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By Gary D. Halbert
February 24, 2004


1.  Kerry Climbs To Dead Heat With Bush In Polls.

2.  Bush’s Strategy: Identify Kerry As Ultra-Liberal.

3.  Democrats’ Strategy: The Economy & Healthcare.

4.  Will Hillary Be Kerry’s Vice President?

5.  The “Swing Vote” May Decide The Election.


Barring a major surprise, a week from now John F. Kerry (D-MA) will have virtually locked up the Democratic nomination for president.  At that point, the real fight begins.  The Democrats and the media are beaming now that polls show Kerry has ascended to a statistical tie with Bush, were the election held today.  Some in the Democratic party now believe they finally have Bush on the ropes, and that Kerry’s popularity will continue to rise.

The Republicans, on the other hand, are growing restless and nervous.  Privately, many Republicans are worried that the November election will be another nail-biter, or worse that Kerry could win.  Just a year ago, their president looked bulletproof; now they see him tied with a liberal Senator from Massachusetts.

Bush has remained largely silent over the last couple of months while the Democrats decided who will be their man.  Bush refrained from counterattacking the Democratic wannabes despite their constant barrage of criticism and very personal attacks.  To many, it has seemed as if Bush was on the defensive.

Yet all that is starting to change.  Bush made his first campaign speech on Monday night.  Bush’s re-election team is quietly pulling from his record-breaking war chest, and the gloves are about to come off.  Ads will begin running as soon as the Democratic opponent is known.  John Kerry, assuming he’s the nominee, is about to have a target painted on his back.

Bush’s attack, by the way, begins precisely at the time when Kerry is relatively short on cash, and while he is still a new face to many voters.  One might wonder, then, if Kerry’s latest climb to a statistical dead heat with Bush is as good as it gets.  Bob Dole, you might recall, was actually ahead of Clinton at this point in the 1996 campaign, and we know how that one turned out.

This week, we look at the political landscape, what the strategies will be, what will go on behind the scenes and what are some of the wildcards, including who Kerry might tap for his VP and the latest entrance to the race by Ralph Nader.

Bush’s Strategy – Identify Kerry As A Liberal

In the big picture, Kerry is a near ideal opponent for Bush.  He is a northeastern liberal with a 30-year voting record in Congress to match.  To maximize his chances of being re-elected, President Bush must identify Kerry as an ultra-liberal, and not let Kerry position himself as a moderate.

Bush will argue that Kerry is weak on national security, defense and opposes the war in Iraq, even though he voted for military action.  Bush will identify Kerry’s other vulnerable positions such as his opposition to tax cuts and capital punishment (which 70% of Americans support), and his position on same-sex marriage (Kerry was one of only 14 senators who voted against the Defense of Marriage Act.).  These are just a sampling of issues on which Bush should be able to paint Kerry as a liberal and a dove.

In addition to attacking Kerry’s voting record, Bush can show that Kerry is a “waffler” on numerous issues.  In fact, Bush made references to Kerry’s changing positions on the issues since he entered the race for president in his initial campaign “stump speech” before the nation’s governors on Monday night.

At the same time, Bush will have to be successful in championing his own successes.  Recent polls have shown that Americans now consider the economy to be the most important issue.  National security and the War On Terror have moved well down the list of priorities, which suggests that Americans now take for granted the fact that we have not had another terror attack on our soil.  Bush will have to elevate this issue once again, as discussed below.

Bush will also have to be successful in convincing Americans that the US economy has indeed turned around strongly, that unemployment is falling (even if modestly) and that he and his tax cuts are largely responsible for this.  This will prove to be a tall order. 

Bush’s Vulnerabilities

Bush’s problems are not insignificant.  First, his approval rating has fallen to a new low at 48% in some polls, down from 58% in January.  Second, as discussed above, Bush’s success in the fight against terrorism is no longer a front-burner issue with likely voters.  In a Fox News poll taken last week, likely voters cited the following as the key issues in the presidential race: 

The Economy


Homeland Security


Health Care/Medicine






On these currently most important issues, the edge goes to the Democrats.  The economy breaks 49%-38% for the Democrats.  On health care, the Democrats win 52%-31%.  Education goes 49%-31% for the Democrats.  These are all areas where Bush is vulnerable.

One of Bush’s primary issues is making his tax cuts permanent.  Here, too, the polls aren’t encouraging.  Likely voters were split 42% Republican/41% Democrats when asked which party they trusted most on the issue of taxes.

