So Much For "Recovery Summer"

by Pejman Yousefzadeh on September 4, 2010


With the latest employment picture disappointing all who had hoped for more robust activity on the employment front, it is only natural that the White House would put out the Labor Secretary to tell us that despite what our lying eyes say, “there are jobs out there.” But this response seems less a part of a coherent strategy on the part of the Obama Administration, and more a sign of deep panic. As does the story that the Obama Administration is considering some form of emergency economic stimulus to get the economy back on track–preferably before the midterm elections take place. No one can possibly think that any emergency stimulus will have a discernibly positive effect on the economy prior to the midterms, of course, and one wonders what kind of long term effect any emergency stimulus might have. As always, with this White House, it is not clear that it has fully thought through its plans on how to revive the economy.

And of course, it is worth noting that sweeping economic problems under the rug is no way to solve them:

Flanked by members of his economic team – including outgoing Council of Economic Advisers Dr. Christina Romer, whose replacement has yet to be named – President Obama chose to look at the silver lining in the economic clouds of today’s jobs report – not even mentioning that August saw a net job loss of 54,000 jobs.

“In the month I took office, we were losing 750,000 jobs a month,” the president said. “This morning, new figures show the economy produced 67,000 private sector jobs in August, the eighth consecutive month of private job growth. Additionally, the numbers for July were revised upward to 107,000. Now that’s positive news, and it reflects the steps we’ve already taken to break the back of this recession.”

The net job loss for August is largely because of the layoffs of 114,000 Census temporary workers.

[. . .]

Today the president refrained from mentioning the net job loss of 54,000 jobs, or ever that August brought a net job loss. He said that the 67,000 private sector jobs created were “not nearly good enough” and said he would “in the weeks ahead” be detailing “further steps to create jobs and keep the economy growing, including extending tax cuts for the middle class and investing in the areas of our economy where the potential for job growth is greatest.”

Alas, no real points for honesty here.

I suppose that this won’t help the general mood:

The U.S. government is likely to take a loss on General Motors Co [GM.UL] in the first offering of the automaker’s stock, six people familiar with preparations for the landmark IPO said.

Subsequent offerings of the government’s holdings may be profitable depending on how investors trade the newly listed stock, the sources said.

But the question of whether taxpayers are ultimately made whole on GM’s $50 billion bailout could be left open for years, the people said.

It could take more than three years for the Treasury to sell down its remaining stake in GM after the IPO, one person said. That would push a final accounting into the next presidential term.

This just gets worse and worse, doesn’t it?

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