US Prez Election 2012 Thread - Opinions and Discussions

[Coito ergo sum]

Too bad the election isn't being held tomorrow morning.

Probably too bad for Obama, since the chances of him being reelected seem as if they will continue to drop as the economy continues to get worse.

It's also too bad that "Republican Candidate" won't be the one taking the GOP nomination next year.

That is too bad. I have a hope that some meaningful candidate will come forward from the Republicans. They are, alas, a caricature now, with candidates like Palin and Bachmann getting play. The GOP needs someone to step forward that is a serious, and competent, person.

Seeing as how the election is 16 months away, maybe we could talk about the future and some other numbers a bit, rather than cherry-picking the latest polls and snidely partisan pieces about why Obama is another Carter.

Well, the thread is about the 2012 election, and we can't put every single piece of information in every post. You're free to post the information you think is relevant. The latest polls are certainly not irrelevant, and they become more relevant as we follow the trends over time.

Such as:

Obama Losing His Base? Here Are 552,000 Reasons Why That's Wrong

President Obama's 2012 campaign and the Democratic National Committee together raised a staggering $86 million in April, May, and June of this year to re-elect the president. Broken down, more than $47 million of that was raised by the "Obama for America" committee, which surpasses the fundraising totals of the entire Republican field combined. (Note, though, that GOP presidential money-leader Mitt Romney's $18.6 million take in the second quarter didn't include Republican National Committee money, so it's not accurate to compare Obama and the DNC to GOPers, only because we don't know what the RNC has raised.)

So, Obama can rake in the big bucks—no surprise there. The real story is the 552,000 donors who gave to the Obama 2012 effort, "more grassroots support at this point in the process than any campaign in political history," said campaign manager Jim Messina in a video message to supporters. Messina said that 98 percent of donations last quarter were under $250, and that the average donation was $69.

That haul throws a huge bucket of cold water on claims that Obama is losing his liberal/Democratic base. Pollster James Zogby wrote in September 2009 that Democrats were souring on Obama after the health-insurance-reform fight and for his policies on the war in Afghanistan. Liberal TV host Ed Schultz told former White House press secretary Robert Gibbs last year that "you're losing your base." If Obama's donor rolls are any indication, the left appears to be just as motivated in the 2012 race as they were in 2008.

Of course, reams of polling data have been reinforcing this for months. According to Gallup polling, Obama's approval rating among Democrats has held steady at around 80 percent, give or take a few percentage points, since September of last year. Among liberals, Obama's doing almost as well, with approval ratings hovering around 70 percent; it's currently 76 percent.

So all that talk of Democrats and liberals sloughing off Obama? Nothing to it. Today's fundraising numbers prove Obama's still hugely popular, and that whomever the GOP picks to run against him will face the major undertaking of matching the powerful Obama fundraising machine.
http://motherjones.com/mojo/2011/07/oba ... raise-2012

Or maybe this one, which helps illustrate the real reason why Obama will not only win in 2012, he'll quite possibly win an electoral landslide: the Republicans will beat themselves.

The Committee to Reelect Barack Obama?

The trends we saw in GOP presidential polls a few weeks ago continue. Mitt Romney remains the front-runner, but Michele Bachmann continues to gain support and hold second place nationally (and she's currently beating Romney in Iowa). The most interesting thing about this latest Quinnapiac poll is that undeclared right-wingers like Sarah Palin and Texas Gov. Rick Perry are running right behind Bachmann, while also-rans including Tim Pawlenty, Newt Gingrich, Jon Huntsman and Rick Santorum remain in low single digits (Ron Paul hangs on to his 5 percent). That Romney is creaming Huntsman right now even in his home state of Utah would seem to suggest that the man the Beltway loves is never going to catch fire with the GOP base.

All of this could mean one of two things: Romney's dead, because of all the energy on the Tea Party side, or Romney's alive, because of all the energy on the Tea Party side. In this latest poll, Romney's the candidate of 25 percent of likely GOP voters. Bachmann trails him with 14 percent; Palin has 12 and Rick Perry 10. Behind them, Herman Cain gets 6 percent and Ron Paul 5 percent. So that means 47 percent of GOP voters polled like the folks on the far right. If the Tea Partyers coalesce around one of those five, or someone else, Romney's toast.

