I was angry with my friend; I told my wrath, my wrath did end. I was angry with my foe; I told it not, my wrath did grow.
William Blake
Obama's "Dead Cat Bounce" in the Ratings
It is no secret to any faithful reader to the blog that I politically do not support President Obama, and I will not support his reelection. But I don't let my personal feelings influence my judgment: I have been quite clear that I know President Obama will defeat Sarah Palin if she is the GOP nominee although her political principles are closer to mine.
Look at what's happened to Obama since the devastating mid-terms: the stock market has been doing well and several economic signals are improving (GDP growth upgrade, declining first-time unemployment filings, higher consumer confidence, improving manufacturing sector, etc.), Obama finally engaged in compromise on the Bush tax cut extensions (when all tax cuts were due to expire less than a month away and the Senate Republicans blocked a class warfare bill) and picked up some symbolic wins on things like 'don't ask, don't tell' (in an overwhelmingly Democratic lame duck session). He also gave a well-received speech in the aftermath of the Tuscon Massacre; in fact, Americans tend to rally behind their leaders during crisis periods. RCP shows an average approval rating of 49.8% and a 5.6% net approval rating.
Does this mean that Obama has bottomed out, well on his way back up to testing resistance at former highs? In a word, no. Most investors are aware of the concept of a "dead cat bounce": in short, a stock may decline to some point and "bounce back" as buyers think all the bad news is behind the stock and is way too cheap. But in reality the fundamental news behind the decline hasn't changed, and is setting up for a further decline past "support levels".
The investment technical analysis analogy doesn't quite hold for politics, of course (although one could argue that Republicans in Connecticut (Senate, 2006), NY-23 (special election, 2009), and Colorado (Governor, 2010) became not a factor in the closing weeks of the campaign). I fully expect 70% or more Democrats will support Obama and probably about 40% or more of independents and moderates, although that could change (remember, Richard Nixon resigned less than 2 years after a blowout reelection landslide against McGovern). Any kind of economic downturn, aggravating an already sky-high unemployment rate, a 9/11-style attack, rampant inflation, what if states and cities start defaulting on their debt, etc. could happen.
The bottom line is, even if no nightmare scenario plays out over the next 21 months, it's unlikely that Obama will be able to make up the 7M jobs still lost over the recession or get the official unemployment rate back down around 8%. (For one thing, millions have dropped out of the labor market, and they'll came back in if the economy improves--meaning we could see the number of new hires and number of unemployed go up simulataneously; don't forget--the economy has to expand by a million jobs or so just to handle new entrants into the labor force (e.g., high school or college graduates). As for the national debt: I don't think people understand the significance of the Pelosi Congresses adding $5T to the national debt. When our total revenues in a good year peak at just over $2T, we got 6 years of spending in 4 years--and federal spending is never going to be zero. We need billions in business taxes, millions of jobs and deep spending cuts just to get back to a $400B or so deficit. This is before we reserve a dime for the health care agenda.
Are voters going to forget that an $862B stimulus plan wasn't a success by its own objectives (e.g., contain unemployment below 8%)? Or a healthcare bill putting their own popular coverages at risk? Or the debacle of the BP oil spill?
It's likely the Democrats are going to try to scapegoat the Republican House for any problems over the coming term. But if the Republicans actually shrink the deficit, introduce new ways to deal with the health care sector without breaking the bank, etc., they will gain credibility with independents and moderates. And they'll be able to say in 2012 the only reason they weren't able to do better is because the Senate and Presidency were controlled by Democrats.
The fact is, Obama won 53% of the vote in 2008. I think the 46% of McCain voters haven't changed their minds about Obama. I believe that the 53% approvals or so in the national news polls following the Tuscon Massacre may well be Obama's peak. I think it would take some incredible event (e.g., finding and killing Osama bin Laden) for Obama to go up from here. I think you'll see Obama slowly drifting back to 47-48% over the next few weeks.
Keep your eye in China; dry shipping statistics show the commodity imports into China slowing down. A China stock market correction could hit natural resource-rich economies (e.g., Australia, Canada, and South America) and trigger a global recession, exacerbating European economic difficulties. With Donald Trump and Rush Limbaugh joining Chuck Schumer on the China-bashing front, any kind of trade war will result in a lose-lose situation for the global economy.
Frivolous Abusive Lawsuits: Thumbs DOWN!
I intended to provide a recap of the US Chamber of Commerce's 2010 countdown of the worst cases of lawsuit abuse earlier, but there were intervening news stories. I've experienced my own form of legal system abuse which I will not describe here, but let's just say I've experienced the Alice in Wonderland situation of having to hire a lawyer, when I was the victim of a situation (there's a similar story summarized below in a different, far more tragic context). I firmly believe, with a passion, we need to have people or organizations whom abuse the legal system not only pay all related legal costs but be legally sanctioned.
The 2010 polls results are listed here (and I encourage readers to visit the source websites), but I'll summarize a few of those which particularly caught my eye:
- According to law enforcement in the Kalispell, Montana area, a girl, despondent and suicidal after an argument with her boyfriend (she explicitly hinted in text messages of an impending car accident), veered over the lane divider on an overpass at 85 mph and crashed into an oncoming vehicle, killing a 4-month pregnant, 35-year-old mother and her 13-year-old son. The girl, who survived the accident with permanent injuries, is suing the widower/father (and other parties) for loss of income and pain and suffering.
- A motorcycle driver in northern Idaho was stopped and subsequently charged with DWI given a blood alcohol of .16. He claimed that the real motivation for his arrest was an unconstitutional intolerance for his Native American religious beliefs: after stopping him, they deliberately opened and searched the contents of the medicine bag, which had been specially blessed by a medicine woman in 1995. The troopers, in opening and examining the medicine bag, had dissipated its mystical powers, making it worthless, and he is thus seeking $25,000 in compensatory damages.
- A mid-20's Los Angeles woman with a Blackberry cellphone was using the walk option to Google Maps for 2-mile distance directions between locations in upscale Park City, UT on a winter's night. The walking path included a 4-lane highway without usable sidewalks in either direction; thus, she walked inside one of the highway lanes when a driver, not seeing her in time, hit her. She is suing Google for alleged negligence, carelessness, and recklessness in not sufficiently alerting her that walking in a highway lane at night (never mind without the same types of precautions bicycle riders use, e.g., lights, reflective clothing, helmets, etc.) is dangerous. (After all, the Blackberry version of Google Maps does not include the general warning computer browser versions have, noting that pedestrian pathways or sidewalks may not available.... Surely if Google had squeezed that standard general warning in plain view on the Blackberry, the lady would have reconsidered her options...) [I have used various map services over the years (e.g., Mapquest, Yahoo, and Google), and all of them have occasional usability problems: wrong direction turn, misstated distances, etc.]
Political Humor
A few originals:
- Sasha Obama, the President's younger daughter, is learning Mandarin in school and decided to practice her new language skills on Chinese President Jintao. Her school has issued a denial that it is selling US Treasury bonds in a fundraiser.
- The celebration of President Obama's second anniversary (cotton) figured in the recent exchange of gifts between Presidents Obama and Jintao. Obama gave the Chinese President several bales of our best cotton, and Jintao presented Obama with cotton bedding, rugs, bath towels, curtains, and tablecloths. And a special discount on custom-made suits and monogrammed bathrobes.
Musical Interlude: One-Hit Wonders/Instrumentals
Herb Alpert, "Rise"
