James Pethokoukis

Politics and policy from inside Washington

Bad economy overwhelming Obama’s agenda

July 22, 2009

Just how much trouble is President Obama and his economic agenda in?  Allies will point to the president’s still-robust 55 percent approval rating, according to pollster Gallup, but that number has been declining steadily from a high of 65 percent in early March. (He’s actually a point lower than George W. Bush at similar points in their presidencies.) And while the House of Representives has passed historic cap-and-trade legislation, the bill seems to be going nowhere in the Senate and the president may have little to crow about at the December climate change conference in Copenhagen. Even his plan for a consumer financial protection agency looks like it’s in doubt. Then, of course, there’s healthcare reform, which Obama again will be making the case for during a prime-time news conference tonight.

But no matter how cleverly Obama makes his points or how skillfully he wrangles the Washington press corp, his efforts may be futile as long as unemployment continues to rise and sap American economic confidence. Here are the numbers that should worry team Obama: A recent AP-GfK poll found 54 percent of Americans think the country is on the wrong track, the same as in January and up ten points from mid-April. A recent Diageo/Hotline poll found 55 percent of American think the country is on the wrong track, the same as in early March and up 12 points from early June. A CBS poll has the wrong track number at 57 percent, up from 48 percent in early May and the same as in early March.

The trend is clearly not Obama’s friend, particularly with unemployment expected to continue to rise to at least 10 percent and stay elevated for some time. The outlook is dire enough that economist Gluskin Sheff economist David Rosenberg, formerly of Merrill Lynch, has speculated that Obama might turn to extreme economic measures to juice the economy and his political fortunes: “We are sure that as the unemployment rate makes new highs and increasingly poses a political hurdle in a mid-term election year, that it would make perfect sense, for a country that always operates in its best interest — even if it may not be in everyone’s best interest — to sanction a U.S. dollar devaluation as a means to stimulate the domestic economy.”

That would certainly have the potential for worrying financial markets mightily. But as for now it’s tough to find much investor concern over Obama’s troubles or his bogged down agenda. The Dow has scored seven-straight winning sessions for the first time since April 2007, gaining nearly 10 percent over that span. With fear of a depression subsiding — see Larry Summers new favorite metric, the plummeting number of Google searches on “economic depression”, for evidence — political gridlock may again be good.

Comments

I strongly believe that the US will come out of this stronger then it was going in. However the turmoil in the process will be hard to take. Devaluation of the US dollar is not necessarily a bad thing. The Federal debt in the US is too high and the US dollar in my opinion is over valued.

Posted by Philip | Report as abusive
 

Obama is overloading the system/economy. What has happened to the concern about the significantly underfunded social security situation? We need to take our country back from this vote buyer and focus the trillions of wasted money on the people that worked all their lives to let this impostor in the back door.

Posted by Larry L'Heureux | Report as abusive
 

Fuck you

Posted by Larry LHeureux | Report as abusive
 

I AM VERY CONCERNED WITH THE REALITY TO BE PLAYED OUT ON THE COMMERCIAL PROP SITUATION – REALITY IS NOT A PIPE DREAM —– MAYBE BUSH WAS CORRECT IN SAYIN TO LET THE BIG BIZ PLAY IT SELF OFF ALL BY ITSELF — IM A MODERATE REPUBLICAN WHO LIKES OBAMA AS A PERSON — BUT AS ALWAYS NICE PEOPLE ALWAYS FINISH LAST BECAUSE GREED IS ALWAYS IN THE MIND OF OUR SURVIVAL ——– IF YOU CANT UNDERSTAND WHAT I AM SAYING IM SORRY — ITS LIKE THE REST OF ALL POLITICS AND ALL THE BS WE PLAY BY

Posted by SCOTT PREZ | Report as abusive
 

THANK YOU LARRY FOR YOUR UNDERSTANDING —– I FEEL THE SAME

Posted by SCOTT PREZ | Report as abusive
 

Dow Jones almost hitting 9000 pts, two major carmakers saved, financial institutions steadied, housing construction up, credit beginning to flow, iraqi handed back to iraqis, iran and its cleric on the run, stimulus beginning to reach the intended areas and now reform on healthcare, considering what this President inherited, not a bad effort for 6 months. The economy will recover, it will take time..so give the President’s agenda time to work, and people like Larry, just admit, it is not the man’s effort that makes you so angry, I wonder what it might be…

Posted by S.Orram | Report as abusive
 

Hi. The real question should be will the recovery take place in your lifetime. If not, what’s the difference? My wealth has dropped by nearly 1/4 of a million dollars. Should I expect a return to this value? I think not.

