President Obama embarked this week on a series of speeches designed to highlight the nation's continued economic stress. The immediate response--and from both ends of the political spectrum--was to decry his efforts as ""same-old, same-old.""[IMAGE]
It is true the president has made this pitch before, emphasizing that the significant progress the country has made is not enough.
And while we may have heard his speech before, this time it is different--unlike the 30-plus times House Republicans have voted in futility to repeal the Affordable Care Act (ACA).
(Just why the president has embraced the term ""Obamacare"" for a law that has to do with making medical _insurance_ more affordable without affecting the cost of medical _care_ is another mystery. If the House majority succeeds in eliminating the law, it would expose millions of people to being rejected for insurance for a pre-existing condition. The only way eliminating the pre-existing condition discrimination works economically is if the pool of insured is expanded--by requiring insurance if necessary. Repeal of the ACA makes little sense. It makes even less sense when the House GOP wants to replace Medicare with a voucher system and push future seniors into the market. Will all those seniors who don't have a pre-existing condition raise your hand. Not too many hands out there, are there? But I digress.)
What makes the timing of the president's repeated ├â┬ó├óÔÇÜ┬¼├àÔÇ£let's-do-something-about-the-economy├â┬ó├óÔÇÜ┬¼├é┬Ø campaign different is the renewed feeling that the economy is floundering, numbers notwithstanding. To paraphrase: When your neighbor remains out of work, it's a recession; when you remain out of work, it's a depression.
The Pew Research Center, just one day after the president began his tour, reported a growing percentage of Americans--44 percent of those polled--believe economic recovery is still a long way off, and the percentage of respondents grading the economy ""fair"" or ""poor"" was 82 percent, not much an improvement from the 83 percent in a similar survey in March. The percentage ranking the economy ""excellent"" or ""good"" rose to 17 percent in the most recent survey from 16 percent four months ago. When Obama was re-elected, only 13 percent saw the economy as ""excellent"" or ""good.""
What's a president to do? If you're Obama, you do what you do best: give a speech, play your role as cheerleader-in-chief, and be careful to not get too tied up in your own rhetoric or trapped by your ideas. Of course, presidents can also dance out of corners, as George W. Bush did in 2001, when he argued first for a tax cut because the economy was doing well--but when it began to slip two months after he took office, said we needed a tax cut as a stimulus. Though Obama offered a tax cut as a stimulus shortly after taking office, he got no Republican votes from the Congress. Go figure.
To be sure, the signs of progress in the economy are exceedingly slow and perhaps even remote.
While jobs have improved--a monthly average of about 200,000 new jobs in the last year--the quality of those jobs remains uneven, with about a quarter of them coming from the two lowest-paying industry sectors: retail and leisure and hospitality. And as the number of payroll jobs has increased, so has the number of multiple jobholders, absorbing almost 10 percent of the payroll jobs created in the last year.
The economic recovery doesn't get good grades because government is shrinking: 725,000 fewer government jobs than when the President took office, though most of that reduction is at the local level, which has shed just over 500,000 jobs since January 2009. Government may not manufacture anything, but the people who would be in place to provide needed government services earn salaries that they spend, adding to sorely-needed demand. Sequestration hasn't helped, and with no end in sight to mindless across-the-board spending cuts, we're on course for continued sub-par growth.
It's no secret that consumers aren't spending what they used to--they├â┬ó├óÔÇÜ┬¼├óÔÇ×┬óre gun-shy, so to speak. Even though top-line retail spending suggests strength, a peek behind the curtain reveals what economists know to be true: The monthly report on retails sales tells us very little about consumer attitudes and much more about prices for necessities.
Even the improved housing numbers are not without risk: Home sales have improved as buyers rush the market before mortgage rates go up higher. The improvement in sales of new homes (actually contracts) reported for June may more likely be pulling future sales forward.
Businesses certainly know and understand that. They've cut back on stocking shelves because buyers aren't there.
Nero, we're told, fiddled while Rome burned. It could be Obama's music is the lyrical melody of his speeches.
_Hear Mark Lieberman on P.O.T.U.S. (Sirius-XM 124) every Friday at 6:20 a.m. Eastern. When the Employment Situation report is released next Friday, hear him at 8:45 a.m. and again at noon Eastern._
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