President Obama’s approval rating has continued to bounce around low levels on the Rasmussen Presidential Tracking Poll. As of this morning, President Obama was ranked -11 on the poll, which is the difference between Strongly Approve and Strongly Disapprove. While this is above his lowest ranking of -15 on November 25th, his approval rating is showing no sign of bouncing meaningfully. In the Real Clear Politics poll aggregate, which is a rolling average of all major Presidential approval polls, President Obama now has virtually the worst approval rating of his Presidency at 49.3.
The rationale for this continued sinking popularity appears to be the popularity of President Obama’s primary landmark policies on healthcare and Afghanistan. According to Rasmussen, only 41% of those polled favor the plan proposed by President Obama and Congressional Democrats. As it relates to Afghanistan, only 37% of the American voters polled favor the new plan for Afghanistan. Obviously, President Obama can only be as popular as those issues or platforms that he is trying to aggressively advance, at least in the short term. Longer term, as it relates to his and the Democratic party’s popularity, there are other factors at play.
We have contended in the past that President Obama does have a shockingly high approval rating given the state of the economy and, in particular, unemployment. We’ve posted below a chart that graphs Presidential approval versus approval going back to the 1970s. There is a clear correlation between high unemployment and low approval. Interestingly though, the last time that unemployment was this high, that President, Ronald Reagan, had a broad approval rating that was in the mid-30s, which is well below Obama’s current rating.
Employment of course is but one factor relating to the economy. While declining unemployment will surely have some positive impact on President Obama’s approval rating, Professor Ray Fair, of Yale’s economics department, has done a great deal of working on predicting Presidential and Congressional elections and postulates that the two most important factors are: inflation and economic growth. Specifically, he looks at the growth rate of the GDP deflator as a sign of inflation and the number of quarters of GDP growth over 3.2% as a positive sign of growth.
Professor Fair has had very good success historically predicting elections, both mid-terms and Presidential, though has had some big misses as well, including President Clinton’s first victory over President George H.W. Bush. Accordingly, Professor Fair adjusted his model and realized that the economic memory of voters goes back more than one year, and that President Bush was hurt by a weak economy early in his term. Professor Fair’s models and work over the past four decades does tell us a little though about thinking about the future popularity of a President. Namely, both growth and inflation are key factors to consider and that stagflation, high inflation and low growth, is likely the worst economic scenario for an incumbent.
From an economic perspective, the Democrats will be faced with accelerating inflation if the fiscal policy remains loose domestically (and with it the dollar weak) and the potential that GDP comparisons are challenging in the back half of next year leading up to midterms. The worst case scenario is, obviously, that the growth we are seeing is not sustained, and the inflation environment for those goods prices in U.S. dollars – houses, commodities, agriculture goods, etc—continue to inflate because of the weak dollar.
Daryl G. Jones