Man Without Qualities

Monday, April 05, 2004

Close Election? Really?

One of the major reasons the Democrats have been willing to accept the huge risks inherent in their fussing about the 9-11 Commission and terrorism matters generally is their supposed desperate need to reduce the President's high favorability ratings on this issue. In contrast, Kerry and Democrats generally have supposedly been pleased with their public standing on domestic economic issues, which usually dominate presidential elections. The delusionally Democratic Los Angeles Times, for example, read its own press releases in the form of construing one of its notoriously inaccurate polls to come up with this analysis:

It is no secret that a lack of job creation has emerged as a pivotal election issue. But a new Los Angeles Times Poll suggests that Americans' pocketbook concerns extend well beyond the labor market, and the public thinks that Democratic presidential candidate John F. Kerry would better look out for their financial futures than would President Bush.

The Times poll also finds that by a whopping margin of 19% voters think the country is "on the wrong track" - a sentiment generally (but not always) dominated by domestic economic considerations.

As a preliminary matter one should question whether such poll findings could possibly be correct. Even the Times poll finds that voters approve of the President's job performance by 7% - which creates quite a dissonance with the "on the wrong track" finding. There there is the President's small and growing lead in almost all polls (although not the Times poll).

But, more importantly, there is a much bigger problem coming for Senator Kerry and Democrats and other doomsayers generally. Despite the fondest hopes of the Times and other such organs that Americans' pocketbook concerns extend well beyond the labor market, and ... that Democratic presidential candidate John F. Kerry would [be] better, it is in fact the case that the domestic economy is generally becoming an issue "owned" by the the President - not John Kerry.

If so, such a shift would be a big change in much current conventional wisdom (expressed, for example, by Dick Morris) that this election is and will remain really about two big competing issues: (1) the economy, to the favor of Senator Kerry and (2) terrorism, to the favor of President Bush. Supposedly we were doomed to go through an election cycle in which those issues were assigned firmly to their respective candidates and their parties, and the big question would be: In November, which issue will dominate in the public mind? Terrorism? - in which case President Bush would be re-elected. Or the domestic economy? - in which case we would see a President Kerry.

One month of employment numbers do not an economic boom make - but 308,000 new jobs in March is significant. Also, I have pointed out in prior posts that the Department of Labor methodology is probably tending to systematically understate jobs creation. That has not changed, and if revisions to that 308,000 number are needed (which will almost certainly be the case), it is more likely that it will be an upward revision - as the January and February employment numbers were just revised upward.

That the recent employment numbers are not a fluke, will not be revised downward and, in fact, mark a distinct upward trend probably good for at least the seven month run-up to the election is also suggested by the new readings from the Institute for Supply Management's non-manufacturing index:

The U.S. services sector grew well above expectations to hit a record high in March, a report showed on Monday, offering more evidence that the economy's recovery is gaining traction. The Institute for Supply Management's non-manufacturing index surged to 65.8 in March, a 12th straight monthly increase, from 60.8 in February. Wall Street economists had forecast a rise to 61.5. A number above 50 indicates growth. .... Services include everything from restaurants and hotels to banks and airlines and accounts for about 80 percent of the U.S. economy. The survey's employment index rose in March to 53.9 from 52.7 in February. Growth in demand for new orders rose to 62.8 in March from 60.3 in February.

Of course there is no guaranty that the economy will continue to accelerate through October, but it's looking very likely. The traditional view has been that a good six months of good economic performance prior to election day will deeply penetrate the voters' minds. The remaining seven months should do nicely.

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