Consumer confidence in the last month fell to 39.8 according to Bloomberg. It was the lowest point in two years. The President responded to the defeat of his own jobs program by the Democrat-led Senate by returning to the campaign trail to blame Republicans for being obstructionists. This is either the audacity of hope in the Harry Truman 1948 strategy of running against a do-nothing Congress to an upset victory—or an admission that even the President knows he is headed for defeat.
Meanwhile, back at the bottom line the story looks somewhat different. The stock market rallied after the EU tried yet another scheme to stabilize the Greek tragedy in their midst. It may be smoke and mirrors again, but the markets clearly applauded the continued efforts and the willingness of the Germans to step up yet again. Corporate earnings are coming in as expected with a few misses explainable by plausible or one time events. The best news was the Baltic Dry Index which measures shipping of raw materials and commodities was up for August signalling positive future economic growth.
Why the conflicting signals?
While the markets are preparing for better times ahead based upon improving fundamentals, consumers still feel abandoned and uncertain. The thing holding us back now is that lack of confidence. The cause of that lack of confidence is the widely held perception that the country is not going in the right direction. The President’s policies not only have not made things better, but arguably are making them worse longer. His strident campaigning and vilification of his opponents far from helping him just reinforce our view that the President is in over his head and that we made a big mistake in believing in his audacity of hope!
As the President gets more shrill the Republicans are interviewing replacements and so far we have everyone’s second choice, Mitt Romney, as the guy still standing after the mud slinging of many banal debates. We know who we don’t want but we don’t yet know who we might get.
But recovery is not about politics it is about confidence. Confidence enough to unleash hoarded cash in business bank accounts by hiring people instead of buying equipment, materials and other companies. Confidence enough to make bets even while uncertain about the future. Confidence that rational regulation and reasonable taxes will eventually be ahead for us.
For business the reality is while there still is uncertainty affecting confidence there is also worry about being left behind so business spending is forward looking, positional, strategic in focus. For individuals, consumer confidence is a reaction to the present, worry about the future, uncertainty about jobs, kids college education and retirement as individuals we focus on the price of gasoline and the unemployment rate while not realizing it is a lagging not a leading indicator.
So we have not yet talked ourselves into a recession but it was close. What stopped the economy from going over the cliff a second time? It was the fundamentals combined with something missing for a while—just enough optimism—to make a difference.
This is the worst message for President Obama. The people are more optimistic as the election gets closer not because your policies are working but because they can count down the days remaining on your clock, Mr. President. The cruelest irony is while you travel the country accusing your opponents of everything nasty and mean, you look nastier and meaner than your opponents and thus we have lost confident in you and are riding out your term. Even if things get better—much better—we still won’t vote for you again, Mr President, because we realize you don’t believe in the same American dream we still crave and are confident we can have again—after the next election.
That is the true genius of America. We vote with our votes!
- Letters to the President #1009: ‘Consumer confidence keeps sinking’ (ac360.blogs.cnn.com)
- Manufacturing insurance holders ‘could enter recovery’ (premierlinedirect.co.uk)
- Consumer Confidence Drop Could Spell Trouble for Incumbents (usnews.com)
- Mixed Readings on Consumer Confidence in October (eyeonhousing.wordpress.com)
- Consumer confidence at lowest since recession (seattlepi.com)
- Pending Home Sales Continue to Drift Down in September (eyeonhousing.wordpress.com)
- The Confidence to See our Glass Half Full (civicchoices.wordpress.com)
- 60 Percent Of Americans Say Obama Does Not Inspire Confidence About A Recovery (businessinsider.com)
One of the great ironies of the early 21st century will be how our soaring national pride in the election of Barack Obama as America’s first black president and our hopes for his success turned into buyers’ remorse as the President abandoned his inspiring, positive message of audacious hope that got him elected in favor of policies of profligate spending, over-reaching government intrusion, and crushing waves of new regulation as if they were the rightful spoils of his election success. This was decidedly not the change we hoped for.
America did not change or “get soft” as the President recently put it, the President’s own policies have failed him and failed us—and now he projects his own failure on us. We’re not buying it any more.
Whether we agreed with all the President’s political views we gave him the benefit of the doubt but time has shown us what we feared most—this is not working. But as the 2012 election approaches and the President’s popularity sinks steadily in the opinion polls he seems unwilling or unable to moderate his policies.
Why would an obviously smart guy like Barack Obama crash and burn like this?
And don’t play the ‘’ on us, as would say. The President’s failure has nothing to do with race and neither does our criticism of failed policies, worsening conditions and lost confidence. As Americans we want—and need our president to succeed. A large share of our current results from falling confidence in our national ability to dig out of this hole. But the President keeps digging our economic hole deeper.
