Associated Press
10-16-06
Democrats favored when economy uncertain
By JEANNINE AVERSA, AP Economics Writer 5 minutes ago
WASHINGTON - The nation‘s economy has encountered its shares of bumps
this year, and voters are uneasy. They‘ve seen the value of their homes drop and
surging prices for energy and other goods take a big cut out of their paychecks.
Never mind that gasoline prices have started dropping, that the value of their
401(k)s rises with each new Dow Jones industrial average record, and that the
interest rates on their credit cards and adjustable mortgages have leveled off for
now.
"They watched gas prices come down but watched them go up just as
precipitously not too long ago. The stock market is doing well but that doesn‘t
mean it can‘t come crashing down in days. Voters are reluctant to be overly
confident about economic trends," he said.
America‘s voters care deeply about pocketbook issues. Eighty-eight percent of
likely voters say the economy is an important issue — on par with the percentage
of people who view the situation in Iraq and terrorism as crucial matters,
according to an Associated Press-Ipsos poll.
"One of the more remarkable things about the economy and politics, the party in
power is punished when the economy is bad, but not necessarily rewarded when
economic conditions are good," said Ross Baker, a political science professor at
Rutgers University.
Just 9 percent viewed economic matters as the top problem, the AP-Ipsos poll
says. That‘s down considerably from a year ago when 24 percent said the
economy was the biggest problem as the country was still reeling from the blows
of the Gulf Coast hurricanes.
Around 60 percent of likely voters say their local economies and their own
personal finances are strong, according to an Ipsos poll conducted for RBC
Financial Group. Some parts of the country are struggling, though.
Unemployment in Ohio, Michigan and Mississippi, for instance, is much higher
than the national figure, which dipped to 4.6 percent in September.
The economy in the first three months of this year grew at a 5.6 percent pace,
the strongest spurt in 2 1/2 years. Growth slowed to less than half that pace in
the April-to-June quarter and is expected to be somewhat sluggish through the
rest of this year. The slowing reflects the slump in the housing market, the toll of
once skyrocketing energy prices and the impact of a two-year long string of
interest rate increases by the Fed.
The Federal Reserve ‘s goal is to cool the economy sufficiently to thwart inflation
but not so much as to tip into a recession
The federal budget deficit dropped to $247.7 billion for the 2006 fiscal year which
ended Sept. 30. It marked the smallest amount of red ink in four years.
President Bush pointed to the sm, , )‘s sexually explicit computer messages to
male pages.
"In this sea of bad news, they need some extraordinarily good news to turn the
tide. If the election were held today, the Republicans would be beaten very
badly," says Ken Sherrill, political science professor at Hunter College.
Says Steffen Schmidt, political science professor at Iowa State University:
"Good economic news is occurring and people aren‘t hearing it ....because it is
being drowned out really by the noise of these other stories that are breaking so
quickly."
Associated Press manager of news surveys Trevor Tompson contributed to this
story.