Republicans See a Healthy Economy, Democrats a Bad One in Poll

10/03/2007

By Matthew Benjamin
September 13, 2007


(Bloomberg) -- Americans' views of the economy reflect how they vote, not where they live, a new Bloomberg/Los Angeles Times poll of three states that have early presidential contests found.

Republicans and Democrats in New Hampshire, Iowa and South Carolina have different views on the state of the economy and what should be done to make it better, the poll found. More than six in 10 voters in the three states who plan to participate in their Democratic 2008 primary said the economy is doing badly, while about eight in 10 Republican voters in each of the states said it's doing well. Democrats in all three states ranked the economy higher as an election issue than did Republicans.

A majority of Republicans in the three states want tax cuts to stimulate U.S. economic growth, which is expected to slow later this year, while even larger margins of Democrats would prefer education and health spending.

``My business is steady,'' said Ann Richardson, a survey participant from Columbia, South Carolina, who sells electronic controls and describes the economy as doing ``pretty well.'' ``There seem to be plenty of jobs,'' added Richardson, 64, who plans to vote in the Republican primary.

Seventy-seven percent of South Carolina Republicans said the economy is doing well, while almost two-thirds of the state's Democrats, among them Alfred Smoak, have a drastically different outlook.

Burger King Jobs

``We're losing our manufacturing jobs to overseas and creating service jobs at Burger King,'' said Smoak, 81, a retired electrical engineer in Branchville, a small town 65 miles south of Columbia. ``Plus, this mortgage stuff is going to have a lot of fallout,'' Smoak said, referring to the increase in defaults among subprime mortgages. He hasn't decided who he will back in the Democratic primary.

Almost six in 10 South Carolina Republicans said tax cuts are best for stimulating the economy, while almost eight in 10 Democrats called for health and education spending.

The unemployment rate in South Carolina, at 5.9 percent as of July, is significantly higher than the national rate of 4.6 percent because of the state's dependence on manufacturing, which continues to shed jobs. South Carolina, with a median household income of $41,100 last year, ranked 41st among the 50 states and the District of Columbia.

Survey

The Sept. 6-10 poll was conducted of 1,079 registered voters in Iowa, 1,312 voters in New Hampshire and 820 in South Carolina. The margin of sampling error for registered voters is 3 percentage points.

Democrats and Republicans in Iowa and South Carolina didn't divide along partisan lines over everything. Voters in both parties were split over whether the candidate they choose should embrace or reject free-trade deals such as the North American Free Trade Agreement.

Shun them, said Frank Wiewel, a health consultant in Otho, Iowa. ``Nafta was a big mistake,'' he said in a follow-up interview, ``there were manufacturing jobs here in Iowa that were taken to Mexico for its cheaper labor.'' Wiewel, 56, is a self-described independent who took part in the Iowa Republican straw poll in August but plans to vote in the Democratic caucuses in January.

Iowans and Trade

Slightly more than four in 10 Iowa Democrats said they prefer a nominee who believes trade agreements hurt the economy, while 33 percent said they would like a pro-trade candidate. Iowa Republicans split evenly over the issue, with 39 percent saying they support trade deals and the same number opposing them.

Pluralities of voters of both parties in New Hampshire said they want a pro-trade candidate, including 45 percent of Republicans and 43 percent of Democrats. Only about three in 10 in each party said they'd prefer a nominee who thinks trade is harmful to the economy.

Among New Hampshire Democrats, 78 percent said an economic agenda focused on beefing up health and education spending would be the best medicine for the U.S. economy, which is expected to slow to a 2.2 percent annual rate in the final three months of 2007 from a second-quarter rate of 4 percent, according to a recent Bloomberg survey of economists. More than twice as many Granite State Republicans -- 57 percent --favored tax cuts to stimulate the economy as those who called for spending increases.

>b>Lower Taxes `Better'

``Lower taxes are just better; they have more direct impact on people,'' said Richard Capistran, 36, who plans to take part in New Hampshire's Republican primary. The Derry, New Hampshire, engineer said he hopes the next U.S. president will attempt more tax cuts similar to those President George W. Bush pushed through Congress during his first term. ``Actually, I just think they ought to overhaul the whole tax system,'' Capistran said.

New Hampshire has no broad-based sales or income taxes. The state's 2006 median household income of $59,683 was more than $11,000 higher than the national median of $48,451 and put it sixth among the states. New Hampshire's unemployment rate was 3.9 percent in July.

Like New Hampshire Democrats, Iowa Democrats saw spending as the key to growth. ``Tax cuts never really work,'' said Janet Pultz of Decorah, Iowa. ``But the more people are educated and have the tools to start businesses, the better the economy does,'' said Pultz, 50, a director of a Norwegian-American museum who said she will participate in Iowa's Democratic caucuses.

Policy Divisions

Only 13 percent of Iowa Democrats said tax cuts are the best path to economic growth, while 75 percent said health care and education spending are. Republicans in the Hawkeye State overwhelmingly favor tax cuts over spending by a margin of 63 percent to 28 percent.

Iowa ranked 34th among the states in median income last year, at $44,491, and its unemployment rate stood at 3.9 percent in July.

Republicans in South Carolina favored trade over protectionism by 40 percent to 37 percent, while Democrats there chose protectionism by 39 percent to 34 percent.

South Carolina textile-factory job losses to low-wage nations have been partially offset by an influx of foreign manufacturers like BMW North America, a unit of Bayerische Motoren Werke AG of Munich, and Michelin North America Inc., a unit of France-based Michelin & Cie., which look to capitalize on the state's low unionization and low taxes.

James Hogeboom, 83, a retiree in Greenville, South Carolina, is an independent voter who said he's drifting toward the Democratic Party, and he would like the next president to pursue free-trade deals. ``If they're done judiciously and carefully they can be beneficial, so yes, I'm in favor of that.''