Tuesday, June 7, 2011

Obama-conomy + Cluelessness Dooms Obama

Obama is in deep trouble, as shown by his sagging poll numbers. Even the biggest bounce he got from the killing of Osama bin Laden has faded, as we knew it would. So once again, the economy and his handling of the budget are front and center, as they will be throughout the election. But the American people don’t like what he’s doing and he has no idea what else to do. How bad are things? Dire.

Let’s start with the poll numbers (according to Reuters):

● 49% of Americans disapprove of his handling of his job. Only 47% approve. But that's the good news. . . read on.

59% of Americans disapprove of his handling of the economy. That's a career killer.

● Only 33% approve of his handling of the deficit. That’s down 6% since April.

● 89% of Americans think the economy is in bad shape. 57% say we are in recession.

● 66% say the US is on the wrong track.
These numbers are disastrous. This means that literally every conservative and independent disapproves of his handling of the economy and the deficit, and that even some Democrats are starting to disapprove as well.

Why would people be so upset? Well, for one thing, inflation is out of control. As we discussed before, inflation is officially in the 2% range, but that excludes food and gas. When we factor those in, our readers seem to think 15%-20% is more accurate. That’s worse than the worst moments under Carter.

Official unemployment remains around 9%, and real unemployment is closer to 16%. As Lawhawk pointed out the other day, no President since FDR has ever been re-elected when unemployment was above 7.2%. And no one is going to hire until Obama changes his policies wholesale.

Not surprisingly, personal consumption is falling. Consumer confidence dropped 10% last month, to an anemic 60.8. Durable goods orders, i.e. what factories are making, declined 3.6% last month (worst numbers since 1984). This means consumers and businesses expect trouble and are hunkering down. And car sales fell 3.7% to well below the level the car companies need to be profitable, and even The Washington Post is calling Obama a liar about his bailout success claims.

And, as anyone other than a Democrat would expect, home prices rose temporarily when the federal home-buying tax credit was in effect, and fell like a stone the moment the tax credit expired. Home values in big urban areas fell to their lowest level since 2002 as foreclosures depressed prices. S&P Chairman David Blitzer refers to this as a “double dip in home prices across much of the nation.” Home construction starts fell too, even though this is usually the start of the building season.

High gas prices, out of control inflation, crashing home values and massive unemployment. . . what’s not to love?

What's really interesting though, is that Obama should have had a good month. The Republicans lost in upstate New York apparently (if you believe the MSM) because of Paul Ryan's Medicare plan. Newt Gingrich attacked that plan too. The Democrats spent the month blasting the Republicans for playing chicken with the debt ceiling, a very serious charge. And a great many people complained that the Republicans were either too aggressive or too timid in budget cut demands. Yet, on the question of who would handle the economy better, congressional Republicans gained 11% points last month!

How can this be? I think the answer is simple: Obama has nothing to offer. He's added $4.6 trillion to our $14.3 trillion dollar debt -- that's 32.2% of the total debt in only three years. And he's offered nothing but token cuts to fix this. Even worse, he and his Democratic friends have opposed everything the Republicans have tried to do to fix this without ever offering their own plan. The American people aren't taking kindly to that. This is like the captain of the Titanic trying to blow holes in the lifeboats so that he can shift the blame to the guy who is trying to save everyone from the captain's mistake.

Similarly, after spending a greater amount than the GDP of all but 14 countries as a stimulus package, Obama has only lost jobs to show for it. How can you spend the Korean economy (which employs around 30 million people) and not produce any jobs? That's an incredible level of incompetence. What's worse, having tried the only thing he knew to do and failed, he now has no idea what to do next.

That is the problem for Obama. He's created an economic disaster on a scale somewhere between Jimmy Carter and the Great Depression and he has no plan to fix this except to play politics with every Republican proposal. That's why his numbers continue to fall and why they won't recover.


AndrewPrice said...