But it's also possible they won't coalesce. Bachmann has made a surprising surge, but I think these numbers are actually bad for Bachmann. It shows there's a fairly broad base for an extremist candidate, but at 14 percent, she's supported by roughly 30 percent of that base. If other Tea Party favorites look at those numbers and jump in, Bachmann's in trouble.

I still doubt Palin will run; she's having too much fun being an unaccountable wealthy celebrity. That bus tour thing was hard. But she's also a narcissist, and she might look at those numbers and say, "Why not?" Rick Perry is even more likely to say, "Why not?" In fact, the latest buzz is that Perry is making calls to GOP leaders and donors to test the waters, and getting encouragement. On "Hardball" with me Wednesday Politico's Jonathan Martin said he's hearing from GOP insiders that Perry's in, although Perry's people downplay the idea. Martin also floated the notion that Perry might not merely be the Tea Party candidate; he might be the electable guy the party needs, the hybrid of the Tea Party and the "establishment" GOP elders dream of.

Dream on. It's true Perry has a 10-year record as Texas governor (with time as lieutenant governor before that), which makes him a "serious" candidate. But that record is distinguished by his courting the far right with talk of secession, ostentatious prayer breakfasts, and coziness with Texas Confederate stalwarts. Justin Elliott revealed Perry's popularity with groups trying to preserve the memory of Texas's allegiance with the Confederacy. The neo-Confederate, still-secessionist League of the South endorsed Perry in his 1998 race for lieutenant governor, praising him as a member of the Sons of Confederate Veterans, a group that's regularly torn apart by infighting between those who want to honor their heritage and those who want to return to the days of white supremacy. We couldn't confirm Perry was ever a member of the group, but without openly embracing them he's regularly validated their quest for redemption. Perry has honored leaders of the Sons of Confederate Veterans at ceremonies in Austin, and he's resisted efforts to remove Confederate symbols from state buildings. "Although this is an emotional issue," he wrote, "I want you to know that I oppose efforts to remove Confederate monuments, plaques, and memorials from public property. I also believe that communities should decide whether statues or other memorials are appropriate for their community." Perry regularly enjoys adoring profiles in Confederate magazines...
http://www.salon.com/news/2012_election ... rack_obama

Or, if polls and economic numbers this far out mean so much to an election, maybe we could infer some predictive value by looking at some past ones...
July 1983
Reagan's approval rating: 43%.
Unemployment rate: 9.4%
States won by Reagan in 1984: 49

Yeah - that's because at the time of the polls, the economy was starting its upswing and there was not anything close to the economic meltdown that we're currently having - not even close.

The economy right now is headed deeper into the toilet....no, maybe the sewer is more like it. The average duration of unemployment now is about 37 weeks. In 1983 it was about 20 weeks or so. That's a disturbing number. Moreover the economy in 1983 had the capacity to absorb the unemployed worker, as they were in the 1990s because of the new industries that burgeoned in that time. We don't have that now.

The misery index, right now - the combo of unemployment and inflation - is on the rise:

At a recent 12.7, the misery index is at its highest level since 1983, when Ronald Reagan was president and the great bull markets in stocks and bonds were in their infancy. Yet as always, it's worth recalling that things can be (and have been) worse.
The 1983 peak was 14.1, which looks terrifyingly high now but at the time was the lowest reading in five years. http://www.miseryindex.us/raw_data.asp

So - that demonstrates the huge difference between today and 28 years ago. Now we're at the worst we've seen in 5, 10, and 20+ years. Then, the picture was turning rosier -- the economy was demonstrably improving.

The games that we are seeing in Washington at this time are embarrassing, both from Democrats and Republicans. I think we've just reached a point where none of them knows what to do, or has the courage to do what's right even if they could.

[Ian]

"Demonstrably improving" was still subject to debate in the summer of '83. The unemployment rate I mentioned for July '83 was 9.4%... and ticked up a notch the following month.

And I remain unconviced that the economy is in "meltdown" and "heading into the sewer" as you put it. You keep emphasizing not what is actually happening, but the ruin that is surely just around the corner thanks to Obama. I'm not going to say that a major downturn is patently wrong and a lousy prediction (I personally worry about the housing market above all), but statistically what is actually happening right now (and for the last two years) is a mild recovery. The US economy went into the toilet in '08 and is still struggling to climb out - I think what you mean to say is "about to head into the sewer".

