When the supercommittee fails…

What next? That’s what seemingly all the media are asking. As if political realities aren’t enough disincentive to deal…

At least one article isn’t using the word ‘When’ they fail. The Daily Beast allows the conditional ‘If’, though it’s treated as a foregone conclusion, along with the Republicans’ guilt and the Democrats’ failure to communicate.

Assuming the supercommittee doesn’t reach a deal, what political impact would it have on the 2012 race? A failure hands both sides useful political ammunition (yet another reason that failure has always been likely.) There are some risks for both sides, as well. Who “wins” the failure will be a function of which party tells a more plausible story about why it happened.

Or, as this partisan piece summarizes in this pull quote:

When the supercommittee fails, the winner will be the party that has more successfully sold its explanation of the failure.

Are we that gullible? I don’t think so. But the media bank on forming your opinions.

Time said times up before it actually was, which may be true, but does reveal a certain widespread pessimism.

As the window of opportunity to do something big has passed – the Congressional Budget Office really needed to see language for a big bill by Thursday evening in order to score it by the Monday deadline – lawmakers spent more time figuring out how to blame one another than what to do next. But, it’s now worth asking: If they can’t find $1.2 trillion in savings, what happens next?

Check the article for Plans B, C, D, E and F. They’re predicting F.

They continue to blame each other for everything, allegedly for political gain, though we aren’t impressed by political leaders who don’t take accountability seriously.

Meanwhile, there is good news, though one has to search for it.

Bloomberg reported this:

The index of U.S. leading indicators climbed more than forecast in October, signaling the world’s largest economy will keep growing in early 2012.

The Conference Board’s gauge of the outlook for the next three to six months rose 0.9 percent, the biggest jump since February, after a 0.1 percent September increase, the New York- based research group said today. The median forecast of 56 economists surveyed by Bloomberg News projected the gauge would advance 0.6 percent.

Gains in consumer spending, manufacturing and homebuilding, combined with fewer job losses, point to an economy that is weathering the turbulence in financial markets caused by the debt crisis in Europe.

Now pay attention…

“The economy looks to be getting better despite the continued drumbeat of negativity in financial markets,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, who correctly forecast the gain. “That speaks to U.S. resiliency. If we can put some of these fiscal issues behind us, even for a short period of time, we might be able to come back.”

“That speaks to U.S. resiliency.” That’s you. That’s us. Behind the terms ‘business’ and ‘finance’ and ‘commerce’ and ‘economy’ is the reality of people buying and selling and making decisions and acting. We have to be resilient. I believe we are. Now, let’s show these ‘leaders’ how to be accountable.

Obama and jobs

All the news stories seem to be about his.

It’s natural that a president seeking re-election would be the center of scrutiny when the economy is so down and unemployment so high. But the story of how tough times are impacting Americans is buried under the headlines of what impact it all has on President Obama’s political future.

Like this Reuters story.

Most polls have shown Obama defeating any of the current Republican White House contenders next year, but the continuing fiscal woes are cutting into his lead. A Reuters/Ipsos survey this month showed 60 percent of Americans think the country is on the wrong track, amid higher gasoline prices, stubbornly high joblessness and a weak housing market.

“Despite his or his handlers’ rhetoric, the electorate — if the various polls are an indication — has given plenty of feedback that it wants specifics and definitive action, not pablum, and most definitely not the ‘I feel your pain’ response to the seeming endless stream of negative economic news,” said Gerald Shuster, a political communications expert at the University of Pittsburgh.

See, this is what bothers me, even while I understand political news coverage and especially as the campaign starts to heat up. The stories are quoting political communications experts and spin doctors. And they wind up with bottom lines like these:

Mayer suggested Obama’s best strategy might be to sidestep Congress and work directly with state governors, many of them Republicans, on a stimulus plan targeting state governments, given steep budget cuts and layoffs at the local level.

“The numbers coming out of state capitals are looking pretty horrendous,” he said. “These are very significant job losses and if you could save some of those jobs, that would have some positive outcomes for Obama.”