By the way, with the resignation of economic advisor Austan Goolsbee, Obama has now lost another close friend/advisor from Chicago days, and I believe he is the fourth economic advisor to abandon ship.

Unknown said...

Andrew: Guess who the only remaining member of the original Obama financial team is now--Timothy Geithner. Tax-dodging hath its benefits.

Other than what you said, how's Obama doing? LOL I'm glad the Democrats pulled throwing wheel-chair bound granny off the cliff this early in the election cycle. It will have become a parody of itself by the time the general election comes up, and it's really the only arrow in their quiver--Mediscare.

One worrying thing is that the indicators show that a huge majority think the economy is in deep trouble, but only recently have Republicans pulled ahead (slightly) in a matchup against Democrats on who can better handle fixing it. Republicans have to find a clear, simple and consistent way of explaining why they are vastly more qualified to pull the economy out of the doldrums. Being right isn't good enough if you can't explain why you're right so that non-wonks can understand the message.

Jocelyn said...

Even though the numbers are bad I'm not sure that Obama couldn't get re-elected. Which I find really scarey. People still love him, though for unknown reasons. I think there's plenty of evidence to show otherwise, but people always surprise you.

AndrewPrice said...

Lawhawk, Explanation has always been the Republican problem. They need to learn to get out there and sell their ideas. The Ryan plan is a great example. I think there is no doubt it hurt with the Medicare crowd, but when pollsters asked what people knew about it, the answer was nothing. The Republicans need to get out there and start selling everything they are doing and keep selling it until people can recite it in their sleep.

That said, I think this election will be entirely about Obama, so the Republicans do have the advantage that they don't need to beat him, he just needs to beat himself -- something he's never faced before, and I expect he will do poorly.

Yep, Timmy G is the only one left. I wonder if he's paying his taxes now? ;-)

Unknown said...

Andrew: I agree completely. The only extra concern I have is that no matter how good a President we elect, there is still the problem of needing a cooperative Congress. Obama loses, a fiscal conservative wins, but the Senate remains split and the House conservatives lose ground--recovery is DOA. In that scenario, even positive steps will be far more timid than the serious action we need to take.

AndrewPrice said...

Jocelyn, You can never say never in politics. Very strange things happen. But I would say Obama is in deep trouble because he's lost the independents. They swing elections and they've turned against him 2-1. So even though the Democrats do still love him. . . for some reason. . . that's not enough.

Unfortunately, (not to be pessimistic) he also does have some built in support no matter what because a great many people have a stake in keeping a Democrat in the White House. There are too many people who live on government benefits, handouts and subsidies and they rely on having Democrats there to turn on the spigots. So Obama and the Democrats have a large base that won't abandon them no matter how bad they are for the country. The key though is the independents, who seem to have abandoned them completely and aren't even listening about going back.

And I think part of that is the scope of these numbers. When you are talking about 16% unemployment, that means most people know one or more people who've lost a job. That personalizes the pain, and that will sway people to want change. And since Obama is offering nothing more than "keep me and it will get better," I think he's in trouble.

Tennessee Jed said...

nice job, Andrew. I was watching this poll info. at the emergency room on Fox with Martha MaCallum while getting loaded up with percocet. Managed to dislocate and fracture the little toe on my right foot. Bad news is . . . no golf for about three weeks. Good news is, more blogging time ;-) The other interesting thing is a poll showed Obama dead even with Romney. Imagine if we actually can put up somebody with a clear well presented alternative. Still on the percocet, so that's all I have to offer at the moment, and not even too sure this makes any sense.

AndrewPrice said...

Lawhawk, That's true. Fortunately, the Senate is currently set up for a major Democratic route -- unlike last time when we were defending most of the seats.

But as you note, if we don't get the senate (with a good margin) then the Democrats will block everything and we are likely to get the blame.

Of course, one answer to this is to abuse the power of the Executive Branch as Obama has done and push through conservative policies through the agencies just as he has done. That's why I like the candidates right now who (1) are willing to do that and (2) know how to do that. I wouldn't normally prefer that, but this is a critical moment in our nation's history and we need to fix the messes the Democrats created. So let's use the tools they created.

