Galen: Don't Root for Failure
The economic news this week has been dreadful:
Housing prices: "Home prices have double dipped, dropping to new post-Recession lows." -- US News & World Report.
Foreclosures: "Foreclosed homes, selling at bargain-basement prices, are dragging the market down, and homeowners are still desperately trying to stay out of foreclosure." -- LA Times
Stock Market: "As of June 1, 2011, the Dow Theory gave a warning of a significant downside correction for the general stock market, as the Dow Industrials and Transports both closed below 5-week lows." -- Inside Futures
More Stock Market: "New stock market formula: Recession + losses = extreme fear." -- LA Times
Manufacturing: "U.S. factory orders fell in April amid weaker demand for big-ticket items." -- Wall Street Journal.
More Manufacturing: "U.S. manufacturing economy heading in the wrong direction." --- Plastics Today
Jobs: "38,000 private sector jobs added on ADP [in their report for May] was much, much lower than a lot of people were expecting to see." - Morningstar
General Economy: "The weaker-than-expected number follows a string of data that indicate the U.S. economy struggled in May. Regional factory reports were weak, jobless claims remained high, and the Conference Board's consumer confidence index fell sharply last month." - Wall Street Journal
Consumer Spending: "The latest signs of trouble came from major retailers like Target, reporting consumers pulled back on spending in May. Data from MasterCard pointed to the same concern, showing Americans are shelling out less on everything from furniture to electronics to clothing." - PBS Newshour
U.S. Credit Rating: "Moody's Investors Service warned Thursday that it might review the government's Aaa debt rating for a possible downgrade as early as next month if there is no progress toward a deal in Washington to increase the $14.294 trillion federal borrowing limit and cut deficits." - Wall Street Journal
Greek Credit Rating: "Moody's downgraded Greece's credit rating by debt by three notches from a B1 to a Caa1 and retained a negative outlook, indicating that more downgrades could come." - All Headline News
This time last year the Obama Administration assured us we were heading into the "Recovery Summer." Didn't happen. And this won't be a Recovery Summer, either. The question for the Obamas is: Will the economy begin recovering by NEXT summer?
You will note that the Administration no longer blames the state of the economy on George W. Bush. Obama and the Democrats had control of all the levers of federal power from January 20, 2009 until January 5, 2011 when the GOP took control of the U.S. House in the 112th Congress.
During that time, President Obama spent an extraordinary amount of political capital and Congressional energy on getting the health care legislation passed when, in retrospect, he should have been looking for ways to encourage economic growth.
The rule of thumb for political geniuses like me is: Whatever Americans believe is going on in the economy in August of the election year is what voters will take to the polls with them in November when they vote for President.
By November of 1992 the economy was, in fact, beginning to recover but Gov. Bill Clinton (aided and abetted by my back-door neighbor James Carville) continued to hammer on how bad things were and the George H.W. Bush campaign couldn't convince voters things were looking up.
The result was Bill Clinton taking the oath of office at noon on January 20, 1993.
Every month that slips by with bad economic news like that litany above, is another month that Americans will worry about their family's economic future. Every month that has unemployment -- no matter how it's counted -- at or near nine percent is another month less to get that measure at or below seven percent by Eection Day 2012.
Here's the quicksand danger for the GOP over the next 17 months: They cannot appear to be cheering bad employment numbers; bad housing numbers; bad manufacturing numbers; bad … everything numbers.
Republicans can't put themselves in the position where voters believe they are applauding continued economic hardship so they can win control of the White House or the Senate or more seats in the House.
Voters have a right to believe - in spite of all the evidence to the contrary - that their elected officials are Americans first and partisans second.
Take care not to be seen rooting for failure.
On the Secret Decoder Ring today: Links upon links upon links. Also another in the excellent (and never-ending) series of license plate Mullfotos and a Catchy Caption of the Day.