Not to mention the individual people and their families.

Who are otherwise known as voters. This piece edges closer to considering them as more than just that…barely.

In 2008 Mr Obama represented change. This time he will have to fend off charges that he is to blame for the achingly slow recovery by arguing that it would have been worse without his actions, such as his $800 billion stimulus package and the takeover of GM and Chrysler. That may be true but it is not easy to sell a counterfactual on the stump

a counterfactual“?

(as the first President Bush learned). And there are other holes in Mr Obama’s record. What happened to his promises to do something about the environment or immigration or Guantánamo? Why should any businessman support a chief executive who has let his friends in the labour movement run amok and who let his health-care bill be written by Democrats in Congress? Above all, why has he never produced a credible plan to tackle the budget deficit, currently close to 10% of GDP?

Now they’re thinking outside the 2008 media box.

A serious Republican candidate must come up with answers to the two big problems facing America’s economy: how to get more people back to work, and how to fix the deficit.

Yes. How to get more people back to work, that’s the point.

And raising taxes means taxing individual citizens and families already hurting in their homes, if they still have them. So if it must be done, people must be convinced and brought on board a tough reform program.

An honest Republican candidate would acknowledge this and lay out the right way to do so—for instance, by eliminating distorting loopholes and thus allowing revenues to rise. He (or she) would also come up with a more systematic plan on the spending side. No Republican seems to understand the difference between good spending and bad. Investment in roads and education, for instance, ought not to be lumped in with costly and unreformed entitlements, like Social Security and Medicare. Defence should not be sacrosanct. That Mr Obama has no strategy either is not an excuse.

Thanks for the honesty, finally.

In most elections promising toughness is not a successful tactic; but this time Americans know that their country has huge problems and that their nation’s finances are the biggest problem of all. In Britain the Conservatives made the incumbent Gordon Brown seem ridiculous by spelling out the austerity that he at first barely dared mention; now another tough-talking centre-right party has won in Portugal (see article). If ever there was a time for pragmatic conservative realism, it is now.

How about that…realism as a tactic. It sure beats the alternative.

Bad news week for Obama

There was so much bad news of such an important economic scale in the first days of June 2011, it’s not looking good for a U.S. recovery anytime soon. Or the president’s approval ratings or his re-election bid.

This caught my attention on the front page of the Times on June 2:

No American president since Franklin Delano Roosevelt has won a second term in office when the unemployment rate on Election Day topped 7.2 percent.


The unemployment rate, meanwhile, edged up to 9.1 percent from 9.0 percent in April.

“The economy clearly just hit a brick wall,” said Paul Ashworth, chief United States economist at Capital Economics. “It’s almost as if it came to a complete standstill.”

Bad news all over.

“The prospect of economic growth getting up to a point and unemployment getting down to a point that is comfortable for an incumbent are declining by the month, and are now not very high at all,” said William Galston, a policy adviser in the Clinton White House and a veteran of Democratic presidential campaigns.

He added, “I hope there’s someone on the inner circle with the standing and the guts to tell the president that, if things continue the way they’re going, despite everything he’s done, he’s going to be in trouble.”

But then, someone else who saw that Times article on presidents and unemployment and re-election sees its potential.

Ironically, an inert federal government might just be the thing the economy needs to begin recovering and reducing the unemployment rate. If the current impasse over raising the debt ceiling leads to a compromise that actually cuts federal spending, it might inject a sense of confidence in the economy.

That’s an awfully big if. Nobody seems to be moving off brinkmanship mode right now.

As this piece from the Cato Institute argues, Washington’s efforts to prop up the housing industry ended up just prolonging the fall in prices that has now taken hold. That’s typical of the effect of all government efforts to stimulate the economy with tax money.

If gridlock forces government to get out of the way, Obama might win in spite of himself.

Bigger if.

Here are a couple I’ll add: If the focus were sincerely on what’s best for the future of American citizens instead of the politicians, and if government actually tried to work on the principle of subsidiarity instead of expansion, we may all win.