President Obama heads into the third month of his second term still unable to find a cure for a sluggish economy, weak employment numbers and his own slipping job approval scores.
Second terms are usually challenging for presidents who have won re-election without having the slightest idea what they would do over the next four years. That’s what we are witnessing now with Mr. Obama, whose biggest problem is the lackluster, anemic, subpar, job-challenged economy.
The Gallup Poll this week reports that his job approval rating is an underwhelming 47 percent, with a muscular 48 percent disapproval grade, and that the nation’s economic confidence index slipped further in March to minus 16, “its lowest level since December.”
The depressing headlines of the past few days tell a sad and despair-filled tale of what the economy is like under his presidency:
“Weekly jobless claims get weaker as outlook dims” was the gloomy headline over a Reuters wire story Thursday morning on the CNBC website.
“The number of Americans filing new claims for unemployment benefits rose to its highest level in four months last week, suggesting the labor market recovery lost some steam in March,” Reuters reported.
“Hiring is weaker at private companies,” a headline in The Washington Post blared Thursday.
“Companies hired at the weakest pace in five months in March as recent strong demand for construction jobs evaporated and growth in the vast services sector slowed, signs that the economic recovery could be hitting a soft patch,” the newspaper reported.
That’s the conclusion of the ADP National Employment Report on Wednesday, which showed “that private employers added 158,000 jobs last month.” “The gain was the smallest since October,” the ADP job survey said.
A separate report Wednesday on the services industry, the economy’s largest job sector, showed that employment growth “pulled back in March.”
You do not hear any of these reports on the nightly TV network news programs because they cherry-pick reports that feed the White House line of a continuing economic recovery.
News of rising home sales and prices in the face of a shrinking number of existing homes that are for sale is reported as another huge sign of the economy’s recovery.
“CBS Evening News” anchor Scott Pelley reports every sign of a purported improving economy, but often ignores data showing signs of severe weakness in the job market, which is the larger and more important story. It’s rare to find any story in his broadcasts about unemployment, the weakening recovery or that many, if not most, Americans are still struggling to cope with incomes that have hardly budged. Ditto for ABC, NBC and CNN.
Thankfully, there are economic reporters who resist touting the White House line that everything is rosier under Mr. Obama’s policies.
“We’re approaching the four-year anniversary of the economic recovery, and it still doesn’t feel like much of one, what with the unemployment rate at 7.7 percent and wages stagnant over the past five years,” Neil Irwin, The Post’s veteran economic analyst, recently reported.
Yet, no matter how meager the jobs numbers are under Mr. Obama’s remedial reign, the news media goes hyperbolic over them. Network reporters rarely if ever point out that the puny number of jobs being created will not make a dent in the unemployment rate.
The Bureau of Labor Statistics reported that 227,000 jobs were created in February. In a workforce the size of ours, though, that number isn’t going to drive down the jobless rate to more normal levels, says business economist Peter Morici of the University of Maryland.
“The economy must add more than 360,000 jobs each month for three years to lower unemployment to 6 percent. That would require [economic] growth in the range of 4 to 5 percent and is not likely with current policies,” he said Thursday.
This robust level of growth isn’t likely to happen anytime this year or next in a slowing economy that barely grew by 0.6 percent in the fourth quarter last year. Annual growth has averaged 2.1 percent since the recession supposedly ended, and is expected to remain in that range in the first quarter.
Meantime, Mr. Obama and his advisers have been struggling to come up with some new ways to accelerate economic growth and boost job creation. Some are off-the-wall ideas, like the one the administration leaked to the news media this week that had all of the earmarks of a insecure trial balloon.
In a nutshell, the White House wants more home loans made available to people, particularly younger, first-time home buyers, who have weak credit ratings — a high-risk scheme that critics say will plunge the U.S. economy into another subprime housing disaster like the one that led to the last recession.
The administration is pressuring the Justice Department to give bank lenders assurances they will not be subject to legal actions or even financial losses “if they make loans to riskier borrowers who meet government standards but later default,” the newspaper reported Wednesday.
The loans would be fully backed by taxpayers under various housing programs, including the Federal Housing Administration which insures home mortgages against the possibility of default.
That sent up red flags among top banking and housing analysts, who said this was the same irresponsible policy that drove our country into a recession in 2008.
“If that were to come to pass, that would open the floodgates to highly excessive risk and would send us right back on the same path we were just trying to recover from,” said Ed Pinto, a housing analyst at the American Enterprise Institute and former executive at Fannie Mae.
This is how desperate the White House has become as it foresees four years of interminably high unemployment, during which the Obama economy turns into a political synonym for failure and despair.
Donald Lambro is a syndicated columnist and contributor to The Washington Times.