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By Gary D. Halbert
July 6, 2004


1.  2004 Has Been A Political Disaster For Bush.

2.  Bush Should Be 10-20 Points Behind Kerry Now.

3.  It’s The State-By-State Polls That Really Matter.

4.  Electoral College Today: Bush 322/Kerry 216.

5.  Kerry Picks Edwards For VP, But Why?

6.  Where Do The Clintons Fit In All Of This?  

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In this weekly E-Letter, I write about investment related topics, economic analysis and major market trends.  But I also write about other issues that interest me (and hopefully you as well).  This week, for example, we delve into one of my favorite topics – POLITICS.  Politics can have a big impact on the investment markets. 

I should also tell you that while I am not a member of any political party (and never have been), I tend to be a conservative on most issues.  You may not always agree with me, but I will make you think.  With that said, let’s jump right in.

2004 Has Been A Political Disaster For Bush

Until the last few weeks, 2004 has been a near disaster for George W. Bush’s presidency.  Deaths of American soldiers in Iraq were rising. The Abu Ghraib prison scandal shocked and embarrassed the country, leading to more doubts about the Bush administration’s handling of the war and foreign policy in general.

At the same time, there was a general lack of belief that the economy was recovering, thanks in large part to the liberal media. You remember the cliché, “The Jobless Recovery” that we heard almost daily until very recently. Add to that several new books which depicted the president as either a fool, a liar or both.

Meanwhile, the Kerry-friendly “527” groups, brimming with George Soros’ millions, were blasting Bush at every turn. 527s are a special class of non-profit, tax-exempt organizations that are raising LOTS of money for political purposes – mostly for the Democrats. (See link in SPECIAL ARTICLES below.)

In case you missed it, MoveOn.Org (another liberal 527) compared the President of the United States to Adolph Hitler on numerous occasions. Last but not least, there is Michael Moore’s new “documentary” which paints the president as a bumbling rube who takes his orders from the pro-war “neo-conservatives.” 

Until the last few weeks, it has been just about all bad news for Bush.  The president has clearly been damaged by the convergence of these events, some unpredictable and some clearly orchestrated. Following his sky-high approval numbers after 9/11, Bush’s approval ratings have fallen sharply. As recently as March, Bush was still in the mid 50s. Yet the latest CBS/New York Times poll has Bush’s approval rating down to 42%, the lowest point of his presidency. 

Surely Bush is toast, right? Not so fast!

Bush Should Be 10-20 Points Behind Kerry Now

With Bush having come through nothing short of a political apocalypse, and with the Democrats and the media exploiting the events to their advantage, John Kerry should be 10-20 points ahead of Bush in the polls. Bush should be down for the count.  Kerry should be ahead just as Bill Clinton was against Bob Dole at this point in 1996.

Yet the race has been a statistical dead-heat in the national polls for the last several months. Over the last 2-3 weeks, Bush has actually pulled slightly ahead of Kerry in five of the last six major national polls, in some cases by more than the margin of error. Folks, this is devastatingly bad news for John Kerry and the Democrats! Any candidate worth their political salt would have been ahead of a bludgeoned and bloodied president by 10 to 15 points or more at this point. Yet the best Kerry has been able to do is stay neck and neck, and now he’s slipping behind.

The media want American voters to remain fixated on the national polls, several of which still show the race to be a statistical dead-heat.  However, as I will discuss below, Bush is faring far better than Kerry in the state-by-state internal polls. If the election were held today, Bush would win by a comfortable margin as you will see.

The “Battleground Polls” Show Bush Ahead

Let’s look at some of the “internals” of the most recent Battleground Poll. The Battleground Poll is a bi-partisan poll that has a long, respected and accurate history. The most recent Battleground Poll has the following approval ratings:



Bush 52%

Bush 46%

Kerry 51%

Kerry 43%

At first blush, the favorable/unfavorable ratings look to be statistically close.  Yet again, we have to keep in mind that Kerry should be way ahead at this point.  Instead, he is slipping.

On several of the major campaign issues, the results are surprising. For example on “keeping America prosperous” (i.e.- the economy), the latest Battleground Poll is split, with Bush 47% and Kerry 46%. That’s amazing considering this is “the worst economy since the Great Depression,” according to Kerry and the Democrats (at least until recently). Only when it comes to creating jobs does Kerry beat Bush 49% to 42%.

On dealing with Iraq, Bush leads Kerry 51% to 42%; on safeguarding America against the terrorist threat, Bush leads commandingly at 55% to 36%; and on holding the line on taxes, Bush crushes Kerry 54% to 36%. The wide spreads on those issues are, again, not good news for Kerry, but it gets even worse.

