by Randolph T. Holhut
Chief of AR Correspondents
June 7, 2012
CAN OBAMA SURVIVE A MUDDLED ECONOMIC RECOVERY?
DUMMERSTON, Vt. -- The pundits called June 1 the worst day of Barack Obama's presidency.
Why? Not only did the unemployment rate rise to 8.2 percent in May, but the U.S. Department of Labor's Bureau of Labor Statistics revised its March and April reports downward.
Only 69,000 net new jobs were created in May. By comparison, an average of 252,000 jobs were added each month between December 2011 and February 2012.
"Anemic" doesn't begin to describe these figures, and on the surface, they supply plenty of red meat for the right-wingers determined to make Obama a one-term President.
But how much of it really is Mr. Obama's fault?
The rest of the world is teetering on the brink of another recession. Europe is almost there. China and India's economies are slowing down, which in turn, effects the economies of developing nations that export to those two countries.
All this definitely has an effect on the U.S. economy.
We've been hearing for almost three years that companies won't invest in expansion and creating new jobs because American consumers are not buying enough goods to justify doing so. Yet U.S. corporations are collectively sitting on a cash stash of more that $2 trillion, and refuse to create new jobs in this country.
As a result, American consumers still don't have the money to spend. Their wages are stagnant, they can't borrow money to make up for the shortfall, and the value of the biggest single asset that most families have - their homes - remains in decline. Meanwhile, the U.S. economy has yet to recover the job losses from the 2007-08 economic collapse.
The Republicans in Congress are still offering the same stale economic nostrums - cut government spending and cut taxes on the wealthy and corporations. They have no desire to help revive the economy before November, for they would rather see millions of Americans out of work than see President Obama re-elected.
Think back to last fall, when President Obama unveiled the American Jobs Act, a $450-billion plan to stimulate job creation by investing in public infrastructure improvements, cutting taxes for companies who want to hire new workers, and preventing the layoffs of thousands of public sector workers.
Many economic analysts said the plan would boost the nation's gross domestic product and create as many as 2 million new jobs. Instead, the Republican-controlled House refused to bring it up for a vote, and Senate Republicans filibustered the bill to prevent a vote in that chamber.
With interest rates at historic lows - the 10-year yield on U.S. Treasury Bills is well under 2 percent - it makes sense for the federal government to borrow money now for long-term infrastructure needs - roads, bridges, water and sewer systems, schools and public buildings. Germany, meanwhile, is borrowing money at 0% interest by selling its bonds to investors who want to ensure the relative safety of their money.
But Republicans (and some conservative Democrats) still scream about the deficit and the need to cut government spending, even though there is abundant proof that cutting spending in a recession guarantees a longer and deeper recession.
Big corporations and billionaires are determined to defeat President Obama by any means necessary. They are ready to spend hundreds of millions of dollars - far, far more than the Democrats - to accomplish this. They outspent Democrats in Wisconsin's gubernatorial recall election earlier this week by $34 million to $4 million.
They will say anything, regardless of whether or not it's true, to convince Americans that the wealthy are taxed too much, businesses are hamstrung by needless rules and regulations, and that unions are tools of Satan.
A political party with unlimited resources and absolutely no conscience is hard to defeat. But that's what Democrats are up against, especially in the aftermath of the Democrats' loss in the Wisconsin recall elections this week (at least they did recapture the Wisconsin State Senate). Scott Walker outspent his opponent by greater than an 8-to-1 margin. Money alone doesn't guarantee a victory, but increases the odds exponentially.
No sitting president since Franklin D. Roosevelt in 1936 has ever been re-elected when the unemployment rate is above 8 percent. Even though President Obama is running against the party that created the current economic mess, and that wants to return the country to those same policies under a Romney presidency, there is no guarantee that Obama will win re-election, especially if Republicans manage to convince voters that it was Obama - and not President George W. Bush - that destroyed the economy.
AR Chief Correspondent Randolph T. Holhut has been a journalist in New England for more than 30 years. He edited "The George Seldes Reader" (Barricade Books). He can be reached at firstname.lastname@example.org.