‘Obama calls Congress dysfuntional’

That wasn’t the only attention grabbing headline of the day.

Not that it isn’t. But it’s just so…disconnected. Which is his tactical goal, apparently. Disconnect himself from ‘them.’

Here’s USA Today:

“Where they won’t act, I will,” Obama told a group of homeowners in Las Vegas, Nevada, a state with the nation’s highest unemployment rate — 13.4% — and one of its highest rates of home foreclosures.

“People out here don’t have a lot of time or a lot of patience for some of that nonsense that’s been going on in Washington,” Obama said.

Really? What to say…

Some columnists have plenty to say, speaking of pathetic. I did a double-take on this Reuters headline to be sure it wasn’t a spoof.

HARP II is being announced with great fanfare today:

Across the country, nearly 11 million owe more than their property is worth.

Millions of these people have done everything right. They’ve paid all their bills and kept current on their home loans. But right now, they’re stuck with higher payments because their mortgages are underwater. They’re not eligible to refinance because the decline in home prices have made their property worth less than what they owe. And that’s a problem President Obama knows must be addressed…

Today, President Obama is taking action.

Sounds impressive, eh? It is, until you read the official FHFA press release. At which point you learn that

-If you’re a homeowner whose mortgage isn’t owned or guaranteed by Frannie, you’re out of luck.
-If your mortgage was sold to Frannie after May 31, 2009, you’re out of luck.
-If you want to get out of negative-equity hell by doing a principal reduction, you’re out of luck.
-If your bank doesn’t feel like participating, for whatever reason, you’re out of luck.

All of which is likely to result in not-very-much, as the FHFA itself concedes:

For many reasons it is very difficult to project the number of mortgages that may be refinanced under the enhancements to HARP…

First, by the end of 2013? Never mind mortgage relief now, we’ll try and get you mortgage relief in two years’ time?

Secondly, the current pace of HARP refinancings is pathetic….

And the article counts the ways.

In other words, the FHFA is projecting that the pace of HARP refinancings won’t increase at all as a result of this plan. We’ll still average out at about 30,000 per month — maybe a bit more, maybe a bit less, but you’re never going to make a dent in the mountain of 11 million underwater mortgages at that rate.

This whole exercise is so obviously pathetic that even above-the-fray central bankers are sneering at its inadequacy.

And nothing, it concludes, will get done before the election of 2012.

Which, as Dudley says, bodes very ill for the economy as a whole.

So the president goes on the road and poses as an outsider.

“Congress passed his stimulus bill, his health spending bill, his Dodd/Frank (financial regulation) bill, his state funding bill and his housing plans,” said Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell, R-Ky.

“And now,” Stewart added, “the housing market’s down, unemployment is up and the President is now acknowledging that all that didn’t work by constantly pointing out how bad the economy is.”

Perception has worked for him before.

“The country is in an unbelievably angry mood”

Well, that’s not good. But is it actually true?

Are the people really angry, or just seriously and resolutely determined? It’s sort of like when parents get upset and loudly scold their children, and the children think that as long as the parents are raising their voices and threatening, they don’t have to pay much attention. But when the parents fix their jaw and narrow their eyes to focus like a laser, and just palpably make their displeasure known, it’s serious. It’s ‘uh-oh’ time.

This juvenile scenario struck me while reading this AP piece about Obama heading to the heartland to face the folks.

Obama’s bus tour, his first as president,

(he had no need to meet people in the heartland until now?)

begins Monday

(“after a summer of discontent over a protracted debt showdown with Republicans and the downgrade in the nation’s credit rating.” As noted in the lede paragraph of this story)

and will take him to prairie communities in Minnesota and through Iowa and Illinois, with stops in the farmland and rural towns that launched his first White House bid.

Recalls the days when he was appealing to them for their vote in 2008. Which he has returned to now.

But wait…

The former Illinois senator is expected to tell audiences that he agrees with their frustrations about a dysfunctional federal government.

What? The federal goverment is headed by the Chief Executive in the White House, the President of the United States. As comedian Jon Stewart recently emphasized, the buck (‘if it’s still the buck’ he said) stops there.

What he’s saying in sound bites is this:

“What we’ve seen in Washington the last few months has been the worst kind of partisanship, the worst kind of gridlock – and that gridlock has undermined public confidence and impeded our efforts to take the steps we need for our economy,” Obama said Thursday in Michigan. “It’s made things worse instead of better.”

What he’s really saying is that the Republicans have given him and his party, which couldn’t get a budget passed when they controlled everything, a hard time by pushing back on his agenda. (Sorry for the hopelessly outdated link.)

So.

Obama will have a tough sales job on the road. Unemployment is high, foreclosures are rampant and Wall Street is jittery.

While considered official White House travel, the bus tour will put Obama in campaign-like settings with small-business owners and workers in rural areas.

Which seems like a questionable statement of ethics right there.

The story concludes with this:

Most Democrats, said MoveOn.org’s Justin Ruben, “have not been offering a clear prescription for actually getting the economy moving.”

Obama told workers in Michigan that he plans to roll out more economic plans “that will help businesses hire and put people back to work.” That’s an approach Democrats hope will set the tone for next year’s election in the Midwest and beyond.

Somebody at AP needed to wrap up the story and get it posted without scrutiny. Because that’s hollow rhetoric. And that’s what got us to this point.

Joblessness

‘Think globally, act locally’ says the bumper sticker. It certainly applies to this issue.

It’s not just one nation’s problem.

The global issue of unemployment points to a structural problem that was identified well before the onset of the world financial crisis, according to the Holy See. But its consequence is a scenario that “we must do our very best to avoid.”

Archbishop Silvano Tomasi, permanent representative of the Holy See to the U.N. offices in Geneva, made this observation last Wednesday at the 100th Session of the International Labour Conference.

The archbishop noted how “sovereign governments in most instances have not been able to find a formula for economic growth that restores jobs and includes new employment opportunities for the millions who are looking for work.”

Thus, “unemployment rates remain high and show no sign of recovery in the short term and the long term prognosis is uneven.”

This is a terrible human problem across the globe, hard to assess as worse for one demographic over another. However…

The problem of youth unemployment “has a wider and deeper impact that affects society as a whole,” the prelate explained, noting the tendency of the under- or unemployed to lose confidence and eventually drop out of the job market. The uncertainty over working opportunities and conditions creates psychological instability, he cautioned, meaning life-plans such as marriage become increasingly difficult.

“This leads to situations of human decline, to say nothing of the waste of social resources,” the prelate said, quoting “Caritas in Veritate.”

Women, too, are facing a particularly difficult employment situation, the Holy See representative noted.

Among other factors, Archbishop Tomasi pointed to a “cross cutting discrimination” reality — “the fact that labour markets remain so inflexible and find it difficult to reconcile the work model and schedule with the responsibilities for childcare and the care of other dependents that many in the workforce carry.”

“Generating and taking care of new generations is the human activity which is closest to economic investment, and the family itself is a sort of ‘relational’ investment,” he proposed.

To be clear…the family pre-exists the state. The family is pre-eminent. But it’s the foundation of society.

…as it is well known that families play a crucial role in providing social capital for human and economic development, especially in low-income countries.”

Archbishop Tomasi recalled Blessed John Paul II’s definition of work as a “hard good.”

“It is good not only in the sense that it is useful or something to enjoy; it is also good as being something worthy, that is to say, something that corresponds to man’s dignity, that expresses this dignity and increases it,” he explained.

Whatever we can do to foster a family and work environment, we’d better find it. Fast.

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.

And

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.