Mixed signals

The GOP is touting a booming stock market, falling gas prices and low unemployment. But voters are far from convinced that good times are coming

October 29, 2006|By Laura Smitherman | Laura Smitherman,Sun staff

Not so long ago, if you wanted to be elected president you had better pay attention to the economy, stupid. More succinctly, the thinking went, if unemployment spikes, the incumbent party better watch out.

So, with the U.S. unemployment rate at a historically low 4.6 percent, Republicans should be able to count on an economically contented electorate as a bright spot in a generally bleak outlook on the eve of the midterm elections. Add to that a rising stock market in which the Dow Jones industrial average zoomed to levels never seen before and a steep drop in oil and gas prices after a summer of woe at the pump, and the GOP has its signature issue. Right?

Not exactly. While Americans are far less likely to cite the economy as the top problem facing the nation than they were just a few months ago, a majority still take a pessimistic view of the economic future, Gallup polls in recent weeks show. Political strategists say the glum outlook will blunt the effectiveness of Republicans touting the good fiscal news.

"The most prominent measure of which people are aware is the unemployment rate, and all things being equal, that could be expected to help the party in power, namely the Republicans," said Anirban Basu, head of the Sage Policy Group, an economic consulting firm in Baltimore.

"But rather than focusing on that," he said, "many people are focusing on other economic variables that suggest people are not as well off as they should be."

By some measures, wages have stagnated and the income gap between the rich and poor or middle class has widened. The national savings rate has gone negative as many people go deeper into debt. And financial planners warn ever more forcefully that Americans are not putting away enough for retirement.

Meanwhile, the housing market that made even the modest homeowner feel wealthy has slowed. And while the latest inflation numbers indicate the beast has been tamed, certain costs that weigh on voters' minds have skyrocketed, including those for college tuition and health care.

The economic issue, however, doesn't necessarily play into the hands of Democrats, political observers say.

"Democrats can't capitalize on this because they haven't put out a coherent platform on what it means and what they would do different," said Richard Clinch, director of economic research at the University of Baltimore's Jacob France Institute. "Republicans say taxes, regulation and lawyers are bad for the economy. Democrats don't have a mantra as simple as that."

In Maryland, where unemployment is lower than the rest of the country, Republican Michael S. Steele, who is challenging Rep. Benjamin L. Cardin for a vacant U.S. Senate seat, has criticized his own party for not raising the minimum wage and forgetting "folks still climbing that ladder." The message is appropriate for a candidate who casts himself as a Washington outsider in a Democratic-leaning state, but it also underscores widespread economic insecurities.

Steele is in a tough position on the economy because voters often filter their assessments of the nation's fiscal health through their views of the president, said James G. Gimpel, a professor of government at the University of Maryland, College Park. President Bush's approval ratings have been hovering below 40 percent, the worst for a president elected to a second term since Richard M. Nixon, who was at 24 percent before he resigned.

"Steele's trying to suggest to voters that he thinks for himself, that he's not in lock step with the president or the mainstream Republican Party," Gimpel said. He added that strong economic indicators and a "surging Dow" could serve to mitigate Republican losses and bolster Steele.

On the campaign trail, Steele talks about Maryland's jobs growth and his efforts as lieutenant governor to promote minority businesses, spokesman Doug Heye said. Cardin, a Democrat who also favors raising the minimum wage, has emphasized keeping jobs in America from being outsourced overseas.

Some of the same themes have been sounded in the Maryland gubernatorial race. Baltimore Mayor Martin O'Malley, who is challenging Republican incumbent Robert L. Ehrlich Jr., talks about affordable health care and rising college tuition, and the need to create higher-paying jobs. Ehrlich points to the state's low unemployment and poverty rates, and says he has worked to provide health care for low-income residents and to boost funding to colleges and universities.

A tight race in Virginia

In Virginia, which also enjoys unemployment below the national rate, candidates in a tight senatorial race are airing dueling TV spots. Republican incumbent George Allen has accused Democrat James H. Webb Jr., of wanting to "raise taxes on married couples and families with children." Webb has countered that Allen "voted to make college more expensive" and "allowed tax increases on your retirement savings." Both deny claims made in the other's ads.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.