When asked who best represented the qualities of a strong leader, 54% said Bush and only 38% said Kerry. That is not good for Kerry. On who is a steady, consistent leader Bush is also in front 54% to 37%. Kerry is closer on which of them best represents “my values” with Bush at 48% and Kerry 44%. On being “honest and trustworthy,” Bush is at 45% and Kerry 42%.

However, on the critical “says what he believes,” Kerry is again crushed by Bush 57% to 34%. This coupled with Bush’s strong leadership scores helps to explain why he currently holds a fairly impressive electoral vote edge, as you will see below.

The Red States, The Blue States & The Undecideds

The general election is not a coast-to-coast popularity contest, as is the case with the national polls. Instead, the presidential election is a series of 50 individual state elections where the winner takes all. It is the Electoral College vote that decides the president, as it has throughout our nation’s history. This is why the real story lies in the state-by-state polls, more so than the national polls.

The so-called “Red States” are those believed to be solidly locked up by Bush.  They include AK, AL, CO, GA, ID, IN, KS, KY, LA, MS, MT, NC, ND, NE, OK, SC, SD, TN, TX, UT, VI and WY. These 22 Bush states total 190 electoral votes.

The “Blue States” are those believed to be solidly locked up by Kerry. They include CA, CT, DC, DE, HI, IL, MA, MD, NJ, NY, RI and VT. These 11 Kerry states and DC total 168 electoral votes.

There are good sources for tracking state-by-state polling. These polls are run by professional organizations that are respected and reliable. One of the best places to find a consolidation of state-by-state polling is at Real Clear Politics. Their polling center can be found at Actually, is one of my favorite websites for political commentary.

Lets look at the so-called “battleground states” to see who is ahead where and why. For purposes of this discussion, the battleground states are those in which the presidential vote could go either way.  

Broadly speaking, there are 17 possible battleground states including AR, AZ, FL, IA, ME, MI, MN, MO, NV, NH, NM, OH, OR, PA, WA, WI and WV. As noted above, the remaining states are believed to be solidly locked up by Bush and Kerry.

In the 2000 election, Bush won eight battleground states (AK, AZ, FL, MO, NV, NH, OH and WV), while Gore won the other nine. So far the split looks similar, but there are some very interesting differences.

Here are Bush’s current standings in the eight battleground states he won in 2000. AK, less than 2% down but within the margin of error (typically + or – 3 to 4 points). AZ,12 points ahead, well beyond the margin of error. FL ranges from +10 points ahead for Bush to dead even. MO, two points ahead but within the margin of error. NV, three points ahead but within the margin of error. NH, four points behind but within the margin of error. OH, four points ahead but within the margin of error. WV, six points ahead, beyond the margin of error.

Given the recent rocky times for the Bush administration, these standings are not too shabby. Those states total 88 electoral votes, with Bush currently winning 78 of them. Now lets look at how Kerry is doing in the “blue” states that Gore won in 2000.

Starting with IA, Kerry is up by two points (Gore won by 1 point in 2000), which is well within the margin of error. In ME, Kerry is up by two and a half points, again within the margin of error. MN has Kerry well ahead, outstripping the slim Gore victory there in 2000. Not bad so far, until we come to MI, where Kerry trails Bush by a narrow margin. Bad news here since MI is a must win for Kerry, he cannot be elected without it.

Grim news from PA as well, where Bush leads beyond the margin of error. These two states represent 38 electoral votes that Kerry absolutely must have in order to win. Fortunately for Kerry, he is well ahead in the remainder of the blue battleground states.

In all, this gives Kerry a battleground state electoral vote total of 54. Even if you give him the 10 leaning votes from the Bush states, Kerry is still 14 electoral votes behind in the battleground states: Bush 78, Kerry 64.

So why is Bush running ahead in Democratic strongholds like MI, PA, and OH, all states heavily hit with unemployment? I can only speculate, but I think it goes back to the issues pointed out above - leadership, trust, terrorism, etc. - and Kerry’s inability to inspire big labor. Kerry has also failed to articulate a coherent and passionate national message. As one political commentator recently put it, hating George Bush will only get you so far and it certainly won’t get you elected president.

All in all, an unpleasant picture is emerging for the Democrats and Kerry. You can see that while the national polls are close, they are not the best indicator of how well a candidate will do in the Electoral College.