Posted by Cirric | Report as abusive
 

Lets get behind the President. If you feel he has done something wrong let him know and write your Congress man and Senator.People worried about the health care reform limiting acess to health care appertly have never had there insurance company deny a procedure or have to choice what prescription they can afford because the insurance company dosen’t think they need a certian drug.Lets look at the big picture there are millions of people out there with no health coverage and no jobs. It just didn’t happen in the last seven months!

Posted by D.Ypparila Sr | Report as abusive
 

Uh, millions of people without healthcare. When was it the governments responsibility to cover all americans? I think healthcare IS the responsibility of the citizen. It’s not a RIGHT.
If their employer CHOOSES to add healthcare as a benefit, then so be it. People have become accustomed to this benefit and then everyone and their brother think that because some company provides healthinsurance for their neighbor that they should have it too. Like it’s a right that they deserve if their neighbor has it.But , to own a gun is a RIGHT of a citizen. Does the government PROVIDE a gun for every citizen? To practice your religion is a RIGHT. Does government provide your religion? NO, and NO.
For those people out there who do not have health insurance provided by their employer woop de doo. You can purchase health insurance for almost nothing. And you’ll probably be better off than your neighbor who has insurance provided by their employer. Employers are going to pay little less salary to make up for the insurance portion they pay out for their employee.
If your employer is not paying your insurance their most likely going to have more to pay YOU>
I have just purchased my family’s private insurance. For a family of 5, we get full coverage for $400 a month.
My friend only has catastrophic insurance and pays $200 a month. So many prescriptions now are free so she never has to pay for those when her kids get sick. She saves alot by having this minimal insurance.

I don’t want my government in my face with my body and my health.

This is all about power folks.

Look at California. They were bankrupt. What did they do? Passed a budget that was all conservative. Their drilling on the coast to make billions. There cutting education and welfare. It’s a total example of when you are totally broke what do you do? You turn to conservative principles. That was the only way the state would prevent bankruptcy. They were forced to do conservative things, like no more spending.

This should be all the example we need with the healthcare issue. We are broke, and we don’t need government to take over this. Just look at Medicare? That’s what this will be.
Medicare for all. That is disaster. Medicare is bankrupt.

Republicans have had plans. Totally shut out of committee meetings. Media totally shuts them out too so it looks like they are doing nothing. But they are shut out.
Dictatorship is happening in our country .
And Obama is a dictator.
It has nothing to do with his race.
It has to do with his liberalism.
Wake up democrats and see what is happening.

We do not have a healthcare crisis. It’s fear mongering from liberals.

Posted by Lynn | Report as abusive
 

The saddest thing with Obama is that our country was so hopeful in having a first black president that they forgot to look at the principles of that black man. They were so overwhelmed just that he was black and showed how far we had come with race relations. But the saddest thing was, this black man DID not represent what the majority of Americans value. And because of this, his presidency will be a failure and our country is going to suffer because of this man.
A lesson to learn is that it would be best to elect a president based on his values and principles rather than his race or color. We cannot simply vote based on a color or religion or pop culture phenom. Too many americans voted for Obama because he was black and promised everything under the sun and not because he was a good candidate and had good principles.
Sadly, now that the honeymoon is over, and reality has hit, people are suffering. And the checks and balance system is off with the legislature in his favor also. The only thing to stop the drastic takeovers is for the people of this country to revolt. Much like what is happening in Honduras. Eventually, people will wake up. But it may be at a high cost.

Posted by Lynn | Report as abusive
 

Okay, can anyone show when unemployment went down BEFORE we got out of a recession? There have been 13 recessions since the Great Depression, we NEVER came out of a single one of them because of the governments action or inaction. The US government might be the single largest employer, but compared to the rest of the remaining US employers, they are a drop in the bucket.

It is up to the US consumers to decide to no longer believe the media hype and US business owners to be willing to grow their businesses. People still need to eat, need electricity to run appliances, still call their friends, raise children, and work. Most countries in the world have never seen 10% unemployment (they have never been that low in those countries. Many have unemployment upwards of 20% and they still seem to work as a country. When unemployment falls below 6% in the US, economists are worried that we have a labor shortage! This is nowhere near the longest recession nor is it the deepest recession, but what else would the media have hyped about to sell sensationalism? Swine flu?

 

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  •