[Robert_S]

It's also too bad that "Republican Candidate" won't be the one taking the GOP nomination next year.

That is too bad. I have a hope that some meaningful candidate will come forward from the Republicans. They are, alas, a caricature now, with candidates like Palin and Bachmann getting play. The GOP needs someone to step forward that is a serious, and competent, person.

Won't happen this time around. There are too many people on the right who are addicted to paranoia and indignation. It is the right's own fault really. If they had not tried to exploit base fears and that thing that... -whatever that form of mental illness is that gives Palin her appeal- If they hadn't brought out that crap, they wouldn't be stuck with it.

But no, instead of picking a competent, intelligent, and eloquent person(woman or not), the GOP picked Palin. Instead of a substantive debate on the effects of the proposed national health care plans, they screamed about death panels and disrupted town hall meetings. Now, as stock prices rise but employment rates fail to keep up, we're expected to believe that the very wealthy are not creating jobs because we tax them too much.

There are people, many of them, in the GOP that believe all that and will never vote in the primaries for a candidate with a more sensible view.

[Coito ergo sum]

"Demonstrably improving" was still subject to debate in the summer of '83. The unemployment rate I mentioned for July '83 was 9.4%... and ticked up a notch the following month.

And I remain unconviced that the economy is in "meltdown" and "heading into the sewer" as you put it. You keep emphasizing not what is actually happening, but the ruin that is surely just around the corner thanks to Obama. I'm not going to say that a major downturn is patently wrong and a lousy prediction (I personally worry about the housing market above all), but statistically what is actually happening right now (and for the last two years) is a mild recovery. The US economy went into the toilet in '08 and is still struggling to climb out - I think what you mean to say is "about to head into the sewer".

What's not subject to debate is that the economy now sucks ass and is getting worse.

No - I am referencing what is happening. It's not a prediction. The economy is far worse today than it was 2 and 2 1/2 years ago. We have not improved it. It's WORSE than in 08. It's not getting out of anything. Foreclosures are as bad or worse than they were 08. Unemployment is far worse.

No - I mean to say that economy is heading deeper into the sewer. I think you have blinders on to the reality of how bad it is. Remember - pre-stimulus in January of 09, unemployment was well under 8% -- that's because we needed the stimulus to keep us from going above 8%.

[Ian]

Okay then... I will tell you that you're entirely incorrect that we're worse off now than we were two / two-and-a-half years ago. THAT is completely incorrect.

The US is no longer in negative growth territory - and hasn't been since spring/summer 2009. The recovery is weak, to be sure, and that's a perfectly valid argument for why you're happy to heap tons of blame on Obama, but the notion that things are still getting WORSE is completely, mathematically, indisputably untrue. The growth rate in 2009 was -4.1%. The growth rate in 2010 was 2.8%. The recession is, in fact, over.

Unemployment sucks, but it is not "far worse" since I'd remind you that it had been over 10% and had dropped for months. So, does the last month or two indicate a genuine trend back towards recession? I don't know. Surely you realize there are some factors which might've impacted June's numbers other than the notion that President is leading us wrong. First and foremost by far, the price of oil spiked in spring. And there was a major disaster in Japan, and another disaster in Missouri. And, sometimes unemployment percentages just go up 0.1% in a month, even during a recovery - such as July to August 1983. One other thing worth mentioning - the miserable 18,000-jobs-created-in-June number was the result of 57,000 private sector jobs added and 39,000 government jobs lost. No doubt you'll think that second part is great news, and I wouldn't even debate it much.

No, the economy is not going into the sewer. Maybe it's ABOUT to all come crashing down (again), or maybe it'll limp on at a pitiful growth rate for a while longer, but who knows.

I will, however, admit that 1983 is not a great comparison for 2011. The 1983 recovery was weak and precarious, but it had begun. Perhaps 1971 is another year worth looking at. A genuine recession (negative growth) did start that summer. That summer, Nixon's approval ratings dropped below 50%, and the trend had only pointed downwards ever since he took office. And there was a very vocal and energized movement on the far left that was just aching to face him in the election. And then...

