Outlook:
After the weeklong pause for mourning Ronald Reagan, Sen. John Kerry still maintains an edge over President Bush.
1) The only new development is the audacious effort by Kerry to grab the mantle of Reagan by calling on Bush to reverse his opposition to embryonic stem cell research. Kerry last Saturday embraced Nancy Reagan's position, basing it on the idea that research might have helped her husband's Alzheimer's. Bush cannot change on this issue that is dear to his pro-life constituency. It is a difficult position for Bush with major defections on Capitol Hill.
2) Democrats privately are worried about the loss of the economic issue. The growth of jobs and the rising level of economic confidence are bad news for the Democrats. Historically, incumbent presidents who enjoy a rising economy and lack of internal party opposition usually win.
3) Bush's big problem continues to be Iraq. Popular support for the war continues to diminish, reflecting a lack of American staying power for the global role envisioned by the Bush high command. The general rule of thumb is that this story has to get off page one by the fall. The good news is that U.S. battle deaths in Iraq are down.
4) Democrats remain uneasy that Kerry is not taking hold and that a campaign based strictly on opposition to Bush may not be adequate. Kerry, however, usually improved as a campaign progresses-as he did in his 1996 re-election and in this year's Democratic primaries.
Democratic Vice President:
Sen. Kerry is nearing a decision and, in fact, is behind his expected schedule making his selection. Kerry campaign insiders are under strict injunction from the candidate not to talk. They repeat the aphorism: Those who know don't talk, and those who talk don't know. Two additional points should be made.
1) Most recent vice presidential selections were huge surprises and not on many people's lists. Dick Cheney, Dan Quayle, Jack Kemp, Geraldine Ferraro and Lloyd Bentsen all were in that category.
2) Even though he has said no, no, no over and over again, Sen. John McCain (R.-Ariz.) would be the first candidate since Lyndon B. Johnson (another surprise) in 1960 who made a real difference in the outcome of the election. We believe McCain when he says he won't consider it, but it intrigues many Democrats.
Given those caveats, this is the list Kerry seems to be working from.
Oil Prices:
Oil prices have reacted to Saudi proclamations earlier this month that OPEC would increase oil production. Instability and high prices remain, however.
1) The uncertainty, and the possibility that prices could return to $40-per barrel, is less due to supply than to fear and speculation. Deadly bombings in Iraq over the weekend bring back to the forefront fears about the region. Political instability in Venezuela and Nigeria compound the problem.
2) But just as the possible upward price pressures are rooted more in perception than in fundamentals, so did the recent dip in oil prices following Saudi Arabia's announcement of raised production targets. There has been no increase in oil production, because the Saudis were already exceeding their targets.
