THE BLOG
08/16/2010 04:01 pm ET Updated May 25, 2011

Ground Zero, Waters and Wikileaks - The Democrats' Wasted Week

The President made the inexplicable decision to enter the fray on the Ground Zero mosque controversy this weekend and within 24 hours did a walk-back on the issue. The Sunday talk shows were abuzz. Our take this Monday morning is pretty straightforward:

  1. Why would the President make a statement on the mosque at all? You get the sense that this White House and this President feels as though they need to be part of every public dialogue. They seem to have difficulty remaining focused.
  2. The White House is still wasting news cycles on unimportant skirmishes when it should be all about the economy and jobs (and perhaps some defense of the conduct of the war).

Democrats may be shaking their collective heads this morning and for good reason. Let's start by taking time to reflect on last week and the political state of play.

Who would have guessed that a week in which the Gulf oil leak had been finally and officially sealed would be one that Democrats and the White House would view as a complete disaster? Last week began with myriad "double-dip recession" stories on the heels of the August 6th unemployment report. Then Democrat Charlie Rangel took the floor in defense of his ethics charges and by week's end Democrat Maxine Waters did the same. Along the way, Wikileaks announced yet another tranche of released documents: 15,000 of them highlighting problems with the war in Afghanistan, thereby further eroding public confidence in our engagement there. In short, last week was a very bad one for Democrats, and it's unclear whether things are going to look up for them any time soon.

Here is our up-to-the-minute take on the current political environment:

1. The "double-dip" recession has become a self-fulfilling prophecy. This has been a "go to" media story for more than a month and the public has finally bought into it. According to a July Democracy Corps survey, only 35% of voters said the economy was improving. This was down from 45% in April. Additionally, 35% said that the economy was "getting worse" and 25% said it had "bottomed out." More economists came out last week arguing that we were indeed in a double dip. Our sense is that the public will be convinced of this by September and consumer confidence (already low) will drop even further, making the double-dip all but inevitable.

2. The economy remains the elephant in the room and will be the defining issue in November. What is especially problematic for Democrats is that there is an increasing body of empirical evidence to suggest that the economy is actually getting worse. This of course seems self evident, but when you see some of the arguments being made on the campaign trail you might think otherwise. The indicators are substantial:

a. Real GDP growth has slowed each of the past two quarters (3.7% in Q1 then 2.4% in Q2) after a seemingly-strong 2009 Q4 (5.0%).
b. Meanwhile, the CPI has been negative for the most recent three months, suggesting the possibility of deflation.
c. The unemployment rate has held in the 9.5 - 10.0% range after peaking at 10.1% last October, registering at 9.5% for both June and July. However, because of seasonal adjustments and a reduction in the labor force--it has been shrinking since mid-2009--the headline unemployment number does not show the underlying contraction in jobs in the past two months. After growing throughout the first four months of 2010, job growth was virtually flat in May and the household survey registered losses measured at 301,000 in June and 159,000 in July.
d. The Consumer Confidence Index also dropped sharply in July (to 50.4), down from 54.3 in June. From the release:

Those claiming jobs are "hard to get" increased to 45.8 percent from 43.5 percent, while those saying jobs are "plentiful" remained unchanged at 4.3 percent. Consumers' short-term outlook also deteriorated further in July. The percentage of consumers expecting an improvement in business conditions over the next six months decreased to 15.9 percent from 17.1 percent, while those anticipating conditions will worsen rose to 15.7 percent from 13.9 percent. Consumers were also more pessimistic about future job prospects. Those expecting more jobs in the months ahead decreased to 14.3 percent from 16.2 percent, while those anticipating fewer jobs increased to 21.1 percent from 20.1 percent. The proportion of consumers expecting an increase in their incomes declined to 10.0 percent from 10.6 percent.

3. President Obama may in fact be losing the confidence of the American people. Surely the economic crisis was a primary driver of this decline, but it is also came from the Gulf oil spill and the perceived execution of the ongoing war in Afghanistan. A recent Washington Post/ABC News poll indicated that "nearly six in ten voters say they lack faith in the president to make the right decisions for the country," and two thirds say they "are disillusioned with or angry about the way the federal government is working." Nearly 6 in 10 said they did not have "confidence" in Obama's decisions. 4. With the exception of a few select races, the Tea Party is largely irrelevant in this upcoming election. Contrary to what Eugene Robinson and other pundits have argued, the elections this November are not going to be a referendum on the "wackiness of the Tea Party." Yes, controversial statements and policy positions will have some impact on individual races (think Sharron Angle in Nevada or Rand Paul in Kentucky) but this election is about the economy, and it will be a referendum on the President and the party in power; it really is that simple. And no amount of pontificating on the zaniness of the Tea Party movement will trump that fact. 5. The fact that there is no real "face" of the GOP may actually be a help in November. While the DNC and Democratic strategists have tried to make the Tea Party and Sarah Palin the face of the party, it simply isn't working. This is not 1996 (post-government shutdown) when Newt Gingrich became an albatross around the neck of the GOP and Bob Dole. Rightly or wrongly, Newt became a negative symbol for the Democrats to hang their hat on. In this economic environment that will not stick. 6. If the country's "wrong track" numbers remain where they are--they have averaged approximately 59% for the year--this will be one of the worst five year periods since Watergate, a debilitating scenario for the President and Democrats this fall. The data is what it is: only three in ten Americans believe the country is going in the right direction. And in many battleground states it is even worse than that.
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As the mosque controversy draws valuable time and energy from the White House, the voters are still focused where they have been for 2 years: on a very weak economy with few hopeful signs. This is the issue for the mid-terms and the President and Democrats need to get a handle on it in the next 30-60 days or there may be catastrophic electoral consequences in November.

Thanks to John Zirinsky and Peter Ventimiglia for their thoughts and insights. Follow us on Twitter @lcgpolling.