The reality of a failed Presidency is slowing sinking in. The problem now is all thecandidates are so busy trashing each other that they are missing their best opportunity to be “the one” who will inspire us anew. We don’t need for any of them to run “against the President” and spend their time criticizing him—he is self destructing on his own. We need them to tell us what they plan to do to dig us out of this hole! They need to persuade us they won’t us like President Obama did. We’re looking for a new President who can actually be an effective President.
- Gary Shapiro: Three Things Obama Can Do to Win Re-Election (huffingtonpost.com)
- Barack Obama: European banking failure fuelling US economic crisis (telegraph.co.uk)
- Bob Burnett: There Is No Political Middle Ground (huffingtonpost.com)
The Hits Just Keep Coming for President Obama.
There must be times when President Obama must wonder “what was I thinking”! The piling on of bad news just keeps digging the economic hole President Obama must climb out of before it is time for voters to mark that ballot in November 2012.
Even God seems a little grumpy these days sending an earthquake and then a hurricane through Washington DC . Who could blame him after this list of body blows:
Holy Gallup Polls!
- Net Zero Jobs ‘Created or Saved’ in August. There were zero net nonfarm payroll jobs created in August with 58,000 fewer net jobs created during July and June.
- Solyndra Goes Dark. Solar energy darling Solyndra visited by the president last year and granted a $535 million US DOE loan guarantee filed for bankruptcy, shut down its Fremont, California plant visited by the President and laid off its 1, 100 workers.
- Ozone Rules Moonwalked. Amid growing political pressure, President Barack Obama on Sept. 2 told U.S. EPA Administrator Lisa Jackson to withdraw the controversial draft Ozone National Ambient Air Quality Standards.
- Emissions reporting—Not on My Watch! In addition on August 19 US EPA postponed for four years the controversial greenhouse gas emissions reporting rules that require emitters to release internal data about their operations to the public. Industry groups squealed loudly about the costs and opposed sensitive information to competitors.
- The Tea Party Strikes Back—Well in the House at Least. In an Aug. 30 letter to Speaker of the House John Boehner, President Barack Obama said his administration is considering seven proposed regulations that would have an estimated cost to the nation’s economy in excess of $1 billion each. In response, House Majority Leader Eric Cantor, R-Va., proposed a legislative agenda to repeal the 10 “most harmful job-destroying regulations” includes several proposals affecting coal-fired power plants the Administration is trying to save for the next term by withdrawing them.
- Show Me the Money!!! September 30 is the end of the Federal fiscal Year and while the House passed its budget the Senate has not so a new spending battle looms over appropriations or continuing resolutions for the Transportation Department, FAA extension and other spending.
- Consumer Spending Increased but Only Because We ate Savings. Personal spending increased 0.8% in July from June but annualized 3-month moving average of real consumer spending held at July’s low 0.4 percent pace as energy prices rebounded. But to get even this small increase in real spending, consumers had to eat savings since personal savings rates fell to 5.0 percent from 5.5 percent, as real disposable income fell 0.1 percent from July.
- Consumer Confidence Tanks. Consumer confidence plunged 14.7 points in August to 44.5. The drop in the index was the largest since October 2008 in the aftermath of the Lehman Brothers collapse and the main wave of the financial crisis. Uncertainty surrounding the debt-ceiling agreement, S&P downgrade and volatile stock market performance caused consumer confidence to fall.
Prepare Three Envelopes
You remember that old joke, don’t you? The new guy finds three envelopes in his desk the day he starts his new job. The instructions say: open them in the number ordered when you get in trouble.
Envelop # 1: Blame your predecessor! Ok that didn’t work and after three years no one believes it any more!
Envelope #2: Re-organize. OK, Mr President you had a chance with the Deficit Reduction Commission report prescribing all manner of bad medicine. It seemed awful at the time so you rejected its recommendations. Maybe it’s time to call them back for a do-over. Your economics team except for Treasury Secretary Geithner are all gone but it didn’t help. Defense Secretary Gates “retired” but everyone thought he did a great job so leaving does not help you, Mr. Obama. EPA Administrator Lisa Jackson’s proposed regulations are hammering you and you keep withdrawing them but your base still likes them so firing her is only half a loaf. If you fire Hilary Clinton she might run against you again.
There is only one thing left to do Mr President.
Envelope # 3: Prepare Three Envelopes and leave them in the top drawer of the desk! Besides retiring now will get you lifetime health care with no death panel and a nice pension.
Then you can tell your critics to sit on it and twirl! The Republicans will be nonplussed since none of their candidates have a chance unless they can run against you. Your party will have a food fight over replacing you—it is such poetic justice!
