Man Without Qualities

Wednesday, March 10, 2004

Pathetic ... And Bound To Lose VIII: What's Wrong?

Viking Pundit asks a very pertinent and interesting question: Why are these polls so close? Or, perhaps more precisely, why is President Bush at least arguably faring weakly in recent polls and why is a candidate as weak as John Kerry doing so well in those polls? The question is especially intriguing because Kerry's economic policies are ludicrous. Dick Morris thinks the whole thing can be corrected with a few camapign ads forcefully making the point that Senator Kerry is a flip-flopper. But I'm not convinced.

There seems to be substantial underlying economic anxiety. That's a little strange. Unemployment is just 5.6% and the number of "discouraged workers" is not unusually high - and the economy is definitely improving. (Although Mr Zogby says his polls show 21 per cent of probable voters are afraid of losing their jobs in the next 12 months - which may just be a consequence of people's understanding lagging the general economic improvement.) But some aspects of the current economy that have been touted as positives, such as the housing boom, also have aspects that could be generating considerable anxiety. Here's a sampling from Southern California, as reported by the Los Angeles Times:

First-time buyers — vital to the market's overall stability — made up just 30.6% of home purchasers in California last year, the lowest rate since the California Assn. of Realtors began tracking the data in 1981. First-time buyers provide the foundation for the rest of the market, because their purchases make it easier for existing homeowners to move up. .... Most economists predict that home prices in the region will continue to grow at a healthy rate for the foreseeable future. ....

Even as manufacturing and other industries have cut back in recent years, construction and other sectors tied to real estate, such as mortgage banking, lumberyards and home-improvement retailers, have added tens of thousands of jobs. Many consumers, meanwhile, have tapped their rising home equities for cash to support their hearty spending, adding further fuel to the economy in the Southland and elsewhere in the nation.

Anecdotal evidence suggests that the current frenzied pace can't be sustained. Glenda Estrada, a 29-year-old schoolteacher in Downey, recently bought her first home... [for] $295,000 .... Estrada's monthly payment soaks up half her income. "It just feels almost unfair that housing is this expensive," she said. ....

Nationally, six out of 10 households can afford to buy a median-priced home, based on incomes and mortgage rates, according to the National Assn. of Realtors. But in Orange and San Diego counties, the affordability rate has dropped to fewer than two in 10. It is slightly higher in Los Angeles County. Affordability in all three counties is lower than in Silicon Valley. ... In January, the median resale price surpassed $500,000 in Orange County. For all of California, the minimum household income needed to afford a median-priced home was $94,020 in January, versus $39,090 for the nation, according to the California Assn. of Realtors.

Of course, for current home owners who have no desire to "trade up" - the higher the better. But for everyone else....?

The political consequences of such anxiety can be addressed - and Mr. Kerry certainly offers no proposal that would make things better. But one must first isolate the source of such anxieties in order to address them. And I'm not convinced that ads calling Mr. Kerry a "flip-flopper" is going to do the trick.

UPDATE: Of course, lots of people are asking about those polls right now - and some of them have interesting things to say.

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