I’ve been copiously detailing lately how little progress (really, negative progress) Bush has been making on selling his Social Security plan. And that lack of progress is starting to make even him admit the truth (gasp!) or at least some of it about his Social Security plan. A Reuters story today reported that:
President Bush said on Wednesday he would not send Congress a specific plan to change Social Security because it would be “dead on arrival” and admitted his idea of personal accounts would not fix the retirement system.
Welcome to the real world, W! But as his Social Security plan sinks slowly in the west, is he making up for that probable failure with progress on other fronts? The economy, after all, has been “strong and getting stronger” for years, according to Bush, and we are now in the 40th month of the current recovery. Are people suitably delighted with the economy’s performance?
And how about Iraq? With the Iraq elections, a new, more moderate Palestinian leadership and signs of positive change in Lebanon, has the public now concluded that the Iraq war was a great idea and that Bush is doing a fine job in that area?
No and no. Take the economy first. In the new Washington Post/ABC News poll, Bush’s approval rating on the economy is just 43 percent with 55 percent disapproval. That’s his lowest rating on the economy in a year.
And a new Gallup report, “How Long Can Wall Street Diverge from Main Street?: Can the Economy Be Good for Investors, But Not for the Average American Worker?“, points out that:
Only 41% of American consumers say economic conditions in the country as a whole are “getting better” right now compared to 50% who say they are “getting worse.” This negative difference of 9 percentage points is the largest since last October, when there was a negative difference of 11 percentage points, with 39% saying things were getting better and 50% saying they were getting worse. It is also three times as large as the negative difference of 3 percentage points recorded a year ago (March 8-11, 2004).
The report concludes:
As the good news on household wealth reflects, many Americans have benefited as real estate values and the stock market surged. Even now as energy prices escalate, the value of energy related stocks has increased. As a result, it is not surprising that upper-income families are spending more not only on higher-priced necessities but also on other goods and services as well.
On the other hand, lower- and middle-income households have experienced little wage growth. They are being squeezed by higher gas/energy prices. And, they are increasing their debt — consumer debt increased 11% in 2004. As a result, they are also feeling the impact of higher interest rates even at today’s lower levels. According to a March Experian/Gallup Personal Credit Index poll, one in four Americans currently have some form of variable rate credit and one in five Americans say that they are already feeling the pinch of higher interest rates.
In the short term, it is possible for the economic outlook on Wall Street to diverge from that on Main Street. This remains a much better economy for higher-income investors than for average Americans. But, this divergence can’t continue for too long. At some point, the squeeze on middle- and lower-income Americans will slow the economy to such an extent that even Wall Street will feel the impact.
Guess Bush isn’t quite out of the woods on the economy yet. Turning to Iraq, his approval rating is now down to just 39 percent, with 57 percent disapproval–his worst rating ever in this area in this poll! This is despite the fact that people are now more confident (56 percent) than not (43 percent) that the Iraq elections will produce a stable, effective government in Iraq and that they believe overwhelmingly (67-25) that the Iraqi people are better off as a result of the invasion of Iraq.
But these positive views are apparently more than offset by continued qualms about the war itself and whether it has been worth the costs. By 53-45, the public still says the war in Iraq wasn’t worth fighting, given the costs versus benefits of the war for the US. By 70-27, they still deem the number of casualties sustained by the US unacceptable, given the goals versus costs of the war. And, by 54-43, the public still thinks we are bogged down, rather than making good progress, in Iraq.
And in a very telling question that has been asked in one form or another about every conflict the US has been involved in since Korea, the public now says US made a mistake (51 percent), rather than did the right thing (48 percent), in going to war with Iraq. That contrasts starkly with assessements of the Afghan war, where no more than 9 percent thought the war was a mistake and of the Gulf war, where no more than 21 percent thought that war was a mistake. Indeed, besides the Iraq war, only the Vietnam war itself has been assessed by the US public as a mistake in the last half century.
Based on this evidence, it doesn’t seem Bush can count on public appreciation for his job on the economy and Iraq to counterbalance his declining political support in the Social Security area. On the contrary: public views on the economy and Iraq seem likely to reduce his political leverage and make his already-daunting sales job on Social Security even harder.