AndrewPrice said...

Jed, Sorry to hear about your toe! You shouldn't have kicked that Obama poster! ;-) Seriously, I hope you get better soon.

I saw the Romney poll. I think that's very interesting. At this point, Obama should be blowing away the challengers, none of whom are as prominent as he is. So that's another bad sign. I can wait to see if that was just a blip or the start of a trend!

And yeah, it would be nice to get someone as the front runner with a clear and strong platform.

CrispyRice said...

"That's why his numbers continue to fall and why they won't recover."

As they say, from your lips to God's ears!!

DUQ said...

These are really bad numbers and I can't help but feel that if this was a Republican administration we would be pounded every night on the news about this being the worst economy since the Great Depression and how it's all the fault of the Republicans. Instead, all we're hearing is how the numbers are "surprising."

AndrewPrice said...

Crispy, Let's hope! He could do a LOT of damage if he got a second term -- particularly with the courts. So this is a very important election and let's hope things go right! :-)

AndrewPrice said...

DUQ, That's par for the course. And you're right, if Obama was a Republican, we would be hearing about the end of the world. They would be leading every newscast with someone who lost a job and they would be talking about homelessness, starvation, suicide and despair. Instead, the MSM just talks about "gee, we thought these numbers would be better.... must be something wrong with the business world." It's frustrating. But the internet has broken the information embargo and people know the truth.

Joel Farnham said...


It amazes me that there still are polls to check if Obama is liked. At any rate, his economy won't recover in time to save his re-election. It won't recover because the people who usually are invested in the United States won't re-invest until Obama is gone. My only wish is that the experiments in Socialism will die when he no longer is president. I won't hold my breath.

Koshcat said...

I am not a political consultant, but I like to pretend I know what I am talking about. I think republicans can overall win if they keep to two basic issues: economy and government spending.

Medicare: We want to change it so not only is it there for granny but for granny's grandchildren. Under the Dems plan, it will run out of money and not exist.

Social Security: See above.

Government spending: the federal government collects over $2.5 trillion in tax revenue on a $14 trillion economy (about 17-20%). It doesn't have a revenue problem, it has a spending problem. The dems are heroin addicts-they will never stop spending. Send them to rehab.

Taxes: business taxes have gotten too high and we have lost our competitive edge in the world. Companies don't move businesses overseas to be mean but to save money. We need to lower their taxes.

Subsidies: Large, billion dollar companies don't need government subsidies to exist. If they do, they shouldn't exist. With lowering the taxes we should eliminate all subsidies.

Defense: This is where the GOP can mortally wound their opponents. Too often the GOP refuses to touch it. Instead, they should say "look, we spend far more than anyone else. We can afford to back off. We are not going to weaken defense but streamline it. We are also not going to supplement Europe's, Japan's, or Korea's social programs anymore. They can take more responsibility for their own defense. Instead we will work on partnerships with these countries using their bases along with them." Personally, I think with base closures, killing unnecessary projects, and significant pull backs from the world, we could probably cut the budget in half and at the same time improve it.

Finally, I don't think the party should get too caught up in the presidency. Yes, Obama is extremely vulnerable and with the right candidate can be beaten. But the money is in the senate and house. Win those outright and Obamas power becomes neutralized if he wins. In addition, let the presidential candidate right the coattails of the locals. Psychologically, it would look like a bottom up movement rather than top down.

Koshcat said...

Got a little wordy. Sorry. Probably too much caffeine.

AndrewPrice said...

Joel, I don't think the economy can recover in time either, even if everything suddenly went right. And things won't suddenly go right in any event because, as you note, no one is going to invest until they're sure what will happen next. That means waiting until Obama is gone.

I too wish people would finally realize that socialism never works, but there will always be socialists. And as memories fade of the insane things they do, people will be drawn back to the promises of something for nothing. That's just human nature sadly.