[Tyrannical]

he growth rate in 2009 was -4.1%. The growth rate in 2010 was 2.8%. The recession is, in fact, over.

Is that 2010 growth rate adjusted for inflation? Because inflation is over 3%.

[Warren Dew]

Or, if polls and economic numbers this far out mean so much to an election, maybe we could infer some predictive value by looking at some past ones...
July 1983
Reagan's approval rating: 43%.
Unemployment rate: 9.4%
States won by Reagan in 1984: 49

Yeah - that's because at the time of the polls, the economy was starting its upswing and there was not anything close to the economic meltdown that we're currently having - not even close.

That's not really true. The 1980 recession was really just about as severe as the current recession - possibly even slightly more severe.

The differences were (a) there was no effort to cover up or minimize the causes of the 1980 recession, as there is the causes of the current dip, and (b) Reagan had solid economic policies in place that the more economically savvy could see were forming the foundation of a solid an robust recovery, even if that recovery was only beginning, while Obama has failed to deal with the issues while resorting to short term tricks that make the underlying problems worse.

That said, if Obama quit arguing about what cuts should be made and started supporting, say, the Ryan medicaid and medicare plan to reach his goal of $4 billion in cuts, he'd be reelected by a landslide, just like Reagan.

he growth rate in 2009 was -4.1%. The growth rate in 2010 was 2.8%. The recession is, in fact, over.

Is that 2010 growth rate adjusted for inflation? Because inflation is over 3%.

I don't think inflation was over 3% in 2010, although it is now. Real growth was positive in 2010, even after inflation, and even after adjusting for population growth as well, though I think what people are really looking for is a return to the unemployment and real income levels of 2008, which hasn't happened yet.

The real issue, though, is that, half way through 2011, inflation is running higher and growth lower than in 2010. The prognosis is getting worse, not better.

[Coito ergo sum]

Or, if polls and economic numbers this far out mean so much to an election, maybe we could infer some predictive value by looking at some past ones...
July 1983
Reagan's approval rating: 43%.
Unemployment rate: 9.4%
States won by Reagan in 1984: 49

Yeah - that's because at the time of the polls, the economy was starting its upswing and there was not anything close to the economic meltdown that we're currently having - not even close.

That's not really true. The 1980 recession was really just about as severe as the current recession - possibly even slightly more severe.

Well, let's assume that's debatable. By July 1983, the worst was over, and we were starting the upswing. That's why by 1984, Reagan could claim success and he won in a monumental landslide.

I think because the overall strength of American industry is much weaker than it was in 1980 and 1983, the current recession is much harder to deal with. Nobody seems to understand that the issue is not "where do find jobs for people to do...any jobs?" - the issue is "how do create and expand INDUSTRIES so that people can work in expanding industries that grow the size of the economy." Just putting people to work in Wal-Mart stores showing people where the plastic toys made in China are stored, and in burger flipping joints, isn't going to cut it. We need the US to have growing industries that mean something.

The differences were (a) there was no effort to cover up or minimize the causes of the 1980 recession, as there is the causes of the current dip, and (b) Reagan had solid economic policies in place that the more economically savvy could see were forming the foundation of a solid an robust recovery, even if that recovery was only beginning, while Obama has failed to deal with the issues while resorting to short term tricks that make the underlying problems worse.

Agreed.

That said, if Obama quit arguing about what cuts should be made and started supporting, say, the Ryan medicaid and medicare plan to reach his goal of $4 billion in cuts, he'd be reelected by a landslide, just like Reagan.

Obama has different agenda. I don't mean any sort of hand-wringing, mustache-twirling conspiracy. I think he was quite open about it in the years before his election. The US, we will recall, was on an "unsustainable" course and we had to "change" in order to stop us from going down that course. We needed to put the brakes on business and industry and our lifestyle was too much and too wasteful. He doesn't really have a problem with a contracting economy, and declining US industry. It's what he thinks we need long term. I don't question that his motive is good - I think he thinks it's what is best for the world. But, it is incompatible with "fixing the economy." He never wanted to "fix" it - he wanted to "change" it. Only, the bulk of the American populace who supported him heard the word "change" to just mean "make good things happen."

he growth rate in 2009 was -4.1%. The growth rate in 2010 was 2.8%. The recession is, in fact, over.

