Thursday, December 10, 2009

Double-Digit Unemployment of deflation signals a Doom Day for Democrats in Midterm Elections

With the unemployment rate passing 10 percent, the midterm election forecast for Democrats looks grim.

Below are some thoughts from Public Opinion Strategies:

The last time unemployment broke the ten-point barrier, in 1982, Republicans who held the White House under President Reagan, lost 26 seats in the House.

Unemployment and inflation together are commonly called the Misery Index. The rules are simple: of the last 15 elections, 13 were “Change” elections in which the party that held the White House lost seats in Congress. In those “Change” elections, the average Misery Index in October going into Election Day was 10.1 and the average loss was 26 seats in the House; including, some real drubbings of more than 45 seats. The Index is at 10.02 now.

But the Index is growing faster than just unemployment. Through the Spring and early Summer, the cause for a smaller Misery Index was aided by a couple of points of deflation. Since Fall, deflation has all but disappeared, causing America’s cumulative Misery Index to rise a point-and-a-half in October alone. We all know that unemployment has been going up since Summer, but American’s scarce greenbacks don’t go as far as they did just a couple of months ago.

Read full article from Public Opinion Strategies.

With conditions worse than in 1982, it appears that history will once again repeat itself and Democrats will take the fall.

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