With New Hampshire Voters, It's More the War Than the Economy

Times Staff Writer

Business is brisk at Cafe Louie on Central Street. The Wednesday franks-and-beans special is moving nicely at $4.95, and every one of the orange booths is taken.

Louis Matney, 22 and fresh out of college, opened the place in the spring, a risky venture while the nation is struggling through the worst job loss in terms of numbers since the Great Depression.

But the success he has seen is not unique in this tiny state, where the first presidential primary is about 11 weeks away; the sluggish economy that has battered places like Iowa, Michigan and Ohio has left New Hampshire only slightly bruised.

"I've never seen such loyalty from customers. The same people come back every day," Matney said, running out to deliver a salad.

Times are relatively good in New Hampshire. The unemployment rate is more than a point below the nation's -- even in Franklin, a blue-collar town that has struggled since the textile mills shut down 30 years ago.

Now it's the war that is making some New Hampshire voters nervous, so much so that the division could be seen at the table nearest the kitchen at Cafe Louie.

Brad Hinds, 36, owner of a plumbing and heating business, believes that the Iraq invasion was necessary and that Bush is on the right track. He'll vote for him again.

Not so the guy across the table. Jarrod Deyarmond, 30, who works for Hinds, believes he is financially better off than he was a year ago. But he is looking hard at the field of Democratic presidential candidates traipsing through the state.

Deyarmond is disturbed by the failure so far to find weapons of mass destruction in Iraq, the billions being spent there and the steady stream of bodies coming home. "I think we need a change, a different point of view," he said.

A president's approval rating is typically linked to the economy's performance. But despite the positive economic signs in New Hampshire, Bush's numbers in the state continue to slide. In a recent University of New Hampshire poll, 53% approved of his handling of foreign affairs, a 10-percentage-point decline since summer and the lowest since the Sept. 11, 2001, terrorist attacks.

Ambivalence about the situation in Iraq helps explain why former Vermont Gov. Howard Dean, who questioned the war from the start, has staked out a strong lead among the Democratic candidates in state polls. In just one sign of his popularity, he is drawing such large crowds to house parties that some people have had to park three blocks away.

"The war has become a wedge issue here because it symbolizes for Democrats everything they can't stand about American politics right now, and Howard Dean appeals to them because he can't stand it either," said Dante Scala, a political scientist at St. Anselm College in Manchester.

Bush has many supporters in New Hampshire, which he carried by one percentage point in 2000. Even though more than a third of the state's registered voters declare themselves independents, New Hampshire tilts Republican. All of its top elected officials are Republican, and the party holds sizable majorities in both houses of the Legislature.

But the postwar victory glow that pushed Bush's approval rating sky-high a few months ago is now a chin-to-chest resolve among backers who promise to stick by the president through the long haul.

"He told us it would be hard," said Karen Faris, 40, sitting with her husband over a Chinese dinner at the Mall of New Hampshire in Manchester. "We feel things are going much better in Iraq, but that isn't always what is reported."

On one recent afternoon, the streets of downtown Manchester were soaked with rain and, over at the new sports center, the circus was in town. As if New Hampshire needed another one.

Although Bush is unchallenged for the GOP nomination, the Democratic field is a whopping nine -- and seven of them have been campaigning actively, their number swamping the state at times. (The state Democratic Party's recent annual bash drew record crowds, forcing a hotel manager to roll up his sleeves and help serve food.)

It is not unusual to bump into a would-be president at the local pizzeria or the supermarket. The airwaves are flooded nightly with ads, all of them implicitly or explicitly anti-Bush. That is one reason his faithful believe his overall approval rating has slid 15 percentage points here since the spring.

"Bush has taken close to $1 million of unanswered, negative, paid media," said Tom Rath, a longtime New Hampshire Republican strategist who has been close to the Bush family for years.

New Hampshire's 1.2 million population is roughly the size of San Diego's, but its political sway in the early part of every presidential campaign is huge. This year, whoever wins the Democratic primary on Jan. 27 will get a boost heading into a rapid series of primaries that follow.

Despite Dean's lead, the race is considered fluid. New Hampshire voters are famous for making up their minds on the way to the voting booth. And that's what the other Democratic contenders, including Massachusetts Sen. John F. Kerry, are counting on.

"How are you doing? How are things going?" Kerry recently asked a small woman in a headscarf waiting to cross Elm Street, Manchester's main drag.

The answer to this often-repeated question is usually positive. Still, there is a sense that New Hampshire is ill at ease.

If anything, the economic signals here have been mixed. On the bright side, housing prices have shot up. Unemployment is 4.5%, and the state boasts the sixth-highest income per capita in the nation. Manchester, the largest city, picked up 2,000 jobs in the last couple of years.

"This time around, I'm not exactly sure we actually had a recession here," said Andy Smith, director of University of New Hampshire Survey Center. "We had a slowdown ... but it never really got that bad."

At the same time, though, New Hampshire lost one-fifth of its manufacturing jobs, a pattern repeated in other states across the country. The northern part of New Hampshire, sparsely populated and dominated by timber and paper mills, felt it the worst, with some counties recording unemployment figures as high as 9%.

The result is a mix of optimism and uncertainty. No one has forgotten the early 1990s, when recession slammed the state so hard that five banks closed in a single day, and voters vented a collective rage that precipitated the political downfall of President George H.W. Bush.

This time, New Hampshire's economy was more diversified when the slowdown began. The high-tech sector suffered, but the state's population was so highly educated that people tended to find other jobs, experts agreed.

Yet every person doing well in New Hampshire seems to know at least one who isn't.

Doug Young, 42, of Rochester, who owns a chain of discount gift card shops, is having one of his best years ever. He bought a new car because the deals were irresistible -- one-third off the sticker price. But some of his 30 employees can't afford health insurance even though he pays half the cost.

"This is the first time a Bush tax cut has actually helped me, but not one penny of that is going into creating jobs," said Young, who is considering voting Democratic this time. "I am willing to give up certain things financially to have a president with more integrity."

Art and Joyce Gagne, 61 and 60, sold their flower shop in Derry and took a six-week trip out West.

But it's hard to enjoy their good fortune when Art's sister can't afford her blood pressure pills, and one of their friends who had retired now has to work as an airport shuttle driver to keep his house.

"Why should people we know not be having their blood pressure pills and yet we are giving Iraq all this money?" Joyce Gagne asked, bringing the conversation back to the war.

Which, around here, is where it often seems to end up.

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