OBAMA'S ISSUES CRUMBLING

At last, there is convincing evidence that Obama's poll numbers may be descending to earth. While his approval remains high -- and his personal favorability is even higher -- the underlying numbers suggest that a decline may be in the offing. Even as he stands on his pedestal, the numbers under his feet are crumbling.

According to a Rasmussen poll, more voters now trust Republicans more than Democrats to handle the economy, by a margin of 45-39. Scott Rasmussen notes that "this is the first time in over two years of polling that the GOP has held the advantage on this issue." Last month, he had the Democrats holding a one-point lead, but they lost it in June's polling.

And the Democratic leads over Republicans on their core issues are also dropping. Particularly interesting is the Democratic decline over healthcare, from an 18-point lead in May to only 10 points now.

A Gallup poll also confirms that the president's personal ratings are high, but the underlying data less so. While 67 percent of voters give Obama personal favorable ratings and 61 percent approve of his job performance (Rasmussen has his job approval lower, at 55 percent), they give him much lower ratings on specific issues.
Gallup shows Obama getting only 55 percent approval on his handling of the economy (down from 59 percent in February) and finds that only 45 percent approve of his handling of federal spending while 46 percent approve of his treatment of the budget deficit.

As it becomes clearer that the deficit caused by spending has landed us in a new economic crisis, entirely of Obama's own making, his popularity and job performance are likely to drop as well.

The old recession -- that the public says was caused by Bush -- shows signs of winding down. But the new recession and/or inflation -- triggered by Obama's massive deficits -- is just now coming upon us.

If Obama refuses to cut back on his spending/stimulus plans (despite convincing evidence that Americans are not spending the money), he has three options:

a) He can raise taxes, which will trigger a deeper recession;
b) He can print money, which will trigger huge inflation;
c) He can pay more interest to borrow money, which will send the economy diving down again.

The blame for these outcomes will fall squarely on Obama's deficit and spending policies. The fact that Americans are aware of these issues, and already disapprove of Obama's performance on them, indicates that they will be increasingly receptive to blaming him for the "new" recession.

Interestingly, Obama's polling is now the exact opposite of President Clinton's in the days after Monica Lewinsky. Back then, the president's approval for handling specific issues was his forte, while his job approval remained high but his personal favorability lagged 20 points behind. Ultimately, it is a politician's performance on specific issues that determines his electability. Personal favorability withers in the face of issue differences. Obama is about to find out that you cannot rely on image to bolster your presidency when the underlying issues are crumbling.

All this data suggests that Obama might run out of steam just as he gets to his healthcare agenda. As unemployment mounts, month after month, and Obama's claims of job creation (or savings) ring hollow, it is possible that he will not have the heft to pass his radical restructuring of the healthcare system. The automaton Democratic majority may pass it anyway, but it will be a one-way ticket to oblivion if they do.

By EILEEN MCGANN AND DICK MORRIS – Dick Morris.com – Dick’s new book: Catastrophe

Posted: Daily Thought Pad

WHAT'S KEEPING OBAMA UP? - THE ULTIMATE REALIZATION THAT THE CURE WAS WORSE THAN THE DISEASE

The Rasmussen poll conducted over the weekend of May 30-31 asked a key question designed to give us perspective on Obama's current popularity. The question was whether the current problems "are due to the recession that began under the Bush administration or to the policies Obama has put in place since taking office." In other words, who's to blame, Bush or Obama?

(For now) By 62-27, voters say Bush is still the culprit.

As long as this opinion remains prevalent, Obama will continue to enjoy high popularity. But when it changes, as it inevitably must, we will see him begin a long, long fall.

And this is the key measurement to watch.

The real recession -- dating from the stock market collapse -- began four months before Bush left office. And it is now four months since Obama was inaugurated. From this vantage, it still looks to voters like Bush's recession.

But it will become increasingly obvious that the large deficit Obama has incurred while pursuing his cure for the recession is, on its own, causing more problems than it solves. As high interest rates and, most likely, inflation, begin to set in -- with no relief in unemployment -- it will be obvious that Obamanomics isn't working and is, in fact, aggravating the economic trouble.

Obama, recognizing the danger, has recently begun to speak out -- without even cracking a guilty smile -- against the huge budget deficit he created. He is trying to blame the deficit, too, on Bush. But voters will not overlook the huge spending sprees of January and February, when Obama quadrupled the 2009 deficit. They will come to see that spending as a huge mistake and will shift their blame to the new president who proposed it.

Obama now faces a choice of poisons.

He can leave taxes as they are and take the poison of high interest rates, rapid inflation and a new recession, all caused by the massive borrowing he has forced on the Treasury. If the Treasury cannot sell enough bonds at a reasonable interest rate, it will, of course "monetize the deficit" -- economics-speak for printing money so that there will be enough to buy the Treasury debt at moderate interest rates. But the process of so vastly expanding the money supply (or even just leaving the current expansion in place without trying to soak up the extra money) will cause its own runaway inflation.

Or Obama can break his pledge and raise taxes on everybody. His soak-the-rich approach will not be enough to cover the deficit. Especially when one factors in his healthcare proposals, big tax increases on the middle class become an increasing likelihood. And when we consider his cap-and-trade legislation, huge increases in utility rates also loom.

Either poison will make it clear that the economy is suffering from the medicine Obama administered, rather than the original disease that started under Bush.
And, of course, while we cannot predict precisely the start date of the Obama-generated misery, it's pretty clear that it will be a long-lasting pain. Neither inflation nor the pain of higher taxes is going to go away soon. And either approach will probably kindle a new recession.

Some economists think we will have an L-shaped recession from which we do not emerge for years and years. Others think it will be a W-shaped recession (not Bush's W) in which we emerge briefly and then go back down again. But a U-shaped recession, in which we go down and then come bouncing back, probably cannot happen with Obama's deficits now firmly in place. Then it will become clear that the cure was worse than the disease.

By: DickMorris – Dick’s new book: Catastrophe