A Disastrous New Report on the Economy

by Pejman Yousefzadeh on July 28, 2012

Barack Obama came into office promising to build up the economy. Republicans should borrow a phrase from the president and remind voters that he didn’t build it:

The United States economy has lost the momentum it appeared to be building earlier this year, as the latest government statistics showed that it expanded by a mere 1.5 percent annual rate in the second quarter.

The mired recovery makes the United States more vulnerable to trouble in Europe and, at home, the potential expiration of several tax breaks and other buoyant measures at the end of the year, known as the fiscal cliff. It also illustrates the election-season challenge to President Obama, who must sell his economic record to voters as the recovery slows.

Growth, as measured by the gross domestic product, lagged as consumers curbed new spending and businesses held back. Several bright spots in the first three months of the year, including auto production, computer sales and large purchases like appliances and televisions, dimmed or faded away altogether in the second quarter, and government at all levels continued to cut spending. Growth was not strong enough to drive down the unemployment rate, which has stalled above 8 percent in recent months.

The administration’s response is to say that at least the economy is growing, which given the paltry economic numbers and the increased possibility of yet another recession is hardly a strong response to the bad news. Of course, other responses may soon follow. I might accuse Team Obama’s political arm of many things, but stupidity is not one of them. They know that the president’s standing with voters is diminished because of the bad economy, and they know that they have to distract from the bad economy to try to get back on the offensive.

The problem for Team Obama is that they are running out of ways to get the focus off of the economy. What are they going to do? Drone on and on for the umpteenth time about Bain and tax returns? That line of attack hasn’t exactly brought about the desired results. Will Team Obama focus on the gaffes Mitt Romney made while he was in Great Britain? They are doing that already but who in the United States is really going to have his/her vote changed because of some verbal stumbles Romney may have made overseas? Does anyone really believe that tempest in a teacup is going to overshadow long term and significant concerns about the economy and about the increased possibility that we may slip into a second recession?

Every new economic report chips away at this president’s political standing. Unless the economy turns around exceedingly quickly, Barack Obama’s troubles will multiply. Pointing to Romney and screaming “but he’s worse!” to the voters won’t help.

Previous post:

Next post: