Obama’s Economic Albatross

Given the economic albatross that is flopping limply on Barack Obama's chest, I honestly do not know what a smart and effect reelection campaign would look like. I don't have to wonder what a lousy one looks like. The Administration has been trying out one theme after another. Each one seems to whimper out with Jay Carney trying to find the right words to defend it.

The latest weapon to be deployed by the campaign is the "during Romney's tenure, Massachusetts ranked 47th out of all states in job creation," as Media Matters puts it. That's fair enough. One has to wonder, however, whether it occurred to someone in the campaign that this would invite the Romney campaign to compare the unemployment rate in Massachusetts during his tenure (4.7% was his best number) with the national unemployment rate now (8.2%). From U.S. News:

"Only President Obama, who has failed to meet his own goal of 6 percent unemployment, would have the audacity to attack Mitt Romney's record of creating jobs," Romney spokeswoman Andrea Saul said Thursday morning. "We're happy to compare the 4.7 percent unemployment rate Mitt Romney achieved in Massachusetts to President Obama's weak record any day." The Romney campaign says his state's jobless rate fell from 5.6 percent to 4.7 percent during his governorship. The national unemployment is about 8 percent, according to the government.

Who wins that one?

Presidents are always hostage to events and forces beyond their control. President Reagan might deserve some credit for the booming economy in 1984, but he was lucky regarding the timing. President Bush (41) might have sailed to reelection, sparing all of us the ordeal of a stained dress, had the early nineties economic recovery come a few months earlier.

It's not easy to say whether the U.S. economy would have done better if President Obama had managed to spend trillions more or (as Paul Krugman has suggested) if the Martians had invaded. If the business cycle were cycling, he ought to be in pretty good shape. A deep recession ought to be followed by a robust recovery. This one wasn't.

This last week's economic reports were nothing short of dreadful. GDP growth has all but stalled.

The gross domestic product for the first quarter of 2012 was revised down to 1.9 percent from the original 2.2 percent. The previous quarter saw a respectable growth rate of 3 percent; the revision means an already worrisome slowdown just worsened by about 14 percent.

The anemic nature of the economic recovery, as the American Enterprise Institute's James Pethokoukis notes, can be measured by the fact that GDP growth in the past five quarters has been 0.4 percent, 1.3 percent, 1.8 percent, 3 percent and now 1.9 percent.

What everyone has been focusing on is the employment picture. It isn't improving.

The United States gained a net 69,000 jobs in May, for an average of 96,000 over each of the last three months. That is down from a 245,000 gain on average from December through February. The unemployment rate rose to 8.2 percent in May from 8.1 in April, though largely because more people began looking for work. And there was more bad news: job gains that had been reported in March and April were revised downward.

Any hope that economic recovery would life Obama's sails is pretty much gone. It's hardly all the President's fault. He cannot fix what is wrong with Europe nor remedy the depressing news from China. He might bring the leaders of Congress together and try to hammer out some package of emergency measures. It would help if he had established strong relationships with a number of major committee chairs, but that just isn't our man. Even if he did this, it would be unlikely to help much. But at least it would look like he was attending to the public business.

Instead, as the depressing jobs report hit the presses, Obama was off for six major fundraising events. Therein lies the problem. Barack Obama is superb when it comes to selling himself. It is not easy to see that he has ever been good at anything else. If he has any proposals for solving our economic and fiscal problems, he is keeping them in reserve.

So here's a good joke that I saw on some web site and lost track of:

What is a recession? When your neighbor loses his job.

What is a depression? When you lose your job.

What is a recovery? When Obama loses his job.

Comments

[larry kurtz]

Read 'em and weep, Doc: http://lockerz.com/s/212787589

[A.I.]

That is a really, really old joke and while economic growth/job creation has not been stellar during much of Obama's term, every indication is that his opponent's policies would make things even worse.

[A.I.]

For an excellent explanation of why austerity is not the answer to our economic woes, here is a link to KB's favorite economist (not) that I also offered up as a rebuttal to an earlier post: http://crooksandliars.com/blue-texan/paul-krugman-demolishes-couple-pro-aust

[Donald Pay]

KB says, "A deep recession ought to be followed by a robust recovery." Ought to? Howe? By magic? Where are you getting this stuff from? It takes concerted effort by government to recover robustly from a deep recession. Republicans have done everything they can to prevent a "robust recovery." It's really not surprising why we don't have one.