Despite what you have heard in the mainstream media, if the election were held today, Bush would win. Here are the projected electoral vote totals based on the most recent states polling data: BUSH 322 /  KERRY 216.

This outcome includes giving Kerry the 10 electoral votes noted above from the blue states which are currently leaning toward Kerry. By the way, political commentators Fred Barnes and Mort Kondracke did a similar state-by-state analysis over the holiday weekend.  Their projection: BUSH 318 / KERRY 220.

Can Kerry Turn Things Around?

Maybe. It is possible, and there is still enough time, especially if there is any more bad news for Bush. First, Kerry needs to be more visible. He needs to be the news story, and not always being blotted out by it. He can do this in part by articulating a vision for America. What is the Kerry plan beyond not being George Bush? Why are his ideas better? 

It has been said that Kerry does better with the voters when he is not in front of them. And to some extent this may be true. Kerry is not particularly “warm” in front of voters and often comes off looking aloof. Having his billionaire wife on stage with him does not help the “man of the people” image he is trying to sell.

Next, Kerry has raised record amounts of money for a Democrat. Yet as well financed as his campaign is, it is just as terribly run. The core of Kennedy operatives that are calling the shots have so far shown themselves unready for prime-time.

Kerry Picks Edwards For Vice President – Why?

Kerry announced this morning that he has chosen John Edwards, the first-term Senator from North Carolina as his VP running mate. While Edwards is young, handsome and energetic, the former trial lawyer does nothing to help Kerry’s standing in the state-by-state vote count.

You will notice that North Carolina is NOT among the battleground states. So Edwards cannot even offer up his home state to Kerry. Bush is solidly ahead in NC. You don’t hear this much, but Edwards is not even running for re-election to the Senate from NC because his popularity there is so low.

Over the last couple of months, I have argued that Kerry should select former MO congressman Dick Gephardt as his VP. Gephardt was the only VP contender who could have solidly delivered Big Labor to Kerry. Certainly Gephardt had a good chance to deliver his home state of MO, a hotly contested battleground state that could help throw the election to Kerry. Gephardt also had the potential to bring two other key battleground states – MI and PA – to Kerry’s side of the ledger.

Yet Kerry picked Edwards who brings virtually nothing to the table. The question is why?

Did The Clintons Have A Hand In This?

It is no secret that DNC chairman Terry McAuliffe has been pushing for Edwards for some time now. Here again, why would the head of the DNC be pushing for a guy who can’t deliver even his home state (or any other) over Gephardt who could deliver MO and maybe even MI and PA?

If you have read this E-Letter for long, you know that I have maintained for several months now that it is at least possible that Bill and Hillary Clinton, and therefore Terry McAuliffe (their handpicked guy), may privately just as soon see Kerry defeated in November. That would leave the door wide open for Hillary to run for president in 2008.

So, all the better to have Kerry pick Edwards who brings no states to Kerry’s ledger, versus Gephardt who might have delivered 2-3 states a possible victory in November.

One also wonders why Bill Clinton couldn’t have waited to publish his book until after the election. Instead, he chose to publish it now, and his nationwide book tour is sucking all of the oxygen out of the room. There are those who feel that all the publicity Clinton is getting will help Kerry. I just don’t see it.


The national polls show the presidential race very close, with Bush pulling slightly ahead in the last 2-3 weeks. Yet with all the trouble Bush has had this year, Kerry should be ahead by 10-15 points or more at this point. However, the state-by-state polls show Bush has a very comfortable lead in the electoral vote. Kerry has failed to capitalize on Bush’s troubles. At this point, it is still Bush’s race to lose.

We can expect to see Kerry get a boost in the polls over the next few weeks. His choice of Edwards as his VP will bolster Kerry’s popularity, since Edwards is charming and charismatic (unlike Kerry). Plus, the Democratic National Convention is the week of July 26. Both parties get a boost from their conventions.

But at the end of the day, Kerry must “flip” a couple of red states to his side of the ledger if he is to have a chance to win. Unlike Dick Gephardt, John Edwards can’t even deliver up his own home state.

Finally, no one has ever been elected President of the United States from the shadows. Kerry will have to emerge soon, for good or ill, and claim the spotlight. Maybe this has finally started with his announcement of Edwards as VP. Or maybe it will happen at the Democratic National Convention later this month. If not then, Kerry is very likely history.

All the best,

Gary D. Halbert


Business vows to oppose Kerry/Edwards.,,SB108906847567455577,00.html?mod=todays%5Ffree%5Ffeature

Info on the mostly liberal 527 groups.


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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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