It's the worst of times and not-too-baddest of times for Barack Obama's presidency.
His poll numbers have all dropped precipitously over the last month and his health care reform initiative hasn't gotten a vote from one of Congress' chambers, notwithstanding the deal cut Friday by liberal House Energy and Commerce Committee Chairman Henry Waxman and his recalcitrant conservative Blue Dog Democrats. It remains the case that not having a vote means that health care is in serious jeopardy during a month where both sides will be waging advertising wars. And reform is on the defensive right now.
On the other hand, there are some signs that the economy may be on the rebound. It's not showing up in job creation as yet, but Wall Street seems to be rebounding nicely, thank you very much. In fact, the Dow had its best July in 20 years.
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Maybe there isn't a coincidence between these facts.
Even with the House (and to a lesser extent, the Senate) compromise on health care, what is developing is far more conservative than what appeared to be coming down the pike when summer began. The public option is all but dead in the Senate and has been seriously watered down in the House. Neither side appears to be talking about a personal mandate for health care coverage. All of this is music to the ears of various parts of the business constituency -- whether small businesses in general or insurance firms.
Keep in mind that that is where things stand now. Neither chamber will have votes before September. The president might not get a completed bill by at least October. Whatever the issue, time is always the ally of the status quo. Delay gives business-friendly lobbyists even more time to influence (liberal reformers would say "water down") a bill more to their liking.
The more "reform" looks like the current system, the more business is able to predict fiscal gains and losses. Stability is good for business. And good for Wall Street.
In the absence of dire outside economic news, don't be surprised if Wall Street continues to rally in August -- when Congress is out of town and unable to tinker any more with health care plans.