Joseph Mercurio on "Approaching Labor Day: Has the Economy Changed the Elections Nationally?"

Has the Economy Changed the Elections Nationally?

There are just two months until the November elections, which is a long time in politics. Two months ago Andrew Cuomo looked like a contender and now H. Carl McCall is ahead by as much as he was behind. Also, a short while ago, most people would have bet against Mayor Mike Bloomberg gaining control of the school system.

The potential for volatility in an election is always there -- just ask Mark Green, whose chances of winning changed over a two month period and who sustained most of the collapse in the last ten days before the mayoral race was over.

For the first half of the year it looked like the Republicans nationally were going to defy history and pick up elective positions in the mid-term elections. In June there were the beginnings of leading indicators that seemed to say Election Day could be a big gain for the Democrats.

The three important indicators in everyone's polling were beginning to move negatively from the Republican perspective. Bush's approval, the economic condition indicators and the direction of the country are all changing -- no longer at the astronomical heights they were at as the year began. By mid-year the three indicators dropped to what still has to be considered better-than-average levels for a president and his party. Since then they have fallen farther.

In Gallup, for the first week of June, President George W. Bush's approval was at 74% and his disapproval was at only 18% -- unusually robust, especially since his own election was so close. By this week his numbers changed, dropping a net 19%, to 65% approve and 28% disapprove, but this is still nine points above what presidents have averaged historically in August. Not exactly bad news for the Republicans entering the final phase of the mid-term election cycle.

In the same period the state of the nation has gone from a satisfied 52% and dissatisfied 44% to a current 47% satisfied and 50% dissatisfied. This is not great but it is also not enough of a change to predict Democrats sweeping the House or firming up their position in the Senate.

The economic news is what most Democratic consultants have been watching closely to find an opening. Gallup's economic confidence indicator has dropped the most -- a change of 24 points. In the first week of June the economy was already a problem and corporate scandals were pushing church scandals off the front pages. Economic confidence was at excellent/good 36% and fair/poor 63%. Now it is at 24% excellent/good and a troublesome 75% fair/poor.

Corporate scandals and dips in the market have eroded the public view of the economy, but this does not seem to have the same resonance with voters that changes in availability of jobs and net pay have had historically. The president's administration is cracking down on corporate wrongdoers and Congress is passing laws to tighten corporate responsibility.

As a result, bad economic news has not yet nationalized House and Senate races in a way that will create a wholesale swing to Democrats. Politics is still local.

In the US Senate currently, there are eight tossup races. Four are Democrats: Welstone (Minnesota), Torricelli (New Jersey), Johnson (South Dakota) and Carnahan (Missouri); and four are Republican: Smith (New Hampshire), Allard (Colorado), Hutchinson (Arkansas), and Gramm's seat (Texas).

In gubernatorial contests there is an anomaly -- term limits. The Democrats, even if the current electoral environment does not continue to decline for Republicans, can pick up several state executive mansions. In open seats caused by term limits in Maine, Michigan, New Mexico and Tennessee, the governor's seat has moved from an incumbent Republican to leaning to the Democratic challengers. Elsewhere there is an equal number of Democrat and Republican toss-up states.

In New York, which is leaning Republican in all tip sheets, economic questions have not yet had an impact. In the Democratic Primary for governor, Comptroller McCall is being rated on life-long achievement and his past relationship with the electorate -- and not, as his opponent might have hoped, on slight fluctuation in the state's pension portfolio.

It remains to be seen whether the attack by Golisano on Governor George Pataki's ability to create jobs will stick in the fall or even if there will be a three-way race with Golisano eating away at Pataki's core vote.