No Runny Eggs

If you started grade school around or before, the time that I did, or, if you are a student of history, you are familiar with the 3 R’s.  Readin’, Ritin’ and Rithmetic.  The 3 R’s were the core, the foundation of a public education.  Nearly everything we were taught in grade school was, or was tied to the 3 R’s. 

When I went to school, if you wanted to know if a teacher was a good or poor teacher it was simple process.  If a parent looked at their child and their child knew the 3 R’s, the teacher was good.  If the parent’s child didn’t know the 3 R’s, the teacher wasn’t good.  It wasn’t a very complicated process of evaluation, nuance didn’t play a role.  Parents knew who was responsible for the 3 R’s and they knew if their child was accomplished in them.

Gallup – Obama approval hits 5 month low
New Hampshire – Obama approval rating below “break even” point
Pennsylvania – Obama approval rating at all time low

Renewed combativeness (some would say snippiness), a new spokesperson and even dropping drone bombs in Libya have not helped President Obama’s approval ratings.  In fact, regardless of what he attempts to use to distract his audience, nothing seems to change the trend of his approval polls.

President Obama talks and behaves as if all those who disagree with him and his policies were included in what he calls “the far right fringe.”  In his mind, “the fringe,” is made up of all the people who doubted that he satisfied the Constitutional requirement for being a natural born citizen.  In other words, President Obama believes, or at least communicates, that all those who disagree with him are “birthers.”  I have no doubt that at whatever fundraiser he is attending this evening, he is perplexed by the fact that his approval rating continues to drop even though he has released his birth certificate.

As it was with the link of the 3 R’s with the approval of teachers throughout my education, there is an alphabetical link to explain the falling approval rating for President Obama; the 3 G’s.

Gas, Groceries and GDP are the only items you need to watch to determine whether President Obama’s approval ratings are moving up or down.

Gas and Groceries are fairly obvious.  The average price of gas is now $1.02 more than it was a year ago.  More importantly, those who follow the prices are suggesting that the price may well go over $4.50 before peaking.  At the current price, a family with two cars averaging 15,000 miles a year each, is paying over $125/month more for gas than a year ago.  If it peaks at $4.50/gallon, the average increase will be over $200 per month.

Grocery costs are getting nasty.  Just this week the USDA announced that US food inflation will run 4 to 5.5 times the rate it did just last year. With those averages, and some items like Beef (up 12.2% in a year), Pork (up 11.2% in a year) and Citrus fruits (up 8.5% in a year) running far higher than the average, it’s not hard to see how a family of four will face food cost increases of over $100 per month.

If you don’t think everyday food and gas costs are catching up with the average consumer, guess again. Today, Walmart, the largest food retailer in the US, said that they are seeing spending patterns that suggest that many of their customers are expending their budgets before getting to the end of the month.

Wal-Mart’s core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried, CEO Mike Duke said Wednesday.

“We’re seeing core consumers under a lot of pressure,” Duke said at an event in New York. “There’s no doubt that rising fuel prices are having an impact.” Wal-Mart shoppers, many of whom live paycheck to paycheck, typically shop in bulk at the beginning of the month when their paychecks come in.

Lately, they’re “running out of money” at a faster clip, he said.

“Purchases are really dropping off by the end of the month even more than last year,” Duke said. “This end-of-month [purchases] cycle is growing to be a concern.

So, core costs are increasing but how does GDP impact Obama’s approval ratings?

There is a strong correlation between GDP and real wage growth. GDP has slowed to an annual rate of 1.8%. At the same time, inflation is running at 3.8%. This means that the real incomes are likely not keeping up with the rate of inflation.

Everyday costs are going up but incomes aren’t. That’s a recipe for a very unhappy employee base let alone electorate.

Keep an eye on the 3 G’s. As the 3 G’s get worse, so will Obama’s approval ratings. If they improve, so will the ratings. I believe the relationship between the 3 G’s and Obama’s approval is so strong that I would wager the following: If the 3 G’s do not improve from where they are today, and I don’t think they will, Obama will lose his reelection bid.

As a country, we’re failing the 3 G’s.  I don’t think it’s difficult for most people to figure out who’s in charge of the class.