A Great Deal Can Happen In the Next Four Months

Politics, by definition, is the process by which the available resources are divided. And as the election rhetoric is making clear, this election is about who gets to keep more of their money and how whatever the government takes in from taxpayers will be redistributed. Thus, what voters will be deciding is primarily how much of their money they will get to keep after November, 2012, and what they will get for what they will pay in taxes, fees, and tribute to the governments, local, state, and federal. More important, on a philosophical bent is what the money paid to the government will buy.

If we look at last week, President Obama had some huge wins. His landmark and signature legislation, the Affordable Care Act, dubbed Obamacare, was upheld by the Supreme Court. Sure, the academics will argue about whether it's a penalty or a tax. But that doesn't really matter. The law is now on the books and will be implemented, unless Mr. Romney is elected. In that case, we would have to see if he really will repeal it or if the thing will morph into something else. The fact is no one really knows what a Romney presidency would look like. A second term from Obama is also an unknown, no matter what anyone thinks or predicts.

The bottom line is that Obama scored a slam dunk. Yet, the polls, at least Rasmussen's nightly polls of likely voters, the people who actually pay taxes and go to the polls, show that on Sunday morning, Mr. Rommey and President Obama are tied at 45% each, with 4% undecided and 6% wishing that another candidate was available. There is more. According to Rasmussen, conservatives are more energized than liberals after the Supreme Court decision. The polling data shows that "On Thursday morning, 43% of conservative voters were following the presidential race on a daily basis. That’s up to 51% today." Rasmussen points out that "It remains to be seen whether this is a lasting change, statistical noise, or a temporary response to the health care ruling."

Obama's supporters, however, are less excited. According to Rasmussen Reports.com: "Just 28% of moderates and 31% of liberals are following the race that closely. Those numbers are little changed since the Supreme Court ruling." Why does that matter? As Rasmussen points out "Interest in a campaign is typically a good early indicator of voter turnout."

Next, how does any of this translate into what voters say or do in November? This is where Clintonese comes in with the "It's the economy, stupid." Over the last few months, in our "Tales of the Road" series, we have chronicled how cities in Texas, Arizona, and most recently Rhode Island are showing a steady economy. People are still going to work. And most recently, our visit to Providence, Rhode Island, gave us the impression that few are actually worried about anything. Whether they are keeping it quiet or not is the real question. Have people secretly made up their mind already? Have they decided their voting preference? And are they waiting to pull a surprise similar to Chief Justice Roberts? In other words, are the polls meaningful at all this time around?

So we have to watch the economy. What will the jobs report deliver this Friday? And will there be anyone around to trade on the news? After all it is the July 4th in the middle of the week.

One thing is certain. Corporations are mostly o.k. with the Supreme Court decision. Now they can move on with their plans to deal with the law. Hospital corporations are thrilled with the decision. They see this as an opportunity to increase their cash flow from Medicaid, and to increase their control of the health care system by hiring physicians as employees. The end game for hospitals is that eventually Medicare is expected to pay a lump sum to them from which physician salaries will be extracted. We won't say more about this. But smart readers may detect some potential flaws in that line of thought.

So, what we've seen is that the same Supreme Court that allowed unlimited corporate donations to political campaigns has now made it possible for corporations to become the largest contributors and beneficiaries of the U.S. healthcare system. No wonder hospital stocks rallied after the decision. What we've also seen, is that Mr. Obama got little bounce in the Rasmussen.com polls, which tend to be the most accurate.

Next, we should explore the situation in Europe. Some kind of agreement was made about how to divide the German taxpayer receipts to the rest of Europe. And somehow, the politicians think that the German people are going to happily foot the bill for the rest of Europe. We think that's going to be contentious. But the market, at least on Friday thought that it would be a done deal.

China's most recent ISM survey fell for the 7th straight month. China is in the midst of both a political crisis, the Bo Xilai scandal, and now a shrinking economy, because Europe can't buy as much from them as they could before. So China will be printing money and hoping that domestic demand there will boost the economy. That's not a given. The Chinese domestic economy is hard to gauge, especially due to its diverse regionality and cultural issues.

The Middle East remains a huge question mark. An Islamist is now running Egypt, at least on paper. Syria is threatening to boil over. And Iran has been too quiet of late, which should be worrisome to everyone.

So, the real question is whether those who still work, spend money, pay taxes and try to hold on to some level of lifestyle in the U.S. will be able to save the day. Our thought is that the answer is maybe. And maybe can change depending on how corporations/employers respond to the health care law and how they go about implementing it.

We were speaking to a Wal-Mart employee yesterday. This is someone whom we have known for years, and a sober individual. She has worked in sales for Wal-Mart for over ten years now. What she told us is that she is increasingly pressured now to deliver at least $50 in sales per hour when she is working. She also told us that the health plan options at Wal-Mart have become increasingly expensive and cover less of her care than ever. She wouldn't speculate as to what her future holds. We think she's not alone. We think she might have voted for Mr. Obama, but she wouldn't confirm that. Still, this is where the grass roots working person is now, feeling the squeeze.

A lot can happen in four months. And a lot depends on what corporations do, now that they have "certainty" with regard to the Affordable Care Act.

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