2010 is a year of mid-term elections in the United States. During the mid-term of President Obama’s four year mandate, 2009-2013, all 435 members of the House of Representatives will be selected as well as 1/3 of the 100 Senators and several state governors.
Traditionally the party in power, in this case the Democrats, have lost seats in the Congress in a mid-year election. The 2010 campaign should be no exception, with particular attention to two factors this November.
First, the stock market has climbed over 10,000 from a low of 6,000 during the crash, but well below its high of 14,000. Wall Street seems to have bounced back, bonuses and all. If the stock market continues to rise, the financial sector will be more than stabilized and brokers and bankers can thank the interventions by Summers and Geithner by voting Democratic in the fall.
However, and this is the last of our three 10’s, the official unemployment rate continues to hover at around 10 per cent. Thus, even though the stock market has climbed, money has not trickled down from Wall Street to Main Street. And, there are more voters on Main Street than Wall Street. The unemployed, non-officially estimated at 17 per cent, as well as those afraid of losing their jobs will certainly not vote for the party in power.
The Democratic Party has traditionally been the party of the unions and workers with the Republicans looking after the financial sector. As of now, the Democrats risk losing much of their base if the 10 per cent unemployment rate does not significantly drop before the summer.
President Obama has said that unemployment and fiscal responsibility are high on his agenda for 2010. If he becomes distracted by security issues following the Christmas bombing attempt as he has been distracted by Afghanistan, then he and the Democratic Party will lose more than the usual mid-term losses in November.
And, that will mean a very rough last two years of the mandate and perhaps even a one-term President.
January 13, 2010