AndrewPrice said...

Koshkat, Wordy is right! LOL! But that's ok. Let me see what I can do about addressing your points. :-)

AndrewPrice said...

Koshkat, I agree with each point with one minor exception and one big exception.

The minor exception -- I don't think we can cut the defense budget in half, but we can make significant cuts through streamlining, privatizing, and refocusing on hotspots instead of policing the entire world.

The major exception -- in today's world, the Presidency is extremely important. For one thing, it is very easy to issue regulations that reshape our economy even without the permission of the Congress because the courts let presidents get away with that. Secondly, it is vital that we do not allow the Democrats to turn the Supreme Court from 5-4 to 4-5.

Beyond that, I agree.

The US has become hostile to business. Too many taxes, too many regulations, too many lawsuits. We should be the most business friendly place on earth. We need to slash regulation and taxes, make frivolous suits harder, and focus on improving our workforce through better education.


AndrewPrice said...

Spending -- we spend way too much. We need to trim every program across the board and then eliminate the duplicates and the ones that the government shouldn't be doing. Then we need to hit entitlements, which is where the real money is.

In that regard, we need to take the scare out the whole thing by making it clear that nothing we do will affect the people who are on it. Thus, we should be advertising heavily that "this will not change Medicare/Social Security for Seniors in any way.... it will only affect people who join 10 years in the future and it will save Medicare/SS for them." That message needs to be pounded home until seniors start repeating it in their sleep. That's the only way to prevent the Democrats from using that issue effectively to scare seniors.

On subsidies, it's time for a divorce from big business. The Republicans should announce that they intend to end all subsidies to big business, all special tax breaks that have been carved out for them, and even step up anti-trust enforcement where it's relevant. We need to be the party of small, competitive business, not big quasi-government business. I think that would go a long way to making the public respect and follow us.

Good points, thanks!

Ed said...

Andrew, That is a really good point about the stimulus the size of the Korean economy. You would think you couldn't help but create jobs if you spent that kind of money, but Obama has proven you can waste $800 billion and have nothing to show for it.

AndrewPrice said...

Ed, It does seem impossible, doesn't it? But it's not if you realize where he spent the money. A large chunk of it went to projects that had already been planned and to jobs that already existed, e.g. paying teacher salaries. None of that money would create a single job. Then you need to realize that this money had to come from somewhere. So when they took it from Company A to give it to Company B, Company B may have hired a few people, but Company A laid off people. That's why stimulus spending is a stupid idea.

If he really wanted to do anything with the money, he should have changed people's incentives to work by cutting their tax rates. But that doesn't fit his ideology.

What's sad is that it won't be long before they start arguing for another stimulus because they never learn. . . they always think something unusual happened to keep their policies from working.

Koshcat said...

On defense, half was a guess but after speaking to people who have been in the military for years, there is a tremendous amount of waste. How is it that we spend more than the next 10 countries combined? Are we really getting our money's worth? We don't need and shouldn't have as large a standing army that we do. Why do we need a bunch of minimum trained people standing around? I want to focus on training bad ass specialists. I don't see a problem with a relatively small number of americans making the military their career choice, not unlike policemen or firemen. Professionals; just don't let them unionize. We should also focus our efforts in Navy and Airforce as well because they help protect large areas and help keep trading open.

Just my 2 cents.

AndrewPrice said...

Koshkat, I agree that there is a lot that we could trim. We have too many bases, too many people who do nothing (having spent time visiting the Pentagon as a civilian employee, I can tell you that about 3/4 of that building could be fired with no interruption in service), and we have programs we don't need.

I like the idea of a smaller, professional force with longer commitments, better training and a better focus on making soldiers rather than soldiers and staff. I think we could shed a big chunk of the nuclear arsenal and some of the hardware designed for a huge ground war.

And we definitely can cut back the number of troops we have overseas. Plus, I think we should be able to end Afghanistan and Iraq, and make the Saudis and Koreans pay more for the protection we give them.