[Ken Blanchard]

Donald: sorry I went too fast for you again. I should have said that deep recessions are ordinarily followed by robust recoveries. I have pointed this out, with charts, on several occasions. See this one: http://southdakotapolitics.blogs.com/south_dakota_politics/2011/09/obamas-very-bad-no-good-jobs-record.html.

And yes, Donald, everything is the Republican's fault. You could try thinking about it, but why start now?

A.I.: let me get this straight. Spending a percentage of the GDP that is historically higher than average and going into debt at the tune of a trillion and half a year, is austerity! Wow. Can I be austere with my personal finances? Please? And yet... it somehow doesn't seem to be working.

Krugman is a partisan hack. He calls others nuts for saying things that he himself wrote in his economics textbook. He thinks we would be saved by a Martian invasion. If he were serious about his argument he would present a serious case instead of just going on talk shows. How much more would we need to borrow to kick start the economy? Three trillion a year? Fifty trillion? Is there any limit to our ability to borrow and who, pray tell, do we borrow it from? The Martians?

While understand your need to deflect the question, Obama has a terrible economic record. He has no serious proposals either to spend like a drunken Krugman or bring our fiscal house into order. You are hard up for heroes, my friend.

[Donald Pay]

Where do you get this stuff from? You obviously just make it up. In the post before this you were claiming we were in a global depression, and now you are saying that we had a deep recession that is ordinarily followed by robust recoveries. Uh, which is it?

Now check your charts, and ask yourself what's happened to the middle class during those years. Consider the effect that hollowing out the middle class has had on recoveries from any type of recession. Consider how income inequality and tax cutting has affected the ability of the middle class to spend, thus causing a "robust recovery."

You really need to get it together on this stuff because you can't even seem to read your own charts.

[Ken Blanchard]

Donald: I don't know what good it does trying to explain simple things to you, but I will try once again. Unlike a recession, a "depression" has no technical definition. I think it's a useful term nonetheless. Here is what I think it is: a recession that isn't followed by a recovery as the ordinary business cycle would lead you to expect. That is what we are in right now.

My chart shows that deep recessions are usually followed by robust recoveries. Shallow recessions result in much slower recoveries. We have just come out of a much deeper recession than was typical of the postwar economy, so one would expect an equally robust recovery. Instead, we are getting the very long curve typical of shallow recessions. Or at least, we hope we are. The recent economic news doesn't indicate that we are climbing out at all. That looks like a depression to me. You can call it what you want, but I have made nothing up and I have been consistent in my arguments.

[Donald Pay]

No. Your chart shows that before the Republican policies of offshoring jobs and hamstringing the middle class while shifting wealth to the top 1% recessions were short-term. But because the middle class has been hollowed out by Republican policies over the last 30 years, that part of the economy cannot drive the upturn. Also, you have to look at recession caused by financial evil-doing (again Republican caused) versus normal business cycle recessions. Your charts don't prove anything other than that you're totally ignorant about economics.

[Ken Blanchard]

Donald: one of us is indeed ignorant about economics, and pretty much everything else.

[Vako]

...Since I long ago lost hope that any of these freaks will acltaluy change US government institutions to be self-sustaining, the whole GOP vs. Dem thing leaves me cold. But even on that scale the "I'll make it work" technocrat from MA especially has me rolling my eyes.All that aside, is the Guardian proposing to increase the dividend tax rate from 15% to equivalent income tax rate levels? That's what we have here in NZ and look what it does for investment.Besides, Bill Clinton has made more than $100 million as a result of his political connections, as will Obama when he leaves office. In Guardian world that's apparently more respectable. Funnily enough it appears to be more respectable in Romney's eyes as well, since he won't or can't defend being a capitalist himself.Winning

[Gabriel]

It seems appropriate to me that the leedar of the Nation should have reached the top 1% of earners, ours has.I guess if you like the idea of being led by currency traders and corporate raiders/asset strippers it's appropriate, but the only things you can really be confident about with people like that are that they'll put their own interest first and regard you as a cheap, disposable item. It's not what I'd look for in someone to run the country.