Bonsai from the Right: Jan 21, 2010

Thursday, January 21, 2010

Obamas Real Approval Ratings

A columnist for the Boston Globe believes that unless President Obama makes some changes to his political agenda quickly, his party will experience a "bloodbath" in November.

Jeff Jacoby at the Boston Globe says Republican Scott Brown's convincing victory Tuesday for the U.S. Senate makes it clear that even in the "bluest of Blue states," no political seat is guaranteed forever. He says Democrats in Washington are now forced to realize that they too could be challenged and potentially dislodged from office.
"This wasn't as much a Republican victory as it was, I think, a backlash against Democrats and against a style of governance that President Obama and Democratic leaders in Congress have been pushing very hard and in a very partisan way over the past year," states the columnist.
Jacoby writes in a new column that Democrat Martha Coakley's loss in the special Senate election in Massachusetts may actually be a blessing in disguise for President Obama.
"I think that this is a chance for him to think very hard about the way he has governed so far and to read the writing on the wall," he suggests, "and to recognize that unless he wants his party to go through a bloodbath in the mid-term elections this November, he needs to make some changes -- and he needs to make them quickly. If he does that, then I think that the brightest days of the Obama administration may still be to come."

Obama's popularity

According to Gallup, no president beginning his second year in the White House has been as unpopular as Obama currently is. The polling group sees "obvious political peril" for the president in decreasing public approval.

"When presidents' approval ratings have been below 50 percent in a midterm election year, their party has tended to suffer heavier seat losses," states a Gallup report.

After averaging a 57-percent job approval rating during his first year in office, recent numbers (Oct. 20, 2009 - Jan. 19, 2010) have generally hovered around the 50-percent mark, notes Gallup (see graph below).

Obama job approval (Gallup) (Feb09-Jan10)

Now while Progressives are going around town bragging that Obama has an approval rating of 56% all the other polls put Obamas approval around or under 50%.

First Time America Isn't Ranket #1 In Economic Freedom This Year The Democrats Took Us Down To #8

World Rank: 8 Regional Rank: 2 of 3

Ten Economic Freedoms of United States

91.3	Business Freedom	Avg 64.6	75.0	Investment Freedom	Avg 49.0
86.9	Trade Freedom	Avg. 74.2	70.0	Financial Freedom	Avg 48.5
67.5	Fiscal Freedom	Avg. 75.4	85.0	Property Rights	Avg 43.8
58.0	Government Spending	Avg. 65.0	73.0	Fdm. from Corruption	Avg 40.5
78.1	Monetary Freedom	Avg. 70.6	94.8	Labor Freedom	Avg 62.1

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Quick Facts

Population:

304.1 million

GDP (PPP):

$14.2 trillion
1.1% growth
2.2% 5-year compound annual growth
$46,716 per capita

Unemployment:

9.4%

Inflation (CPI):

3.8%

FDI Inflow:

$316.1 billion

The United States’ economic freedom score is 78.0, making its economy the 8th freest in the 2010 Index. Its score is 2.7 points lower than last year, reflecting notable decreases in financial freedom, monetary freedom, and property rights. The United States has fallen to 2nd place out of three countries in the North America region.
The U.S. government’s interventionist responses to the financial and economic crisis that began in 2008 have significantly undermined economic freedom and long-term prospects for economic growth. Economic freedom has declined in seven of the 10 categories measured in the Index.
Uncertainties caused by ongoing regulatory changes and politically influenced stimulus spending have discouraged entrepreneurship and job creation, slowing recovery. Leadership in free trade has been undercut by “Buy American” provisions in stimulus legislation and failure to pursue previously agreed free trade agreements with Panama, Colombia, and South Korea. Tax rates are increasingly uncompetitive, and massive stimulus spending is creating unprecedented deficits. Bailouts of financial and automotive firms have generated concerns about property rights.

Background Back to the top

The U.S. economy is the world’s largest. Services account for more than 70 percent of economic activity, but the U.S. is also the world’s largest producer of manufactured goods and fourth-largest producer of agricultural products. A federal form of government that reserves significant powers to states and localities has encouraged diverse economic policies and strategies. The national government’s role in the economy, already expanding under President George W. Bush, has grown sharply under the Administration of President Barack Obama, who took office in January 2009. Economic growth, which collapsed in 2008, had resumed by the second half of 2009, but legislative proposals for large and expensive new government programs on health care and energy use (climate change) have increased prospects for significant economic disruptions and raised concerns about the long-term health of the economy.

