The current Federal Reserve Report shows that the economy is improving and consumer spending is growing. Meanwhile, the President’s message of optimism is resonating, especially in the former “rust belt” states of Michigan, Ohio, and Wisconsin. This is good news for the country and the Democrats. Moreover, the President and the Democrats appear to have temporarily recaptured the narrative on the economy. It remains to be seen if they can preserve their hold.
The Republican brand, even on the economy, has become indigestible at least the narrative being advanced by their presidential candidates. The actual facts regarding the economy are not on their side despite their spin, distortions, and lies. The Republicans’ dilemma bears a little examination.
GOP elders, especially in the Congress, were convinced at the outset of the Obama Administration that a “failed economy” would sink the President’s prospects for a second term. They knew the economy had tanked under President Bush because they were complicit. All the Republicans in the Congress had to do now was thwart the new president’s every attempt to rescue the failed economy he inherited from G.W. Bush. Between John Boehner and Mitch McConnell, they erected every conceivable legislative and arcane procedural barrier available to them including a record number of filibusters.
So what happened? Why is President Obama not on the ropes? Why is his job approval rating slightly above 50 percent?
Let’s begin with the observation that the Republicans may have overplayed their hand. Americans were looking for effective government, more jobs, economic justice, and reasons to feel optimistic about the future. On this, the Republicans were out of step. They lost the public, especially independents, Latinos, African Americans, and the Millennials.
The President initially tried accommodation, then capitulation born from desperation to get something accomplished. His prolonged frustration led to the realization that cooperation was fruitless. He slowly began to exercise the power of the “bully pulpit” combined with executive authority and public confidence began to improve.
The President now tells the American people what he, working with them, has accomplished these past three years despite GOP obstruction.
- 23 months of steady job growth.
- Unemployment is currently at 8.3 percent, the level of President Obama’s first full month in office.
- The private sector added over 3.7 million jobs in 23 months.
- American manufacturers added nearly 400,000 jobs across the country, the most since 1990.
- GM is again the number 1 automaker earning the highest profits in its storied 100-year history. (Note: Even in the recent Michigan Republican primary, roughly 4 in 10 voters interviewed as they left their polling places said they supported the government rescue plan for the auto industry. In Detroit, car makers and parts companies once fearing extinction added more than 38,000 jobs in 2011, and automakers already have announced plans to add 13,000 more to the payroll in 2012.)
- Chrysler is growing faster than any car maker in America. Sales in February were up 40.4 percent.
- Wall Street’s profits were greater under the Obama Administration than that of his predecessor.
- The DOW Jones industrial average closed above 13,000 on Tuesday last week for the first time since before the recession.
- The NASDAQ hit its highest level since 2000.
- Millions of Americans are benefiting from the Affordable Care Act.
- There are more operating oil rigs in the Gulf under this administration than its predecessor. The fact is the U.S. is now a net oil exporter for the first time since 1949.
- The current Federal Reserve Report (which covers 12 Reserve Districts) gives us hope. It notes a modest to moderate pace in increase in overall economic activity the first two months of this year. Manufacturing continues to expand at a steady pace across the nation with some Districts reporting increases in new orders, shipments, or production. In other Districts, there are increases in capital spending, especially in auto-related industries.
- Activity in nonfinancial service industries is stable or increased. Reports of consumer spending were generally positive except for sales of seasonal items. The sales outlook for the near future was mostly optimistic.
- Tourism remained strong in some Districts.
- Commercial real estate markets also showed positive results in some areas.
- Most importantly, hiring increased slightly across several Districts.
- Yes, the recovery is fragile and it might take a hit with rising gas prices as the summer months approach. However, on the same point, the NYT of March 2 (Auto Sales Pick Up Pace Despite Rising Gas Prices) reports that “auto sales jumped 16 percent last month to the highest level since before the recession, helped by declining unemployment and improving consumer confidence even as gasoline prices topped $4 a gallon in parts of the country.”
- Demand for oil is down while supply is up which means there are other causes driving prices up.
The President should tell us what those causes are as he travels the country meeting with ordinary Americans in their communities. Moreover, he should note publicly that Republicans never criticize speculators even though they control 80 percent of the oil futures market. It is also worth noting that America’s dependence on foreign oil has decreased every year of this President’s administration.
These facts are not partisan; they are there for everyone to analyze. The President appropriately channels the optimism Americans want to feel; the spirit that the country is coming back.
So, what will the Republicans talk about regarding the economy from now until November? The overarching theme among the presidential aspirants will be “government intrusion”, “big government”, anti-free market, and, oddly enough, weak on national security – if you can imagine the audacity of this last assertion.
Moreover, each of them will assert, inaccurately, that the debt under this president is plunging the U.S. into the status of Greece. They will demand cuts in Social Security, Medicare, and Medicaid that will decimate what’s left of the middle class while undercutting a fragile economic recovery.
Economist Paul Krugman notes that a review of the budget proposals of the four Republican candidates by the nonpartisan Committee for a Responsible Federal Budget, according to an “intermediate debt scenario”… “Would all lead to much higher debt a decade from now than the proposals in the 2013 Obama budget”
We should expect each of the GOP’s candidates to portray any positive economic developments in the most inaccurate and negative fashion possible. It will be amusing, almost pathetic, to watch them claim that up is down, left is actually right, and that 1 plus 1 really equals 3.
Facts and truth are casualties to demagoguery. This is the most probable GOP narrative for the balance of 2012. Let’s hope that the politics of hope and optimism combined with an economy no longer on life support do not fall victim to lies, spin, and demagoguery.