Is that 2010 growth rate adjusted for inflation? Because inflation is over 3%.

I don't think inflation was over 3% in 2010, although it is now. Real growth was positive in 2010, even after inflation, and even after adjusting for population growth as well, though I think what people are really looking for is a return to the unemployment and real income levels of 2008, which hasn't happened yet.

The real issue, though, is that, half way through 2011, inflation is running higher and growth lower than in 2010. The prognosis is getting worse, not better.

Exactly. And, there is no industry that looks like it's going to soak up five or ten million workers. Moreover, there is no burgeoning industry on the scale of the computer and internet industries of the 1980s and 1990s, not sufficient to put us back in the black.

Inflation has just begun, anyway. All the quantitative easing still hasn't fully impacted the economy. Fuel prices, while they've kind of retreated a bit in the last few weeks, will bounce back up again. And, if gas prices hit $4 regularly before the 2012 election, I think 'bama as out. That's to much of a drag on the economy. Higher fuel prices means higher everything. It's a tax on the working class. It raises transportation and commuting costs. It causes inflation in food and necessities prices. Everything goes up with fuel costs.

[Coito ergo sum]

he growth rate in 2009 was -4.1%. The growth rate in 2010 was 2.8%. The recession is, in fact, over.

Is that 2010 growth rate adjusted for inflation? Because inflation is over 3%.

http://www.guardian.co.uk/business/2011 ... -slows-gdp US economic growth slows to 1.8%
Slowing growth and inflation of 3.8%, its highest in two and a half years, are a blow to the Obama administration

[Warren Dew]

I think because the overall strength of American industry is much weaker than it was in 1980 and 1983, the current recession is much harder to deal with.

I think the opposite. If anything, there are fewer threats to today's major U.S. industries like microprocessor manufacturing than there were then to major industries back then like the automotive industry. Back in 1983, microcomputers were barely starting to become become significant and the internet wasn't even on the economic horizon yet.

Fundamentally, the U.S. economy would be sound, if it weren't hobbled by things like Obamacare. Human biotech is at about the same stage now as microprocessors were in 1983; it could take off in a free market dominated by the private sector with minimal regulations.

The current recession isn't harder to deal with; the current leaders are having a harder time dealing with it because they are less competent. Give us a Volcker and a Reagan instead of Bernanke and Obama, and we'd be fine.

[mistermack]

Fundamentally, the U.S. economy would be sound, if it weren't hobbled by things like Obamacare.

The current recession isn't harder to deal with; the current leaders are having a harder time dealing with it because they are less competent. Give us a Volcker and a Reagan instead of Bernanke and Obama, and we'd be fine.

Yeh, right. The US economy was fine, as Bush left it then? What bollocks.
The US spends more than it makes. That's all. And now that gas prices have gone up, it's spending even more, and making less.

If you look up military spending on wiki, you will see that the US, the most secure nation on earth, spends far more on the military than any other country.
You can't afford it. It's just a load of expensive toys that don't get used.
I agree with Obama. Spend that money instead on improving society, and the money circulates within the country. And stay out of expensive foreign wars.

All the economic woes of the US are down to George Bush.
.
.

[Santa_Claus]

I recall that the US govt borrows $4 out of every $10 spent. You don't need a Nobel Prize in economics to see that is not sustainable.....and it's been unsustainable for so long the chickens are now coming home to roost. It's not a left or right thing - it's an economic gravity thing.

FWIW I don't see what the US (and the West) is going through as a recession (a term, originally defined on the back of a fag packet for purely political advantage), nor is it a depression. IMO it is more fundamental than that - it's an adjustment, as the present Western Capitalist system does not (and cannot) work when other players are on the world stage.....it only worked when the West was the only game in town. My bet is that Bush (and his cabal) actually recognised this - hence the reason they looted the treasury on an industrial scale, but also stole the future wealth for a generation or 2. If there is going to be a fundamental melt down - it is onlt sensible to grab what you can.........

[Coito ergo sum]

Okay then... I will tell you that you're entirely incorrect that we're worse off now than we were two / two-and-a-half years ago. THAT is completely incorrect.

Unemployment is 9.2% - that's worse - much worse.

The US is no longer in negative growth territory - and hasn't been since spring/summer 2009.