On the issue of who would Americans trust as a wartime leader, Bush still beats Kerry by 10 points.  When asked which party is better at fighting terrorism, the Republicans win 52%-29%.  As for handling the situation in Iraq, the Republicans win again, 48%-34%.   Thus, a key for Bush is to heighten voters’ interest on these issues. 

Finally, Bush will not be able to argue convincingly that Kerry is the big government/big spender since Bush has proven he can spend with the best of them. 

The Democrats’ Strategy

The Democratic nominee will certainly continue to hammer away at Bush on the economy.  He will continue to cite over and over the fact that over two million jobs have been lost since Bush took office.  Never mind that the recession actually began on Bill Clinton’s watch.  He will continue to criticize Bush over the tax cuts for the “rich.”  He will also hammer on Bush for the record large federal deficit.

Just as the poll numbers above suggest, the Democratic nominee will continue to criticize Bush over health care, prescription drugs, Medicare, etc.  This is the area in which the Democrats have the biggest edge.

Over the last couple of months, the Democratic wannabes criticized Bush to varying degrees over the war in Iraq.  It remains to be seen if this will continue to be a big issue for the Democrats.  My guess is it will fade as a primary issue for Kerry based on the poll numbers above. 

The 2004 Democrat Veepstakes

Assuming John Kerry sweeps the Super Tuesday primaries next Tuesday, we will start to hear more about his choice for vice-president.  Currently there are at least five possibilities: John Edwards, Bill Richardson, Hillary Clinton, Richard Gephardt and the inevitable dark horse.  As a liberal, Kerry will be strongly encouraged by his advisors to look at candidates who would round out the ticket, and make it at least marginally viable in the South.

That leads us to the most obvious choice, John Edwards. There are, however, some problems with an Edwards selection.  First, there is no guarantee that he will accept. Edwards has all the makings of a true political animal in the Clinton mold. But he needs to be confident of a win for him to hitch his star to Kerry.  If they lose, his political career could be over.  (He is not running for re-election to the Senate because he can’t win.)

Second, and perhaps more troubling, Edwards has been clobbered in the South by Bush in recent polls.  Plus, Edwards can’t deliver his home states of North and South Carolina, which haven’t voted Democratic since 1976.   So Edwards may not be such an asset in the South. 

There are also rumors coming out of the Kerry camp that New Mexico governor and former Clinton Secretary of Energy, Bill Richardson is a possibility. Richardson has appeal to the Kerry camp for his standing in the Hispanic community. By adding Richardson to the ticket, the Kerry campaign would hope for wins not only in New Mexico but also in Arizona and Florida, possibly tipping the red state/ blue state scale to Kerry. 

But, like Edwards, Richardson comes with some baggage. First, Richardson was at the heart of the national lab breach/nuclear weapons secrets scandal (the Wen-Ho Lee case). Richardson’s role in that debacle could weigh on Kerry’s already questionable national security record like an albatross. Second, Bush is solidly ahead in Arizona and Florida, so Richardson’s real impact is questionable.

Maybe Hillary Gets The Nod

Endless speculation continues about Hillary Clinton joining the ticket. This is entirely possible. Hillary certainly brings the most national political gravitas to the table, as well as her fundraising prowess and unfettered access to the Soros slush fund and others. Certainly these are very appealing pluses to the Kerry camp.

Unfortunately Hillary’s negative baggage could fill Cleopatra’s barge. Every Clinton blunder and scandal (Hillary-care, Whitewater, Travelgate, Vince Foster, etc., etc.) will be trotted out again.  Actually, this would be great for Hillary in that she would get the chance to air her dirty laundry before her run in 2008.  This is the only reason she would accept, and might do so even if she believes Kerry can’t win, if she is offered the job.

It remains to be seen if Hillary would actually tip the scales in Kerry’s favor.  Certainly, she is popular in the polls; she still beats any of the other Democrats.  Yet it is entirely possible that her presence could backfire on Kerry.

Of the four major possibilities, Richard Gephardt is in many ways the most logical choice. Gephardt is bland compared to Kerry and therefore would not upstage or overshadow him like Edwards or Hillary. He has virtually no negative baggage beyond his liberal voting record, and most importantly he might be able to deliver a red state, his home state of Missouri.  This could tip the balance and require Bush to win an extra blue state like Michigan or Pennsylvania. Gephardt’s only glaring negative is that he has no national appeal, but that has never been a requirement for a running mate.

