'08's Economic Woes to Hit Republicans Hard

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Many think the '08 elections will be all about Iraq. They are wrong. A co-equal issue for voters in '08 will be pocketbook issues. The current sub-prime mortgage debacle has spill over effects that are going to hit millions of voters with either pocketbook losses or pocketbook anxiety.

A majority of voters have never bought into the Bush administration's rosy economic rhetoric. But, now, growing percentages of them are workers being laid off; companies are paring back, consumers are hitting Wal-Mart's and Home Depot's revenues negatively, and health care continues to eat bigger chunks of paychecks. GDP is now projected between 2.4 and 2.7 percent, and more bears are throwing the Recession word around (inappropriately, I might add.)

But, one worker's lay off influences political perceptions for far more than the worker themself. A Politco article by Mike Allen entitled: Pocketbook worries coming to forefront says: "financial security - will be central to next year's presidential race." It is important to note that this sub-prime debacle is not likely going to hurt the Wall Street crowd significantly. Many of them are calling the retrenchment in the markets a welcome opportunity and return to fundamental valuations.

But the spill over effects are hitting automobile sales, home sales, home improvements, and increasing numbers of employees in the mortgage industry, small home contractors, Home Depot and Lowe's, are going to be out of work as these industry's operations are pared back as a consequence of tighter credit, and lower consumer sales. Add to that escalating health insurance premiums, other out of pocket medical costs, further erosion in pension plans and the looming threat to Social Security sustainability at current levels, millions and millions of voters in 2008 are going to be hard pressed to approve of Republican's economic policies still intact.

Congress' approval rating dropped to 18% this last week. But, as bad as that sounds, potentially valid arguments are being made that this will not hurt Democrats in the '08 elections. It has been readily accepted that Democrats will gain seats in the Senate because of 3 times more Republicans up for election than Democrats, exposing Republicans to more losses of incumbents seats than Democrats. But, until very recently, Republicans actually saw the potential of recapturing the House. That potential has been dramatically diminished in the last several months as a wave of Republican representative retirement announcements have unpredictably taken place.

Josh Kraushaar and Patrick O'Connor of Politico wrote an Aug. 16 article revealing this unanticipated blow to Republican prospects entitled: Dems' chances to boost House majority surge. They write:

The retirements come at a time when the National Republican Congressional Committee is lagging well behind the Democratic Congressional Campaign Committee in cash on hand and can ill afford too many retirements in competitive congressional districts.

Republicans need to pick up 16 seats to win back the House, and every new tight race makes it more difficult for them to do that.

Some more Republican incumbents are involved in accusations of scandal, hurting their prospects further. Public sentiment is very negative on Congress, but, it would be surprising indeed if Republican's internal polls were not showing diminishing prospects for public support of Republicans in 2008 for White House, Senate, and House seats. The logic here is that if the public is disappointed by the Democratic Congress' inability to halt Republican's "stay the course" policy in Iraq, the answer is to remove Republicans from Congress. Additionally, the majority of the working middle class public has maintained a dim view of the wealthier getting wealthier as their own real wages erode from inflation in health care and energy costs and low wage growth. The current financial insecurity simply reinforces the dim view of Republican economics these last several years.

Some pundit writers, this one included, predicted an upset in 2006, on the basis of the exodus from the registered Republican voters to Independent status, in greater numbers than occurred for Democrats. There is nothing in the current news environment to warrant altering that same prediction for 2008. Of course, it these predictions are proved valid, it means America will suffer another one party government, including the likely potential of shifting the Supreme Court back to a 5/4 liberal philosophical bent.

There is though, another scenario, far less likely, but, greater than ever before, that public sentiment toward both Democrats and Republicans sours to the point that Democrats still pick up seats, but, an unpredictable number of Democrat incumbents also lose their bid. The anti-incumbent sentiment continues to grow, and Independent registered voters rolls continue to grow. This constitutes a major wild card, with a remote chance of altering the perceived trend today of a Democratic landslide victory in 2008.

I personally don't believe this will happen in 2008, however, it will become more likely with each election, and may become probable by 2012 or 2014's elections. That will coincide with the Social Security and Medicare crisis coming to dominate nearly all other political issues, as the national debt exceeds 11 to 12 trillion dollars, more than double 2000's. Reality in 2014 will hit like a ton of bricks and both of the duopoly parties and their incumbents will be held to political account as never before. Especially if a number of popular or, known, independent centrists and moderates rise to candidate levels.

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This page contains a single entry by David R. Remer published on August 23, 2007 3:43 PM.

Bush: 58,196 U.S. Dead in Viet Nam Not Enough was the previous entry in this blog.

A.G. Gonzalez Resigns is the next entry in this blog.

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