That's one area that took a tepid bounce in the right direction, but is now declining again. Growth is dropping to about 1.8%.

The recovery is weak, to be sure, and that's a perfectly valid argument for why you're happy to heap tons of blame on Obama,

Only for the things he did. He's the one who said that unemployment would not go above 8%, not anyone else. He said his policy would keep unemployment at or below 8%. His policy failed the benchmark he set for it. I think if the other guy was in the white house, he'd be held to his own benchmarks too.

but the notion that things are still getting WORSE is completely, mathematically, indisputably untrue. The growth rate in 2009 was -4.1%. The growth rate in 2010 was 2.8%. The recession is, in fact, over.

Check the figures for 2011 so far. Check out inflation and the misery index.

Unemployment sucks, but it is not "far worse" since I'd remind you that it had been over 10% and had dropped for months.

It wasn't 10% in 2008. It went up to 10%, down to 9.1% and now up to 9.2%. Much higher than it was in February of 2009, when Obama said it would not go above 8%.

So, does the last month or two indicate a genuine trend back towards recession? I don't know.

The first quarter of 2011 does,and the second quarter of 2011 looks worse than the first.

Surely you realize there are some factors which might've impacted June's numbers other than the notion that President is leading us wrong. First and foremost by far, the price of oil spiked in spring. And there was a major disaster in Japan, and another disaster in Missouri. And, sometimes unemployment percentages just go up 0.1% in a month, even during a recovery - such as July to August 1983. One other thing worth mentioning - the miserable 18,000-jobs-created-in-June number was the result of 57,000 private sector jobs added and 39,000 government jobs lost. No doubt you'll think that second part is great news, and I wouldn't even debate it much.

All depends which jobs and why. I find on balance the number 18,000 to be negligible.

No, the economy is not going into the sewer. Maybe it's ABOUT to all come crashing down (again), or maybe it'll limp on at a pitiful growth rate for a while longer, but who knows.

Arguing over semantics. The economy sucks, and nothing the Obama administration has done has made it materially better overall.

I will, however, admit that 1983 is not a great comparison for 2011. The 1983 recovery was weak and precarious, but it had begun. Perhaps 1971 is another year worth looking at. A genuine recession (negative growth) did start that summer. That summer, Nixon's approval ratings dropped below 50%, and the trend had only pointed downwards ever since he took office. And there was a very vocal and energized movement on the far left that was just aching to face him in the election. And then...

The biggest problem is that there is no effort on the part of the government to help U.S. industry. In fact, there is an opposite effort because this government thinks that our way of life is "unsustainable" and that we ought to reign it in.

[Coito ergo sum]

Fundamentally, the U.S. economy would be sound, if it weren't hobbled by things like Obamacare.

The current recession isn't harder to deal with; the current leaders are having a harder time dealing with it because they are less competent. Give us a Volcker and a Reagan instead of Bernanke and Obama, and we'd be fine.

Yeh, right. The US economy was fine, as Bush left it then? What bollocks.

It was better in January, 2009, than it is now.

The US spends more than it makes. That's all. And now that gas prices have gone up, it's spending even more, and making less.

If you look up military spending on wiki, you will see that the US, the most secure nation on earth, spends far more on the military than any other country.
You can't afford it. It's just a load of expensive toys that don't get used.

Many countries stand to lose from a US backtracking on defense spending.

I agree with Obama. Spend that money instead on improving society, and the money circulates within the country. And stay out of expensive foreign wars.

That's not something Obama said or did. He spends more money than Bush did on defense, and got us into additional foreign wars, and continued exactly the Bush policies on Afghanistan and Iraq. AND, Obama has not once asked for any approval from Congress to get into his new military engagements.

All the economic woes of the US are down to George Bush.
.
.

A lot do, yes. Not all, of course. That would be ignoring the things that the Obama administration has done.

[Coito ergo sum]

The policies of the Obama administration have led to the weak condition of the American economy. Growth during the coming year will be subpar at best, leaving high or rising levels of unemployment and underemployment.

