Happy Memorial Day Weekend, Suckers
It was a little surprising finding a New York Times reporter pointing out that the economy is "wavering" and then asking, "Does Washington Notice?" right up there in the headline. Here's the meat:
Perhaps the most worrisome number was the one Macroeconomic Advisers released on Wednesday. That firm tries to estimate the growth rate of the current quarter in real time, and it now says annualized second-quarter growth is running at only 2.8 percent, up from 1.8 percent in the first quarter. Not so long ago, the firm’s economists thought second-quarter growth would be almost 4 percent.
An economy that is growing this slowly will not add jobs quickly. For the next couple of months, employment growth could slow from about 230,000 recently to something like 150,000 jobs a month, only slightly faster than normal population growth. That is certainly not fast enough to make a big dent in the still huge number of unemployed people.
Are any policy makers paying attention?
Oh, they're paying attention, all right. As Jay Cost pointed out a couple weeks ago, "nobody gets reelected with employment way down, real income way down, and 14 percent of his fellow citizens on food stamps." Nobody, he then reiterates.
Well, we'll see about that -- but the White House feels the pressure just as acutely Cost does, probably more so.
The problem for the Administration is, the President remains fully wedded to Obamanomics. We tried this stuff before, and as Glenn Reynolds noted earlier today, "the things I own are deflating, the things I buy are inflating." None of this comes as much surprise to those of us who have been paying attention these past two-plus years. As I noted back when Obama still had that new president smell:
Add up all the [scary Washington] headlines and here’s what you have: The certainty that the government will screw up the markets, and uncertainty as to what new rules the markets will work under. Everyone is too scared to move, and for good reason. So there will be no new jobs, there will be no growth.
Back then, I called it "The Grand Unification Theory of Sucking," and I've seen no reason to change my mind or the title. OK, there's been some growth, but what little we've had is slacking off even before putting a major dent in unemployment. Obama knows what to do -- push to get his agenda repealed, hike up interest rates to choke off inflation and return the dollar to sound footing, take his lumps and pray the economy rebounds in time for his reelection.
Would you like fries with your Notinthislifetimeburger? So, yes, Washington notices our difficulties. But there's something of a gap between "noticing" and "taking proper action." And my guess is that gap is just wide enough for the President's ego to slip through.
I hate having to keep writing these doom-and-gloom articles about the economy -- but what else is a concerned American to do?