Business Freedom91.3 Back to the top

The overall freedom to start, operate, and close a business, regulated primarily at the state level, is still strongly protected. Starting a business takes six days, compared to the world average of 35 days. Obtaining a business license takes less than the world average of 218 days. Bankruptcy proceedings are very easy and straightforward.

Trade Freedom86.9 Back to the top

The weighted average U.S. tariff rate was 1.5 percent in 2008. Anti-dumping and countervailing duties, domestic preferences in government procurement, high out-of-quota tariffs, services market access restrictions, import licensing, restrictive labeling and standards, and export-promotion programs and subsidies add to the cost of trade. Ten points were deducted from the U.S. trade freedom score to account for non-tariff barriers.

Fiscal Freedom67.5 Back to the top

U.S. tax rates are burdensome. The top income and corporate tax rates are 35 percent. Other taxes include an estate tax and excise taxes. Additional income, sales, and property taxes are assessed at the state and local levels. In the most recent year, overall tax revenue as a percentage of GDP was 28.3 percent.

Government Spending58.0 Back to the top

Total government expenditures, including consumption and transfer payments, are relatively high and rising rapidly. In the most recent year, government spending equaled 37.4 percent of GDP. Spending increases totaled well over $1 trillion in 2009 alone, an increase of more than 20 percent over 2008. Stimulus spending set for the next three years is estimated to equal 5 percent of 2009 GDP.

Monetary Freedom78.1 Back to the top

Inflation has been relatively low, averaging 3.5 percent between 2006 and 2008. The Federal Reserve cut the interest rate on federal funds to near zero in December 2008, with low rates persisting through 2009. Price controls apply to some regulated monopolies; certain states and localities control residential rents; and the government influences prices through subsidies, particularly for the agricultural sector, dairy products, and some forms of transportation. Government interventions in housing, automotive, and financial markets have substantially increased price distortions. Ten points were deducted from the U.S. monetary freedom score to account for policies that distort domestic prices.

Investment Freedom75.0 Back to the top

Foreign and domestic enterprises are legally equal, and foreign investments face federal screening only if perceived as a potential threat to national security. Foreign investment in banking, mining, defense contracting, certain energy-related industries, fishing, shipping, communications, and aviation is restricted. Regulations are generally transparent; individual states may impose additional restrictions. There are few controls on currency transfers, access to foreign exchange, or repatriation of profits. Foreign investors may own most land, subject to some restrictions.

Financial Freedom70.0 Back to the top

The U.S. financial sector has undergone drastic changes since the sub-prime mortgage crisis began in mid-2007, substantially reducing economic freedom. Mortgage guarantors Fannie Mae and Freddie Mac were placed in conservatorship. A number of prominent financial firms or banks have failed; government bailouts have kept others afloat; and the government has intruded on firms’ management in unprecedented ways (for example, by setting caps on executive compensation). Despite the turmoil, the U.S. still has one of the world’s most dynamic and developed financial markets. Foreign financial institutions and domestic banks are subject to the same restrictions. Foreign participation in equities and insurance is substantial. Concerns continue over the intrusive nature and cost of the 2002 Sarbanes–Oxley Act, which increased disclosure and internal control requirements to the detriment particularly of small firms.

Property Rights85.0 Back to the top

Property rights are guaranteed. Contracts are secure, and the judiciary is independent and of high quality. A well-developed licensing system protects patents, trademarks, and copyrights, and laws protecting intellectual property rights are strictly enforced. Government interventions in financial markets and the automotive sector have raised concerns about expropriation and violation of the contractual rights of shareholders and bondholders.

Freedom From Corruption73.0 Back to the top

Corruption is perceived as minimal. The U.S. ranks 18th out of 179 countries in Transparency International’s Corruption Perceptions Index for 2008. The absence of transparency and accountability in the operations of the Troubled Asset Relief Program (TARP) and in other “bailout” programs managed by the Treasury and the Federal Reserve has increased concerns about the potential for government corruption.

Labor Freedom94.8 Back to the top

The United States’ labor regulations are highly flexible. The non-salary cost of employing a worker is low, and dismissing an employee is not burdensome.

Economic Freedom Score

Country’s Score Over Time

Bar Graph of United States Economic Freedom Scores Over a Time Period

Economic Freedom vs. World Avg

Bar Graph of United States Economic Freedom Scores