I doubt that would come to 50%, but it would be hugely significant, and it shouldn't interfere with our safety or our capabilities. And you're right on your initial point -- it would show that we're very serious about getting the government right rather than protecting sacred cows.

I think that's important -- to look at everything fresh and not consider anything off limits. It's time for a truly conservative remake of government.

Koshcat said...

Sacred cows-that was the term I was trying to think of. It was right there at the tip of my brain. See what an important service you provide Andrew!

AndrewPrice said...

Glad I could help Koshkat!

And I feel your pain! Trust me, there are many times when I'm writing an article that I find myself sitting there going "what is that dang word..... grrrrr."

In any event, there should be no sacred cows when it comes time to reform our government.

DUQ said...

Andrew, You have more patience than I do with the media. It really upsets me that they have this double standard.

AndrewPrice said...

DUQ, Patience is a virtue, especially when there's nothing you can do about it. So instead, we point it out to remind people why they should not trust the MSM and then we put out the real story whenever possible.

StanH said...

It’s time for “morning in America,” again. No equivocations, but firm conservative resolve, and Barry’s gone in a landslide, a repeat of 1980.

Now there’s one other factor that must be included in your expose’ that everything that the left is doing is intended, what have they achieved? They’ve stopped urban sprawl, consumerism, energy usage, spreading the wealth, moral equivalence foreign policy, expansion of government, affirming The Constitution as a “living” document, Global warming/cooling, etc. …I could go on. I’ve heard this crap for forty years.

As we go into 2012, take them at their word, “we are the ones we’ve waited for,” waiting for what? “energy prices would necessarily go up,” eureka! “spreading the wealth,” porkulus. “it’s time for you to do your patriotic duty,” Biden arguing for higher taxes. These bastards are transparent alright, one just needs to look.

Great read Andrew.

AndrewPrice said...

Stan, If they were the ones we were waiting for, then I have to wonder what exactly we were hoping would happen? LOL!

Notawonk said...

never underestimate the stupidity of the hand-out crowd. while i would like to think barry is not electable for a second term, his base of sloths are still in his corner.

we have to be careful, not become over confidant. we all know that on vote-out reality shows, the cocky go home, blindsided.

AndrewPrice said...

Patti, That's true and I think we should definitely caution against over-confidence. That said, however, the evidence is piling up that Obama is not going to enjoy this election cycle. We'll see though, but that's the early evidence.

rlaWTX said...

on the subject of the scary public... this was on a friend's facebook status last night (works for ATF): "Something to remember about the federal government is that the federal government does not make a profit, it only earns revenue. Private insurance companies want to make a profit. So don't think they won't milk you or your sick, elderly, widowed grandma for $1000s of dollars a year in premiums only to turn around and deny her coverage or cancel her policy because she needs to have her hip replaced."

AndrewPrice said...

The left hates private enterprise because of the word "profit," which they don't understand. I think we should impose a "profit tax" on their on their salaries to teach them what it is. Anything beyond what they need to pay for food and minimum housing that we think they need is pure profit and should be given to us.... because we know how to spend it better.

Notice also the idea that the government "earns" revenue. It takes revenue, it earns nothing. Earning implies that it provides something that we willingly pay for. I dare these people to put that to the test and let us pay only what we think is fair and designate which services get the money. I assure you the ATF will vanish over night.

rlaWTX said...

yeah, part of my response mentioned that about the "earned" revenue... she hasn't commented back, so I figure I'll be ignored...

AndrewPrice said...

rlaWTX, I'm not surprised. These people don't want to face reality, they just want to believe the things they believe.

Seriously, do they not understand that both the government and the insurer have limited funds? Only the insurer is REQUIRED by contract to treat you -- the government isn't. The government only treats you if it wants to and up to the level of funds it has available. The idea that somehow the government will treat everything for everyone and the insurer will try to not treat you is patently ridiculous. It shows this person doesn't understand the real world.

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