Conclusion: It’s a long ways out, but President Obama looks more and more formidable heading into 2012. The key issue is that there does not appear to be a Republican contender. Or at least anyone that is willing to be considered such.
As of yet, no Republican candidate has declared that he or she is running for President in 2012. While the election is more than a year and a half away, the lack of decisiveness and early declaration may turn out to be an error by those candidates striving for the office. In contrast, President Obama seems to be gaining momentum in terms of his positive standing among the electorate.
We are big fans of the Intrade markets for politics. As we’ve witnessed in the past, they are often dead on in their ability to predict electoral outcomes and we saw this in spades with the recent midterm elections, as Intrade came very close to predicting the margin of victory in Congressional elections by the Republicans.
The futures contract on Intrade for President Obama to win the 2012 Presidential election is currently trading at 62. This means that if you were to buy the contract, and President Obama wins, your payout would be $38 on every $62 invested. As outlined in the chart below, this market has trended up since its inception in December of 2010, when the futures contract was trading at 50.
While the Presidential election is still more than a year and half away, this type of data must be disconcerting for Republican strategists, especially combined with some recent polls. In particular, a recent NBC News / Wall Street Journal poll, with the polling period of 2/24 – 2/28 indicated Obama a +5 versus the generic Republican candidates.
More broadly, while President Obama’s approval ratings are still mired in mediocrity, he has seen some improvement from his worst approval ratings of his Presidency. Currently, according to the Real Clear Politics Presidential Approval poll aggregate, 47.4% of respondents approve of President Obama and 48.0% disapprove. While this rating has gone the wrong way over the last few weeks in conjunction with accelerating gasoline costs and a U.S. equity market selloff, it is still well improved from the 51% disapproval rating on September 27, 2010, which was the worst reading of the Obama Presidency.
President Obama’s ratings are far from stellar, but so far they are holding stable despite a major setback for his party in the midterms and only modest economic improvement, especially as measured by employment, in the last year. A key benefit for Obama appears to be that there is no real frontrunner, or even a declared candidate for the Republicans yet. In the chart below, we show the poll aggregate for the potential Republican candidates, which validates the lack of a front runner.
In the 2008 Presidential campaign, shortly after the midterms, Presidential candidates began declaring in size. In fact, between November 2006 and February 2007, Joe Biden, Hilary Clinton, Chris Dodd, John Edwards, Dennis Kucinich, Barack Obama, Bill Richardson, and Tom Vilsack all declared their candidacy. In the same time period, almost as many Republicans officially declared their candidacy, including Tommy Thompson, Jim Gilmore, Sam Brownback, Mitt Romney, Ron Paul, John McCain, and Rudy Giuliani.
Currently, no Republican has officially declared his or her candidacy. This is somewhat surprising given the large amount of cash needed to fund a campaign, and the lead time needed to raise that cash. In addition, there is bully pulpit afforded to an official nominee. Surprisingly, so far no potential candidate has decided to take advantage of that potential media exposure and establish his or her credentials (and, of course, attack the President).
The other challenge for the Republican Party is that they do not appear to have a strong candidate at the moment. Currently Obama polls worse against a generic Republican than he does versus any of the perceived front runners. According to the Real Clear Politics poll aggregates, President Obama leads a generic Republican by 2 points, but leads Huckabee by 5.5 points, Romney by 5.2 points, Ron Paul by 9 points, Gingrich by 14 points, and Palin by 15.2 points.
Clearly, the longer the Republicans wait, the more of an incumbency advantage President Obama will have in the fall of 2012. As well, even if Republicans were to begin declaring for the Republican candidacy shortly, the other major concern from the polls is that no Republican currently seems viable.
Christie / Walker 2012… anyone?
Daryl G. Jones