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The role of Disposable Income in elections is considered by some the only reliable predictor of elections.  If people are hurting, they take their anger out on incumbants.  Compared to 1994, President Obama is lagging what was then an unthinkable Republican House takeover. 

Not that Obama needs any more trouble but the opposition effort to turn the Sestack Jobsgate failed.  I think they will try again.  Scandal typically hunts a President in his second year in office.  I guess it takes that much time to dig something up by the opposition.  Maybe the Elliot Spitzer scandal was just Republican legislators good fortune, butt does seem odd that the "steamroller" Governor was caught in March of 2008, in his second year in office. 

The turn to Deficit Hawkishness that seems to be bubbling up from the White House is maybe a pre-emptive move toward support.  That is not a good turn for healthcare.  A tougher stance on deficits and healthcare spending is not a good scenario.  Particularly, if the cost savings initiatives I heard about yesterday are being widely adopted.

The conclusion appears to be that while cost savings are already being sought in this difficult operating environment, expect more if the Obama's move toward the Deficit Hawks.  Given what Disposable Income is suggesting, he'll have to get very hawkish.

Thomas Tobin

Managing Director

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