Last week the focus of the presidential campaign was Congressman Paul Ryan, Mitt Romney's pick for VP, and his budget plan to cut taxes and slash spending. This week it's back to the economy and President Obama's efforts to pull it out of the deepest recession since the Great Depression.
The latest data show GDP is no longer negative but growing at just 1.5% in the second quarter. Payrolls are no longer falling but increasing at a pace too slow to push down the unemployment rate below 8 percent. And the housing market still has not fully recovered, which is crucial for a wider economic rebound, though it may have hit bottom recently.
Economist Niall Ferguson calls Obama's record on the economy "pitiful" in Newsweek's latest cover story: "Hit the Road, Barack: Why We Need a New President."
The former advisor to presidential hopeful John McCain writes:
In his inaugural address, Obama promised "not only to create new jobs, but to lay a new foundation for growth." He promised to "build the roads and bridges, the electric grids, and digital lines that feed our commerce and bind us together." He promised to "restore science to its rightful place and wield technology's wonders to raise health care's quality and lower its cost." And he promised to "transform our schools and colleges and universities to meet the demands of a new age." Unfortunately the president's scorecard on every single one of those bold pledges is pitiful.
"Obama inherited an immense disaster… but the president didn't manage those expectations appropriately," says The Daily Ticker's Henry Blodget in the accompanying interview. "He over-promised on unemployment."
When the White House was lobbying Congress to get enough votes to pass the almost $800 billion economic stimulus in early 2009, key economic advisors said passing the legislation would ensure that the jobless rate did not top 8 percent. Congress passed the stimulus but by February 2009 the unemployment rate rose to 8.2 percent. It's now 8.3 percent, well below the 10% peak reached in October 2009, but still historically high.
In other news today, the New York Times reports that, despite pledges by the White House to help as many as three to four million homeowners modify their mortgages and avoid foreclosure, only one million people have received government-sponsored modifications for their mortgages.
President Obama also "didn't press banks hard enough on mortgages," say The Daily Ticker's Aaron Task. "Obama talked tough about the banks …but he didn't really take tough enough action."
That's because the White House "was trying to protect the banks which is why they couldn't be more aggressive on housing," says Blodget, adding that at the same time Obama called Wall Street "a bunch of fat cats and completely alienated a prime constituency."
That constituency, which was previously split between Republicans and Democrats, is now heavily favoring Mitt Romney. Like many opponents of the president, his former Wall Street supporters believe he over-promised and under-delivered.
"There's no question Obama did over-promise, especially on jobs," Blodget says.
His advice: admit the administration underestimated how bad things were and reset expectations.
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