death Comes to the Most Evil Man on the Planet, A Blow to the Fringe, Presidential Resurgence (At Least for Now)

Code Name: Geronimo, Status: Dead
It was a long-delayed catharsis for those of us who have the awful day of September 11, 2001 etched into our memories, which is pretty much every American over the age of 10.

After 10 long years of at least two wars (three if you count Libya), countless American soldiers lost, trillions of dollars spent and stunning intrusions into our civil liberties, the man who started it all, undoubtedly the most hated and evil man on the planet, terrorist Osama Bin Laden is dead.

Bin Laden was nothing he claimed to be. He portrayed himself to be a man of the Arab people. But he was no revolutionary. Part of the reason he was located was that he was not, as many expected, hold up in some remote cave, but living a lavish life in a mansion outside of Abadabad, Pakistan.

He was no courageous warrior. By all accounts, his last minutes were filled with cowardice, not bravery.

He was no true believer, even in the distorted principles of the radical sect of Islam to which he belongs. A true believer would have welcomed the chance to enter the afterlife a martyr and join his harem of virgins. But Bin Laden resisted like a man who, rather than being a religious man, was a deceitful, cynical man, who used religion to gather the poor and the downtrodden to his evil cause.

The political punditry have already begun the debates -- who gets the credit - George W. Bush or Barack Obama? Should the photos be released? What does this mean for 2012? I will talk about all these things in the months ahead. Politics is an important part of preserving our democracy. I wouldn't spend so much of my time writing about it if I believed otherwise.

But before you read the next two sections, which rejoin the political discussion, take a moment, or an hour, or a week and savor the vast improvement that human race has undergone by no longer having Osama Bin Laden within its ranks. He was a disgrace to Islam and the Arab world, but most importantly to humanity. I am not a religious person, but today, I hope gravely that I am wrong, so that there is a hell for Osama Bin Laden to burn in.

I'm also not a believe in the death penalty, but I can't think of a better exception to the rule than the most evil man on the planet.

Good riddance, Osama. Congratulations, Navy Seals.

Conspiracy Theories That Are Dead
It's been a rough couple of weeks if you are a wing nut conspiracy theorist. If you were one of the so-called "birthers", the release of the President's original birth certificate struck a blow to your cause. In fact, a new CNN poll reveals that a mere 3% of the population believes the birther nonsense, down dramatically from earlier polls that had the numbers well into the double digits.

If you are one of the so called "truthers", those who believe that the government was complicit, or even behind, the events of September 11th, your theory took a pretty hard blow with the surgical killing of the man who really did it.

In a Democracy, there will always be wing nuts. Some wing nut theories are harmless, like the fascination with Area 51. Some are vicious and evil, like the Ku Klux Klan. And some are just plain stupid. Birthers and truthers fit somewhere between the second and the third.


Surges Aren't What They Used to Be

I had mentioned in my last post that the President's numbers had been sagging. This, of course, was prior to the successful killing of Osama Bin Laden. Prior to the killing, the President's approve minus disapprove had slumped to the range of -2, which, while not the absolute lowest of his Presidency, basically meant that the entire "lame duck bump" that he got following the success of the lame duck session of the last congress, combined with improving economic conditions, had entirely faded. Very predictably, the President, got a bump from the killing of Bin Laden. His daily numbers since my last report are below.



With the killing occurring right at the beginning of May, you see exactly the same pattern in his monthly numbers.



What is interesting is that while the President certainly got a bump from getting Bin Laden, it is nowhere near the bumps that past Presidents have seen in uniting moments like this for the country. George Hebert-Walker Bush saw his approval rating climb to over 90% in some polls following the success of the first Persian Gulf War. The same was true for George Walker Bush following the immediate aftermath of September 11th. By that standard, Obama's poll bump seems pretty modest.

But times are different. For one thing, we've been at war for 10 years, so the unifying effects of a military operation have been significantly muted. For another, the economic is still very tough for a great many people. Unemployment, while well down off its high, is still a painful 9.0%, a full 1.5% higher than the worst it got during H.W. Bush's administration, when his approval sank as low as the 20s. Thirdly, we are clearly more polarized -- the days of a President having 90%+ approval may be gone for good. And finally, and this is a good thing, voters actually seem to be viewing this through a sophisticated lens. The President's approval on foreign policy matters has jumped to multi-year highs as has his approval on the war on terror. In other words, people give the President credit for a job well done getting Bin Laden, some just don't approve of him overall because of our economic and budgetary troubles. That is a completely fair, well-reasoned point of view.

As I say just about every week now, election 2012 is all about the economy. Killing Bin Laden is a crowning achievement for President Barack Obama's legacy. But the things that build legacies are not necessarily the ones that win elections.

If you like this site, tell your friends.

I Demand to See Donald Trump's Birth Certificate, Hoping for the Gang of Six, A Presidency in Crisis?

Birthers Are Racist Idiots
Barring some kind of dramatic event unfolding, my sincere hope is that this is the last time I have to write about this topic. I've spilled enough virtual ink on this nonsensical topic. Let me try one more time to rehash things:
In 2008, when then-Senator Barack Obama was running for President, rumors from the conservative blogosphere emerged that he had not, in fact, been born in Hawaii, but had been born in Kenya. In response, his campaign released a "Certificate of Live Birth", the current legal copy of a birth certificate issued in Hawaii, which should have put the issue to bed. But there is no convincing idiots with logic, and the rumors have persisted, buoyed in recent days by the incoherent ramblings of one Donald Trump.