The drop in GDP growth to just 1.8% in the first quarter of 2011, from 3.1% in the final quarter of last year, understates the extent of the decline. Two-thirds of that 1.8% went into business inventories rather than sales to consumers or other final buyers. This means that final sales growth was at an annual rate of just 0.6% and the actual quarterly increase was just 0.15%—dangerously close to no rise at all. A sustained expansion cannot be built on inventory investment. It takes final sales to induce businesses to hire and to invest.

The picture is even gloomier if we look in more detail. Estimates of monthly GDP indicate that the only growth in the first quarter of 2011 was from February to March. After a temporary rise in March, the economy began sliding again in April, with declines in real wages, in durable-goods orders and manufacturing production, in existing home sales, and in real per-capita disposable incomes. It is not surprising that the index of leading indicators fell in April, only the second decline since it began to rise in the spring of 2009.

The data for May are beginning to arrive and are even worse than April's. They are marked by a collapse in payroll-employment gains; a higher unemployment rate; manufacturers' reports of slower orders and production; weak chain-store sales; and a sharp drop in consumer confidence.

http://online.wsj.com/article/SB1000142 ... 20692.html

The administration's most obvious failure was its misguided fiscal policies: the cash-for-clunkers subsidy for car buyers, the tax credit for first-time home buyers, and the $830 billion "stimulus" package. Cash-for-clunkers gave a temporary boost to motor-vehicle production but had no lasting impact on the economy. The home-buyer credit stimulated the demand for homes only temporarily.

As for the "stimulus" package, both its size and structure were inadequate to offset the enormous decline in aggregate demand. The fall in household wealth by the end of 2008 reduced the annual level of consumer spending by more than $500 billion. The drop in home building subtracted another $200 billion from GDP. The total GDP shortfall was therefore more than $700 billion. The Obama stimulus package that started at less than $300 billion in 2009 and reached a maximum of $400 billion in 2010 wouldn't have been big enough to fill the $700 billion annual GDP gap even if every dollar of the stimulus raised GDP by a dollar.

In fact, each dollar of extra deficit added much less than a dollar to GDP. Experience shows that the most cost-effective form of temporary fiscal stimulus is direct government spending. The most obvious way to achieve that in 2009 was to repair and replace the military equipment used in Iraq and Afghanistan that would otherwise have to be done in the future. But the Obama stimulus had nothing for the Defense Department. Instead, President Obama allowed the Democratic leadership in Congress to design a hodgepodge package of transfers to state and local governments, increased transfers to individuals, temporary tax cuts for lower-income taxpayers, etc. So we got a bigger deficit without economic growth.

A second cause of the continued economic weakness is the president's emphasis on increasing tax rates. Although Mr. Obama grudgingly agreed to continue the Bush tax cuts for 2011 and 2012, his budget this year repeated his call for higher tax rates on upper-income individuals and multinational corporations. With that higher-tax cloud hanging over them, it is not surprising that individuals and businesses do not make the entrepreneurial investments and business expansions that would cause a solid recovery.

A third problem stems from the administration's lack of an explicit plan to deal with future budget deficits and with the exploding national debt. This creates uncertainty about future tax increases and interest rates that impedes spending by households and investment by businesses. The national debt has jumped to 69% of GDP this year, from 40% in 2008. It is projected by the Congressional Budget Office to reach more than 85% by the end of the decade, and to keep rising after that. The reality is even worse since ObamaCare alone will cost more than $1 trillion in its first 10 years. The president's boast that his health legislation would not "add a dime" to the national debt was possible only by combining that increased spending with proposed new taxes and with projected cuts in Medicare spending that will never occur.

Finally, there is the administration's incoherent position on the international value of the dollar. The Treasury repeats the slogan that "a strong dollar is good for America" while watching the real value of the dollar fall by 7% over the past year, and while urging the Chinese to allow the dollar to fall more quickly relative to the yuan. The lack of a consistent dollar policy adds to the uncertainty that limits business investment and hiring.

The economy will continue to suffer until there is a coherent and favorable economic policy. That means bringing long-term deficits under control without raising marginal tax rates—by cutting government outlays and by limiting the tax expenditures that substitute for direct government spending. It means lower tax rates on businesses and individuals to spur entrepreneurship and investment. And it means reforming Social Security and Medicare to protect the living standards of future retirees while limiting the cost to future taxpayers.

All of these things are doable. But the Obama administration has not done them and shows no inclination to do them in the future.