- President Zero; Update: White House runs away from costly EPA regs (michellemalkin.com)
- Obama scraps tighter smog rules (bbc.co.uk)
- Breaking: Obama asks EPA to withdraw proposed ozone rule (junkscience.com)
- Obama Gets Hearts – and Darts – for Halting Proposed Ozone Rule (blogs.wsj.com)
- Obama requests EPA withdraw ozone draft law (marketwatch.com)
- Obama undercuts EPA, refuses to raise ozone standards (americablog.com)
- Obama asks EPA to back off draft ozone standard (latimes.com)
- Obama Halts Controversial EPA Regulation (time.com)
The soap opera playing out over raising the US debt ceiling is more politics than reality. Neither political party wants to go into the 2012 elections with responsibility for more red ink on their shoes. The United States is not going to default in our payments of principal and interest on our debt and everyone knows this. That is why the markets have watched this debate with relative calm and baked into the numbers a presumption that some last minute face-saving deal will be done once enough mud had been slung on the face of the opposing party.
But while this may be politics as usual there are instructive lessons about new realities resulting:
- Our Negative view of our Elected Leaders is confirmed. As voters we have tolerated the slovenly behavior of our elected officials and the way they spend our money. The debt ceiling has been raised scores of times in the past without much debate. This time it has become a big deal because while Democrats and Republicans are using it to score points, the rest of us are using it to measure the people we elected by their approval ratings in the polls. Congress scores worse than the President, but his ratings are racing to the bottom to match them.
- It’s the Debt, Stupid. The debate in Washington may be about raising the debt ceiling. The debate on Main Street is about the enormous size of the accumulated debt and the reckless willingness to keep spending. We’ve lost confidence in our leaders because we see them weakening our country, undermining our values, and stealing from our children to play politics.
- President Obama is a Disappointment. We elected Barack Obama because he inspired us to live into our aspirations as a great nation. We demonstrated once again de Toquiville’s 200 year old observation that America has the capacity to reinvent ourselves for the challenges we face. We hoped that the change the President spoke of would lead us there. But he baited and switched us reverting to the most corrosive form of class warfare, entitlement expansion and free-spending liberal instead of the centrist we thought we were choosing. We needed the president to help fix our broken economy but his policies have made it worse. So “Yes We Can” is turning into “Oh, No We Won’t” as the president misread his mandate and no longer seems a good fit for our needs, as the voters might say as we hand him his pink slip.
- Democrats and Republicans are both the same, but the TEA Party member have scruples. This is the ‘pox on both your houses’ lesson we seem to keep relearning. The partisan differences are real and debating them is good but we’re losing confidence in both parties because we have come to believe their debates have more to do with scoring points than principles. While the President and Democrats have trashed the TEA party candidates and tried to discredit those who were elected a funny thing has emerged. The TEA party members are the only group that has remained true to the principles they told us about as candidates. TEA party members in the House have given speaker Boehner fits with their unwillingness to cave into demands for compromise over spending cuts. While their resistance has delayed a settlement of the debt ceiling issue, it fundamentally frames the 2012 election debate around the core issue of spending, overspending and more spending that got us into the debt overhang we face. Thank you!!!!!
- Whose Country is this Anyway! This debate has been a constant reminder of our core values and the choices we face as a nation. We’ve been slackers as citizens coasting along letting our elected representatives get away with bloat, blather, and balderdash on our behalf and with our checkbook. It is like groundhog day only we are watching the movie Network and the line keeps being repeated over and over again:
“We’re mad as hell, and we’re not going to take this anymore.”
The 2012 election is a referendum not only on President Obama and our overspending ways. It is also a referendum on incumbents and most will be found wanting. It won’t be a good year for candidates, we’ve been tricked before with uplifting speeches. We’re looking for real people who share our values and will do what they promise once elected.
- Trey Ellis: Debt Ceiling Is Health Care All Over Again (huffingtonpost.com)
- Mitchell Bard: Lesson From the Debt Ceiling Negotiations: The GOP Is Now Run by Far Right Ideologues (huffingtonpost.com)
- Boehner’s two-step plan: Risky politics (capitolhillblue.com)
- The Future Of America, Or Politics As Usual? (trueconservatism115.wordpress.com)
- Armageddon clock ticks down on debt deal (fullcomment.nationalpost.com)
- Boehner delays vote on his debt-ceiling measure (seattlepi.com)
- Death To The Debt Ceiling Negotiations! (huffingtonpost.com)
- Analysis: The politics behind Boehner’s two-step debt hike – Reuters (news.google.com)
- US debt ceiling crisis: Why Republicans won’t compromise | James Antle (guardian.co.uk)
- Tea party to Boehner: Stand firm (capitolhillblue.com)