Is Obama undervalued, Part Two

In January, I argued that Obama was “undervalued.” Since then, probably against the odds, Obamacare has been enacted. Nonetheless (or perhaps in part for this reason), Obama “shares” can be had at below their January price. For example, this week a poll showed him running slightly behind Mike Huckabee and Mitt Romney, and even with Sarah Palin.
But I still say that Obama was, and is, undervalued. As with any president, his poll numbers must be viewed in the context of economic conditions. In this economy, running more or less even with the top Republican contenders should not be too disheartening for Obama and his supporters.
We don’t know what the economy will be like two years from now. But more likely than not it will have improved appreciably. If so, I believe Obama stands a pretty good chance of winning re-election.
Charles Kratuhammer is even more bullish on Obama stock. He can easily see a future in which the president is re-elected and in which another “burst of ideological energy” produces transformative legislation on a scale comparable to what we have already witnessed.
I’m pretty skeptical about the second part of this scenario. First, history tells us that second terms rarely produce transformation on anything like the scale of first terms. Second, Obama almost certainly will not have the kind of Congress in his second term that he has had during the past two years. The electorate may be willing to give Obama a second term, but it probably will want to have in place a Congress that can be trusted to keep him somewhat in check.
In fact, as Krauthammer points out, such a Congress is very likely to be in place by January 2011. And the Democrats will struggle not to lose even more Senate seats in 2012 because they will be defending so many of them, including seats in red states like Montana, Virginia, Nebraska, North Dakota, and Florida. Republicans will be defending red state seats plus Olympia Snowe’s.
If re-elected, Obama will still be capable of much mischief, of course. But fortunately the prospects for another two years resembling 2009 and 2010 don’t seem very good.

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