Let me review the facts one more time:
* The "Certificate of Live Birth" is the current legal standard for birth certificate copies in Hawaii, it is accepted as proof of birth in all 50 states and by the U.S. State Department for the issuance in passports.
* Microfiche evidences proves positively that the birth of Barack Obama in Hawaii was reported by the hospital in two papers the day after it occurred.
* Several news organizations including factcheck.org and CNN had viewed the original of his birth certificate in Honolulu and reported that fact.
* Even if one were to ignore the obvious facts as to the location of his birth and choose to continue to believe he was born in Kenya, President Obama would likely have been eligible anyhow as he was entitled to U.S. citizenship at birth based on the citizenship of his mother. This is no different from Senator John McCain, who was born in Panama while his father was serving in the military.

But, the President relented this past week and was able to convince the State of Hawaii to release his birth certificate. This was a poor move in my opinion -- there was absolutely zero credible evidence to counter from the birthers and frankly, if the right-wing of the GOP wants to behave like a bunch of braying jackasses, I'd be happy to let them. Karl Rove commented extensively on how this issue was hurting the credibility of the President's opponents, as had Bill O'Reilly and they were both 100% correct. But, in his continuing spirit of "ever backing down", the President conceded ground to the wing nuts and convinced the State of Hawaii to release his original.

So why do I think birthers are racist? Ask yourself a question. Has Donald Trump released a copy of his birth certificate? How about Mitt Romney? Michelle Bachman? Have any of the GOP candidates?

And why is no one asking?

You could say that it is because there is no credible reason to believe that any of them were born outside the United States and you'd be right. There is equally zero credible evidence that Barack Obama was born outside the US. Simply put, if you choose to believe that the President was born in Kenya, against all facts, then you are simply buying into the Muslim-Kenyan-Tribal image of our first black President. And you are doing so without evidence. And that is racism, period.

If you've been hawking this issue, get a life. I'm talking to you, Mr. Trump.

Will the Gang of Six Crack the Deficit Code?
We are a long way from a deal on long-term deficit reduction. It's a very strong possibility that, as has happened so many times in the past, all the talk will lead to very little action. There have only been a few times in my lifetime that the parties have come together to effectively address the deficit. The Gramm-Rudman deficit reduction act of 1985, which closed tax loopholes and implemented the original version of "pay as you go" comes to mind. So does the tax deal that President George Herbert Walker Bush struck with congressional Democrats in 1991, which was wildly unpopular with his party but set-up for the surpluses of the late 90s. But it doesn't happen much.

But I AM very encouraged with the bipartisan negotiations that are taking place between the so-called "Gang of Six" which include 1 liberal Democrat (Dick Durbin-IL), two moderate Democrats (Kent Conrad-ND and Mark Warner-VA) and three conservative Republicans (Saxby Chambliss-GA, Mike Crapo-ID and Tom Coburn-OK.) Using the deficit reduction commissions plan as a baseline, they are working towards a deal and making some progress. Coburn has even defended tax changes that would increase revenue (also known as tax increases) so long as the revenue-enhancement is achieved through closing loopholes and not through raising marginal rates (which is what the deficit panel had proposed.) I wish we'd gained alignment at the outset for an up-or-down vote on the panel's findings, but thanks the partisan flip-flopping of Senator John McCain and others, we didn't get that chance. But if these six Senators, who come from across the ideological spectrum, can agree on a plan, then I believe that a bipartisan bill can pass. And they are doing it the right way, putting things on the table, negotiating in good faith. We all should root for their success.

How Much Trouble is Barack Obama In?
I've been writing for a while that President Obama was an odds-on favorite for a second term. My theory has always been that the timing of economic recovery would create favorable conditions for an incumbent, regardless of any policy squabbles. But the economic recovery has become significantly less robust, with economic growth slowing to 1.8% in the first quarter of this year and inflation jumping up significantly, particularly on commodities such as oil and food. Incoming growth above the "mendoza line" of 1.5% (the line on linear regression analysis that generally correlates to the incumbent President's party receiving 50% of the Presidential vote) is not assured and the President's poll numbers, after a bump at the end of last year and the beginning of this year, have sagged again (a full update on those numbers next week.)

But the President is still polling favorable against would-be GOPers. Here is a quick average of his performance against possible GOP candidates:

Versus Mike Huckabee: Obama +2.5%
Versus Mitt Romney: Obama +2.4%
Versus Jon Huntsman: Obama +11.0%
Versus Michelle Bachman: Obama +12.0%
Versus Mitch Daniels: Obama +13.0%
Versus Tim Pawlenty: Obama +13.5%
Versus Newt Gingrich: Obama +14.3%
Versus Donald Trump: Obama +15.4%
Versus Sarah Palin: Obama +17.9%

Of course, these polls are not very predictive of final outcomes at this stage of the race - Jon Stewart did a great comedy piece on this on the Daily Show last week which relived the news reports of Hillary Clinton being a lock in 2008, Joe Lieberman being the front-runner in 2004 and Bill Clinton being in 7th in the Democrat running order in 1992. But they do give us some clues.

Clearly Huntsman, Daniels and Pawlenty are suffering from the fact that few people really know very much about them yet. And Gingrich, Trump and Palin are likely suffering from the fact that people DO know a lot about them. Romney and Huckabee are the two established, credible candidates that the public knows, and they poll pretty close to President Obama. Either one of the lesser-knowns will break out of the pack or those two, who have to be considered the front-runners at this point (regardless of Donald Trump polling well in some polls at this point), would run a very close, competitive race with the President next November.

So how much trouble is the President in? I've said it before and I'll say it again -- it's all about the economy.

If you like this site, tell your friends.