Washington Extra – Obama takes the wheel
Second quarter GDP data gave us more evidence that the recovery is slowing, with the pace of consumer spending easing. True, business spending picked up, but analysts said cash-flush companies were merely making up for ground lost during the recession. There was a big rise in inventories too, a worrying sign if businesses have too much stock in warehouses and on shelves, and people just aren’t buying.
Outside Washington, Obama took his “recovery summer” campaign to car factories in Detroit, where he patted himself on the back for keeping the plants open and saving jobs. In what is sure to be a major theme in the run-up to the November elections, he riffed on the theme of Republicans as the “Party of No.”
“If some folks had their way, none of this would have been happening. Just want to point that out, right? I mean … this plant and your jobs might not exist,” the president said. “There were leaders of the “Just Say No” crowd in Washington. They were saying, ‘Oh, standing by the auto industry would guarantee failure’… They don’t like admitting when I do the right thing. But they might have had to admit it.” As Toby Zakaria observed in her blog today, “Probably shouldn’t hold your breath waiting for that Mr. President.”
In what we hope is not a metaphor for his economic leadership, the president also went behind the wheel of a black Chevy Volt, the new environmentally friendly car backed by government bail-out cash which has yet to fire up the enthusiasm of auto reviewers. He buckled himself in and drove haltingly 10 feet at a crawling speed. “Pretty smooth,” the president concluded. Here’s hoping the recovery finds another gear.
Here are our top stories from today…
Imports slow US Q2 growth, business spending surges
Economic growth slowed in the second quarter as companies invested heavily in equipment from abroad and the pace of consumer spending eased, raising concerns about the recovery in the rest of 2010. The fastest rate of business spending in four years would normally be associated with increased confidence in the economy, but analysts said cash-flush companies were merely making up for ground lost during the recession.
For the full story by Lucia Mutikani, click here.
GDP data a grab bag of good and bad
Friday’s gross domestic product data showed a feast-or-famine recovery, with business spending picking up while consumers remained cautious. Final sales to domestic buyers, a closely watched measure of demand, jumped at a 4.1 percent annual rate in the second quarter, well above the first quarter’s revised 1.3 percent rate. Yet much of that demand was filled by imports, which offers no jolt to the faltering economy.
For more of this story by Emily Kaiser, click here.
Obama says automaker rescues paying off
President Barack Obama on Friday defended his decision to bail out General Motors and Chrysler in 2009, saying he had proven the naysayers wrong as he touted his economic policies ahead of the November congressional elections. On a visit to automakers’ plants in recession-battered Michigan, Obama sought to boost confidence in his handling of the auto industry’s crisis as part of an economic agenda that has drawn Republican complaints of a government overreach.
To read the rest of Caren Bohan’s story, click here.
White House: Europe crisis ‘stunted’ US, world growth
The White House blamed the second quarter slowdown in U.S. economic growth reported on Friday on “headwinds,” including the debt crisis in Europe. Gross domestic product expanded at a 2.4 percent rate, the Commerce Department said in its first estimate on Friday, after an upwardly revised 3.7 growth pace in the January-March quarter, as companies invested heavily in imported equipment and the pace of consumer spending eased.
For more of this story by Patricia Zengerle, read here.
What we are blogging…
Obama swipes at “just say no crowd”
President Barack Obama in Detroit demonstrated what is sure to become a familiar theme in the run up to the November elections — Democrats painting Republicans with variations on the ”Party of No.”
To read Toby Zakaria’s full blog, click here.
House investigators recommend reprimand for Rangel
Some of Representative Charles Rangel’s colleagues thought the New York Democrat merited a reprimand rather than a more serious punishment of censure or expulsion for alleged violations of ethics rules in the U.S. House of Representatives. “The recommendation we had was a reprimand,” Representative Gene Green, who led the two-year House ethics committee investigation into Rangel, told reporters.
For more of Donna Smith’s blog, click here.
Opinion from our columnists…
Afghanistan and America’s troubled backyard
The United States is spending around $6.5 billion a month on the war in faraway Afghanistan, where a large part of its effort is meant to help the government assert its authority, fight corruption and set up functioning institutions.
Closer to home, the U.S. has allotted $44 million a month to help the governments of its closest neighbors – Mexico and Central America – assert their authority, fight corruption and set up functioning institutions. The two cases raise questions about American priorities
For Bernd Debusmann’s column, read here.
For more stories from our Washington correspondents visit www.reuters.com and stay informed.
Photo credit: Reuters/Larry Downing (Obama drives a Volt)