A guest post from our friend Mike Ashton at E-piphany:
Arthur Balfour, UK Prime Minister around a hundred years ago, once said about Parliamentary candidate Winston Churchill “I thought he was a young man of promise, but it appears he is a young man of promises.” Here in the U.S., we are struggling with our own young man of promises, and this very evening he formally broke a promise that should have been kept and kept a promise that should have been broken. In announcing the end of the U.S. combat role in Iraq, he broke the promise of the previous Administration that we would stay until the Iraqi government was firmly in place and the insurgents defeated, while keeping his promise to his election supporters to remove all troops from that country by the end of 2011. It is fairly easy to see the connection between his earlier pledge to get out no matter what and the increase in activity from enemies of the Iraqi government, and the failure to correct that obvious error may cost the Iraqis much.
But while there is no connection between the President’s speech tonight and market activity (that I can discern), it would be foolish to think that there is no connection between his stubbornness in matters of importance and the despondent mood among consumers. A large majority of the electorate continues to favor outright repeal of a health care law whose main provisions haven’t even been implemented yet (Rasmussen (http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/health_care_law) finds the gap to be 58%-36% in favor and opposition to repeal of the new national health care bill. They are consistent: voters didn’t want the measure before it passed, and learning more about it hasn’t improved that opinion. And the President is consistent: he doesn’t care what they think.
This isn’t to say that a leader should always govern by polls. A popular leader holds the trust of the people and can often do things that are not broadly popular. For example, Reagan’s Strategic Defense Initiative was widely derided, but it helped to end the Cold War and today may be our only protection against a rogue missile launch. He was able to sustain that idea because he was generally on the side of the People in lots of other things. President Obama, and the Congress too, do not have the people’s trust. Their flailings (at best) and determined Socialist programs that are opposed by most Americans (at worst) are a big reason that consumers’ confidence is down for the count.