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President Obama's popularity has dropped like a stone over the past two years. If you listen to him, there is a very simple explanation for this: "For all the [economic] progress we've made, we're not there yet. And that means that people are frustrated and that means people are angry. And since I'm the president and Democrats have controlled the House and the Senate, it's understandable that people are saying, 'What have you done?'"

It is certainly true that the academic literature suggests that the state of the economy has a large impact on presidential approval. Yale economist Ray Fair, for example, has used a simple econometric model to successfully predict almost every post-war presidential election (his only miss was Bill Clinton in 1992). When the economy is bad, the incumbent president loses.

But the dramatic Obama change is something of a puzzle. The economy has climbed quite a ways over the time during which Obama's popularity has plummeted. For example, real GDP grew 3.3 percent in the second half of 2009, but the percentage of Americans who disapprove of the president, according to Gallup, increased from 33 percent to a high of 44 percent in late December.

High unemployment certainly is on the minds of voters, but the nearby chart suggests there is something else at work. As Obama's disapproval has climbed, so has the percentage of Americans who think he is too liberal. In March 2009, only 36 percent of Americans thought that was true of the president. Today, the number has climbed to 46 percent.

It is probably bad for a politician if voters think he is "too" anything, and the fact that Americans have decided Obama is too liberal is the most plausible story explaining the Republican surge and the Tea Party. The fact that policies such as the nationalization of the automakers and the health-care bill place Obama far to the left of past presidents suggests that the American people are on to something.

The most interesting thing, however, is what comes next. If Obama truly believes his rhetoric, he can continue to push far-left policies, and his popularity will resurge when the economy inevitably turns around.

But if he thinks the surge in disapproval is explained by the perception that he is too liberal, then one can expect him to veer sharply toward the middle in a desperate act of self-preservation. If Republicans capture Congress, he might have a lot of help pursuing that strategy.

Kevin A. Hassett is a senior fellow and the director of economic policy studies.

Photo Credit:White House/Pete Souza