John Ransom
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There are many wildcards in any political, economic and market forecast. For example, no one could have predicted the tsunami in Japan that affected global GDP growth negatively in 2nd quarter of 2011. No one could have predicted that Obama, all by himself, could have tracked down and killed, barehanded, Osama Bin Laden- while also playing a round of golf.

But that’s a column for a different day.   

For 2012 the biggest known wildcards will of course be the presidential election, followed by the other federal elections.

While people like to think that presidents get too much blame or too much credit for the economy, I think it’s impossible to overstate the blame that should be assigned to Barack Obama and his economic team for the miserable performance of the economy under the policies of the Democrats. It’s not just that they did things that didn’t work; it’s that they undermined the confidence the American people need to have in government as a fair arbiter between sections of the country.

In order for America to work, citizens need to see their government sometimes go the nonpartisan route- the route that actually works. Obama should try that once, like for example on the XL Pipeline. Bill Clinton did it on welfare reform and it got him reelected.      

I believe that a win by Republicans for the top spot could give a significant boost to the chances of a fall market rally as the contours of the race for the White House become clear. A win by Obama could keep the markets choppy, but somewhat optimistic if accompanied by GOP wins in both the House and the Senate. A win by Obama with gains by Democrats in the House or the Senate and all bets are off: The market will react extreme adversely to this last scenario.

Right track/wrong track numbers have trended steadily against Obama since June of 2009. While political polls are relatively meaningless at this stage, consumer confidence numbers, which are slower to turn, have bad new for Obama.

Despite a recent rise in consumer confidence- from 64 to 69- the number still remains well below the century mark that Obama needs for reelection.

"There is plenty of time for the national mood to change, but the decline in income expectations is particularly telling," Steve Blitz, senior economist at ITG Investment Research told his clients according to the WSJ. "When the income up percentage is on the downswing, incumbents do not get re-elected."

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John Ransom

John Ransom is the Finance Editor for Townhall Finance.