Thursday, February 19, 2009

Optimism About Obama Is the Only Optimism Out There

By Stuart Rothenberg

Often, when a new president or a new political party takes control of government, an uptick in public sentiment follows.

So it shouldn’t be surprising that there is some evidence of a small spike in optimism about President Barack Obama and the future. What’s stunning, however, is the growing economic pessimism, both on Main Street and Wall Street, and it is that pessimism that could eventually add to the woes of most officeholders.

Numerous polls show the president with strong personal and job-approval ratings.

A CBS News poll conducted Feb. 2-4 found 55 percent approving of Obama’s handling of the economy, and a Feb. 4-8 Pew Research Center poll found an almost identical 56 percent approved.

A Feb. 7-8 CNN/Opinion Research survey found Americans see the president as a strong leader who so far has done a good job handling foreign policy, policies on terrorism and the economy. Even though the public is worried about the future, they like Obama and have confidence in him.

Polls also show more people are upbeat about the future. A Feb. 9-12 Research 2000 poll for the liberal Democratic Web site Daily Kos showed 35 percent of respondents saying the country is headed in the right direction — a significant increase from the 26 percent who gave the same answer in early January.

CBS News surveys also found an uptick in sentiment from December (12 percent “right direction”) to early February (23 percent “right direction”).

But optimism about the president and his economic agenda seems to be based solely on his communication skills, his personal appeal and the public’s hope for a turnaround.

When Obama promised an audience in Peoria, Ill., last week that “once Congress passes this [stimulus] plan, and I sign it into law, a new wave of innovation, activity and construction will be unleashed all across America,” he was merely cheerleading.

In fact, nobody knows if that is true. The stimulus package is something of a crapshoot, and whether it will work or ultimately add to the nation’s woes is a mystery.

Other than among Democrats who are delivering the party’s “message,” pessimism abounds about the economy.

Even Obama, during last week’s press conference, asserted that the country was in a “full-blown crisis,” echoing his previous warnings since he won the presidency in November. Indeed, that assessment is the basis for his insistence on quick passage of a stimulus bill.

The ABC News Consumer Comfort Index hit a 23-year low in early February. Over four weeks ending Feb. 8, 2009, only 4 percent of the 1,000 adults surveyed rated the U.S. economy positively, while 96 percent rated it negatively.

Unemployment continues to rise (with almost 600,000 jobs lost last month), and nobody expects that to change anytime soon. Nobody knows how high it will go, but with additional layoffs announced virtually every day, it looks certain to climb from its current 7.6 percent rate to well over the 8 percent mark soon. Many think unemployment will continue to rise at least into the fourth quarter of this year and probably into early 2010.

The stock market continues to tank. Yes, it has its up moments (the Dow Jones industrial average almost made up a 246-point drop in the final 60 minutes of trading on Thursday), but the Dow continues to flirt with the 7,800 level, and it is difficult to find veteran stock pickers who are recommending many stocks at the moment. Caution remains the word.

At his press conference last week, Obama had assured viewers that “my Treasury secretary, Tim Geithner, will be announcing some very clear and specific plans for how we are going to start loosening up credit once again,” but most Wall Street observers found Geithner’s presentation neither clear nor specific.

Indeed, on CNBC on Thursday afternoon, veteran watchers of the economy and stock market concluded that Wall Street “has lost confidence in Timothy Geithner” just a few weeks into his tenure and just days after his widely panned financial rescue program was released.

All of this means that the public’s honeymoon with Obama is alive and well and likely to last for an extended period, but that not everyone in the public eye will be so lucky.

The underlying weakness in the economy, and the crucial growing pessimism both in financial circles and the country at large, will certainly take a political toll on some officeholders in the near term. The public will want its scapegoat before the end of the year if no economic turnaround appears.

This column first appeared in Roll Call on February 17, 2009. 2009 © Roll Call Inc. All rights reserved. Reprinted with permission.