President Obama hasn’t quite solved the “Are you better off?” problem. His recent ad poses the question and reminds voters of how bad things were in 2008 but never answers affirmatively. The ad zips past a response and changes the topic, telling voters: “We’re not there yet, but the real question is, ‘Whose plan is better for you?’” I thought the question was “Are you better off?” It is remarkable that not even an Obama ad can say you’re better off than you were when he took office.
Pollsters have found again and again that voters don’t think they are better off and resent being told otherwise. This is obviously still an issue, which an ambiguous ad may only highlight.
Now pollsters and political watchers have noted that while it is still sharply negative, the right track/wrong track spread for Obama has improved most recently. The Democrats would like to believe this is a permanent recognition that, by gosh, we are heading in the right direction. Republicans will say it’s a bit of the afterglow from the Democratic National Convention (both in making voters feel better and in getting Democrats to pick up the phone when pollsters call).
Who’s right? We will have a better idea in a week or so if the right turn/wrong track number floats back down to pre-convention levels.
Some argue that because home prices and the stock market are up since Obama took office, people actually are feeling better about their economic status and therefore think we are making more progress. However, there are as many negative signs, ones that are readily felt by not just stock market investors but by average voters, pointing in the opposite direction. There is unemployment (above 8 percent for 43 months). There are gas prices, which are more than $2 higher than when Obama took office. Overall, remember that the consumer price index went up 0.6 percent in August, so average families are feeling the pressure from higher prices.
The figure that ties this all together is household net worth. Bloomberg reports: “Household wealth in the U.S. dropped from April through June as stocks prices declined, overshadowing a second consecutive gain in home prices. Net worth for households and non-profit groups decreased by $322 billion in the second quarter, or 0.5 percent from the previous three months, to $62.7 trillion.” When families feel poorer they spend less, particularly on high-dollar items for which they need to borrow.
Will QE3 re-inflate stock portfolios, boost net worth and help maintain a sunnier outlook on the economy? Maybe. But it is just as likely that continued tepid growth, high unemployment and consumer price hikes (which will also be goosed by the quantitative easing, to some extent) will be pulling the other way. In short, there is an economic reality that the broad mass of voters really can’t ignore. The gravity exerted by that economic reality is likely to pull the right track/wrong track numbers back down for Obama, unless, of course, the economy does show an uptick in growth and job creation before the election.