Tales from the Trail

President Barack Obama’s a pretty smart guy.

Coatless, the sleeves of his white shirt rolled up, microphone in hand, bottled water at the ready, he fielded questions for an hour from ordinary folk perched on picnic tables and settled into Adirondack chairs in the leafy backyard of Ohio natives Rhonda and Joe Weithman in Columbus.

Nine asked about pocketbook issues — pension plans, jobs, Social Security, the cost of healthcare and childcare. Obama sprinkled his predictable answers with personal touches like how his and wife Michelle’s student loans took 10 years to pay off and were mostly higher than their mortgage, and how the fine print in credit card statements could flummox any of us, including “a pretty smart guy” like him.

The 10th question was shouted from left field. As Obama made his way out of the Weithmans’ garden, a reporter wanted to know if he regretted inserting himself into the emotionally charged debate over whether a Muslim cultural center and mosque is built near Ground Zero in New York City.

Obama, a former constitutional law professor, spoke at length on Friday night about religious freedoms and the legal right of Muslims to build it, setting off a political firestorm and requiring a “refinement” by lunchtime on Saturday when he said he was not commenting on the wisdom of such a move.

“The answer is, no regrets,” he said today and quickly moved on.

 Five words. Pretty smart.

 Here are our top stories from today…

Obama: U.S. must tackle deficit without denting recovery

President Barack Obama said the United States must work out how to control its long-term deficit without hurting an economic recovery, which remains hobbled by a battered housing market. Obama acknowledged the deficit is worrying Americans and said cutting it would raise the public’s confidence.

Gloomy housing data today with home builders’ optimism hitting almost a 1-1/2 year low in August, which along with other recent economic reports suggests the slowdown continued in the third quarter. More to come tomorrow when July housing starts are reported at 8:30 a.m. Even if starts edge up a bit, the number to watch is building permits which are an indication of things to come.

President Barack Obama went with familiar themes in Wisconsin where he visited a battery plant and a fundraiser as he began a three-day trip to five states. He took aim at Republicans, saying: “These are the same folks in Washington who made the political calculation that it was better to stand on the sidelines than work as a team to help the American worker.”

The Republican National Committee also had its say today, releasing a video to coincide with Obama’s trip that was a take-off on the dramatic job-quitting flight attendant saga. It showed Democrats in tight races sliding down an emergency chute to evacuate a plane with Obama on board.

President Barack Obama signed a $600 million bill to strengthen border security, and just to make sure the message got through, Homeland Security Secretary Janet Napolitano took the podium at today’s White House media briefing. Immigration has always been a tough political issue, and in an election year no great strides are expected on major reform before the November vote. “It cannot only be done by Democrats. The Republicans need to come to the table,” Napolitano said.

The American consumer is still a cautionary tale. But consumer sentiment appears to have stabilized in August after dropping sharply in July. “Consumers are still cautious, but it is not double-dip material,” said Stuart Hoffman, chief economist at PNC Financial Services Group. In a separate report, U.S. retail sales rose in July but showed hints of lingering economic softness.

And finally, I tried to find something positive to say about Friday the 13th and realized there’s no need, because it’s still Friday!

A new round of extremely violent thunderstorms rolled through Washington this morning and brought with it more stormy economic news. The latest hiccup to what President Barack Obama had hoped would be a “recovery summer” was the news that filings for unemployment benefits rose by 2,000 to a seasonally adjusted 484,000 in the week ended Aug. 7.

Experts had expected a drop in claims and the unwelcome surprise indicated that hiring is still weak and employers may return to cutting staff.

The grim data came two days after the Fed warned that the pace of the recovery had slowed and the trade deficit widened, sending economists back to their drawing boards to revise growth forecasts. China’s economy also showed signs of going off the boil.

President Barack Obama took his attack on the economic policies of George W. Bush to his predecessor’s home state of Texas today, at a pair of Democratic fundraisers.

But even as he hits the campaign trail in earnest,  we wonder how much use the president will be in boosting the electoral fortunes of his own party in November’s elections. For sure, the president will help enormously to bring in the bucks, but how many votes will he corral as well?

Many Democrats will want to keep their distance from a president whose approval ratings just keep falling. Bill White for one. The Democratic nominee for Texas governor declined an invitation to attend Obama’s  events, a decision the White House said it didn’t take as an insult.

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.”

An election-year debate over tax cuts and deficits is heating up as Republicans press for extending all of President George W. Bush’s tax cuts and Democrats debate what to do against the backdrop of a slow economy, huge deficits and feared shellacking in the November congressional elections.

House Speaker Nancy Pelosi said on Thursday that Democrats support extending tax cuts for the middle class, but allowing the tax breaks for the wealthy to expire in order to help bring down huge budget deficits.

House Republicans immediately fired off an email to reporters saying “Pelosi announces tax hikes on small business.” Republicans argue that allowing tax rates to rise on individuals making more than $200,000 and couples with incomes above $250,000 amounts to a tax increase on small business since many small entrepreneurs report business income on their individual tax returns.

Larry Summers, a top economic adviser to President Barack Obama, is a realist when he says “people are imperfect and we have not seen the last misjudgment.”

So,  in his view, financial regulatory reform is just as necessary as, well, laws aimed at ensuring safe driving.

He cites the late Senator Daniel Patrick Moynihan’s belief that people being people are probably going to drive fast and recklessly, and so it would be wise to encourage seat-belt use, build crash-proof bumpers, design highways more carefully, arrest people for drunk driving, and establish a system that made accidents less likely to result from human error.

Elizabeth Warren paints a disturbing picture of the realities facing the United States and the Obama administration as Americans claw their way clear of the worst recession since the 1930s.

Lobbyists for the financial industry have put the kibosh on market reforms that would aid the recovery. Banks, saved from Tartarus by taxpayer money, are using a free government guarantee against failure to rebuild profits and credit ratings, while either not lending to business or trying to milk American consumers of every dime they’ve still got.

“That’s our plan to rebuild the American economy. Think about it,” says the bespectacled Harvard professor who chairs the Congressional Oversight Panel set up to investigate the $700 billion banking bailout.

Is the economic recession over in the United States? It depends on who you ask, even among President Barack Obama’s advisers.

“Today everyone agrees that the recession is over. And the questions are around how fast we’ll recover,” Larry Summers, the director of the National Economic Council, told CNN on Sunday.

But wait a minute. Not everyone agrees.

Senior White House economist Christina Romer, asked the same question on another television program, said “of course not.”