Some people still believe that Kerry could select either Howard Dean or Wesley Clark.  I don’t think so.  Both are loose cannons and have plenty of negative baggage.  There are some potential dark horses that Kerry could tap.  We hear that Iowa governor Tom Vilsac and Sen. Evan Bayh of Indiana are being considered.  

The Kerry camp has some hard choices to make. Their VP selection will telegraph a general election strategy that will either be broadly or narrowly focused. It is too early to say which would be more beneficial.  Either way, we should know pretty soon.

A Small Sliver Of Voters May Decide

You would think that after the tragedy of 9/11, American voters would go for the candidate who would best keep this country safe from terrorism and protect our freedoms – whoever that candidate might be and regardless of his/her political party. 

Yet polls show that 85-90% of likely voters will vote along party lines, no matter what.  Only 10-15% of likely voters can be swayed, one way or the other, and most of the polling data groups believe the “swing voters” are closer to 10% than 15%.  Some say it is even less than 10%.          

This is troubling for Bush.  The majority of swing voters are less educated people who tend to vote for whichever candidate offers the most promises.  Only a minority of swing voters are very well educated people who tend to vote based on the issues.  This favors the Democratic candidate.

Then there’s Ralph Nader who announced over the weekend that he is getting in the race.  The Democrats screamed bloody murder when Nader announced, and DNC chairman Terry McAuliffe tried in vain to convince Nader to stay out.  So at least the Democrats think that Nader hurts them.

I would downplay Nader’s influence for a couple of reasons.  First, he is late to the race, and he may not draw even the 2.7% of voters he got in 2000.  Second, Nader is even more liberal than Kerry, and this could make Kerry look a bit more moderate.


Both candidates have their work cut out for them.  Kerry has pulled to even with Bush and he clearly has momentum.  Yet Bush has not thrown any serious punches so far.  He has been silent regarding his opponents for the last two months.  Now he is about to unleash his arsenal.  We will have to wait and see if Kerry can stand up under fire.

Bush must paint Kerry as an ultra-liberal quickly and decisively.  Kerry’s voting record makes him especially vulnerable.  Kerry, on the other hand, will try to move to the center and hope he can sell himself as a moderate.  Bush must convince voters that the economy is indeed improving, while Kerry will continue to claim that the economy is in shambles.

Bush must be successful in elevating the War On Terror as a more serious concern.  This is difficult because on the one hand, Bush wants to take credit for the fact that we have not had another terrorist attack in the US.   Yet if he does, it makes voters feel complacent on the issue.  It will be most interesting to see if (and how) Kerry attacks Bush on this issue.

The swing voters may once again decide the election.  As noted earlier, the “undecideds” tend to vote for the challenger and not the incumbent, especially if the challenger promises them more. 

In the end, the blue states tend to stay blue, and the red states tend to stay red.  If that is true, then Bush has the edge today since he is well ahead in Florida.  But if I had to bet today, I would wager that the race will be a close one.  It may come down to a very small number of states – Missouri, Michigan and Pennsylvania.

In my view, national security and the War On terror should be the primary issues.  But they aren’t, at least for now.  So, it will no doubt be interesting to watch the campaign.

All the best,

Gary D. Halbert



Nader: No “spoiler” this year or in 2000 race.

Kerry’s dead letter to President Bush.




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Forecasts & Trends E-Letter is published by Halbert Wealth Management, Inc. Gary D. Halbert is the president and CEO of Halbert Wealth Management, Inc. and is the editor of this publication. Information contained herein is taken from sources believed to be reliable but cannot be guaranteed as to its accuracy. Opinions and recommendations herein generally reflect the judgement of Gary D. Halbert (or another named author) and may change at any time without written notice. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. Readers are urged to check with their investment counselors before making any investment decisions. This electronic newsletter does not constitute an offer of sale of any securities. Gary D. Halbert, Halbert Wealth Management, Inc., and its affiliated companies, its officers, directors and/or employees may or may not have investments in markets or programs mentioned herein. Past results are not necessarily indicative of future results. Reprinting for family or friends is allowed with proper credit. However, republishing (written or electronically) in its entirety or through the use of extensive quotes is prohibited without prior written consent.

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