Tales from the Trail

Just a few quick thoughts ahead of the Labor Day weekend. President Barack Obama plans to unveil a package of measures to stimulate hiring and the economy next week, although we are assured this will absolutely not be a second stimulus. I guess that means it won’t have a major price tag attached, in terms of its effect on the deficit. But you also have to wonder how much effect it will have on the economy, even if Obama manages to get any of it through Congress.

Some relief, then, that this week’s economic numbers have not been as grim as many had feared. The private sector is not dead and buried, if today’s payrolls report is anything to go by. But don’t expect growth or hiring to pick up nearly fast enough to save the Democrats from pain in November.

Finally, take a look at our special report on the Food and Drug Administration’s efforts to crack down on increasingly aggressive marketing tactics by drug companies. Critics accuse Big Pharma of pushing medicines on people which they often do not need, without fully disclosing the risks. Sadly, even the FDA admits it is outgunned, and lacks the resources to keep pace.

Here are our top stories from today…

Obama says to address new economic ideas next week

President Barack Obama will outline new measures next week to boost the economy after August data showed again that jobs — the central issue in November elections — were being created too slowly. Obama, speaking to reporters in the White House Rose Garden, greeted a better-than-expected August employment report that showed thousands of new private sector jobs were created as “positive news.”

For Alister Bull and Jeff Mason’s full story, click here.

Payrolls data offer ray of hope for recovery

Employment fell for a third straight month in August, but the drop was far less than expected and private hiring surprised on the upside, easing pressure on the Federal Reserve to prop up economic growth. Nonfarm payrolls fell 54,000, the Labor Department said, helping assuage fears of a double-dip recession in financial markets that had looked for a drop of 100,000 jobs.

President Barack Obama will not be running a “victory lap” when he addresses the nation on Iraq this evening. Quite rightly, he points out that there is still a lot of work to be done to make sure Iraq “is an effective partner for us.”

There are several other reasons why tonight’s speech cannot be a victory lap. The first, Republicans argue, is that Obama is trying to take credit for the achievements of his predecessor George W. Bush, and specifically the “surge” in troop numbers (a policy Obama opposed at the time). The second, as the White House well knows, is that a victory lap might seem inappropriate in light of the nation’s economic woes. Indeed, Obama will be talking about the economy tonight, and the need to refocus resources back home.

 A third reason, perhaps, is that it could sound disingenuous to triumphantly declare the end of combat operations in Iraq while 50,000 armed American troops remain in the country. Not all of them will be working as trainers or instructors, and it is obvious that the troops will still be ready for combat if that should prove necessary.

While President Barack Obama went book shopping on Martha’s Vineyard and bought a novel about a family from the Midwest –“Freedom” by Jonathan Franzen — Vice President Joe Biden was out in the Midwest talking the talk in St. Louis.

VPOTUS assured Democratic Party leaders that they would retain control of Congress in November because Republicans were out of touch.  ”They are going to look at what the Republican Party is really offering — more of the past, but on steroids,” Biden said.

That brings us to the State Department press corps ALMOST asking George Mitchell about baseball pitcher Roger Clemens, but refraining and sticking to the news at hand – a fresh attempt to jumpstart Middle East peace talks with a meeting in Washington next month.

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.

Sounds like people had plenty to say about the future of Fannie Mae and Freddie Mac at a Treasury forum today. For example, Bill Gross of PIMCO, who oversees more than $1 trillion in assets, called for a massive program to refinance mortgages at low rates as a way to lift the economy – a more sweeping recommendation than Treasury organizers had anticipated. “It is not tenable to leave in place the system we have today,” Treasury Secretary Timothy Geithner acknowledged, but said the government must still have some role.

The bailed-out mortgage giants have received nearly $150 billion in taxpayer funds since they were placed in government conservatorship, and are likely to need tens of billions of dollars more to survive.

A new Reuters/Ipsos poll on the Kentucky Senate race shows Republican Rand Paul, a Tea Party favorite, with a narrow 5 point lead over Democrat Jack Conway among likely voters. The poll also probed voter views on the controversy about Paul’s alleged college pranks, and found that 53 percent of Kentucky voters had not heard anything about it. Among Republicans, 12 percent said the stories made them more likely to vote for Paul.

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.

As the administration focuses on Iran, we take a look today at the fallout – a disturbing deterioration in relations between the United States and Brazil.

Our exclusive report from Washington and Brasilia describes how a row over Iran has pushed relations between the two Western hemisphere economic giants to “rock bottom.” The fallout from Iran remains worse than either side will acknowledge publicly, and there is a real risk of a longer-term drift that could threaten trade and business ties. “They’re in the freezer,” was how an upper-level source in Brasilia characterized relations.

It is especially disappointing, of course, since both sides had anticipated improved ties under President Barack Obama, who made a point of fawning over his Brazilian counterpart Luiz Inacio Lula da Silva last year, calling him “my man” and “the most popular politician on Earth.”

Tempers ran high in the Senate today as Republicans blocked a $30 billion Democratic plan to help community banks boost lending to small businesses. Democrats are fast running out of time to show they are doing something to cut unemployment ahead of November’s elections, but this is just the latest bill to founder on objections from Republicans and some centrist Democrats, who argue extra spending should be covered by cuts elsewhere in the budget.

This time Republicans complained they were shut out of the amendment process and that a billion dollars of agriculture spending had been attached to the legislation. Mindful that voters think his administration is not doing enough to create jobs, Obama had been calling for the Senate to pass this bill, and he will likely be dismayed by this latest setback.

If that was the thorn in Obama’s day, the rose was probably his appearance on ABC’s ”The View”, sitting on a couch peppered with questions by five women, including Barbara Walters and Joy Behar. Referring to how his family discuss the highs and lows of their lives, he talked about the “roses” and “thorns” of his life as president, revealed he hadn’t been invited to Chelsea Clinton’s wedding and said his i-Pod included Jay-Z and Frank Sinatra but thankfully nothing by teen sensation Justin Bieber.