Obama Is in More Trouble Than You Think

By James Pethokoukis, AEI Ideas - July 19, 2012

A daisy chain of political disaster seems to be forming for President Obama, says political analyst Dan Clifton at Strategas Research. Clifton suggests that “there seems to be a relationship between consumer confidence and whether a president gets reelected. The current levels of confidence are consistent with Carter and George H. W. Bush when they lost reelection.”

That conclusion is displayed in the above chart.

And Clifton’s reasoning is based on the following three charts:

1. Small firms are becoming increasingly more concerned about taxes and regulation and less about sales in recent months. And these are the firms that create the bulk of net new jobs in America.

2. The Economic Policy Uncertainty Index has been sharply increasing in recent months, and that has been leading consumer sentiment.

3.The relationship between economic policy uncertainty and consumer confidence has held over time.

 

The U.S. Consumer Confidence Index (CCI) also should worry the Chicago team. This June it dropped to 62.

The election year October CCI for 3 previous incumbents who lost were

1992: 57.3 1980: 80.3 1976: 87.1

June 2012: 62 October 2012: probably under 50

The lowest CCI under which incumbent has won was 96.7 for GWB.

Considering that June 62 CCI, might turn to under 50 CCI by October like after two previous summers of recovery, no wonder Obama campaign is getting desperate.

The two previous summer of recoveries have brought consumer confidence down from the early summer compared to October.

http://www.tradingeconomics.com/united-states/consumer-confidence

2010: June 62.7 -> October 48.6 2011: June 61.7 -> October 46.4

So if after this summer of recovery, the June 62 turns into 45-49 in October

“Clifton suggests that ‘there seems to be a relationship between consumer confidence and whether a president gets reelected. The current levels of confidence are consistent with Carter and George H. W. Bush when they lost reelection.’”

No idea why he would suggest that. The sample size is 8 and the margin of consumer confidence deviation isn’t particularly large, not to mention two of the presidents on the graph have bucked the supposed “trend”

“Small firms are becoming increasingly more concerned about taxes and regulation and less about sales in recent months. And these are the firms that create the bulk of net new jobs in America.”

Not seeing that trend either. Taxes is effectively staying the same while Regulation is trend up slightly but that’s bound to happen when concern about sales is finally crashing which, to me, signifies good things to come.

“The Economic Policy Uncertainty Index has been sharply increasing in recent months, and that has been leading consumer sentiment.”

The EPUI is all over the place and its wild fluctuations are clearly cyclical based on the last graph. The EPUI just crashed recently and CS shot up right with it. What’s happening now seems like a pretty natural fluctuation to me and I wouldn’t be surprised at all to see it spike and crash again before November.

Ergo the personal attacks to divert focus on the economy. since BHO has abandoned the undecided the question is can he an holder stall the efforts of the states to remove illegal aliens from the voter rolls long enough to “create” votes from his base and new found base?

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