July 27 2012
Grim GDP Figures: The Economy Is Slowing
A headline on a Politico story today:
Obama Ad Revives War on Women Theme
A headline from today’s Washington Post:
U.S. Economic Growth Slowed to 1.5 in Last Three Months
What is the link between these stories?
You probably guessed correctly: the less President Obama can brag about his abysmal economic record, the more his campaign is going to focus on an alleged war against women. The Obama campaign seems to think that by pretending that Republicans want to come snatch birth control pills they can distract people from noticing that many Americans don't have jobs.
And these new economic numbers are bleak:
The GDP report said growth in consumer spending — which accounts for about 70 percent of economic activity — slowed to an annualized rate of 1.5 percent in the second quarter, down from 2.4 percent in the first three months of the year. …
A growth rate below 2 percent isn’t enough to lower the unemployment rate, which was 8.2 percent last month. And few analysts expect the economy to gain momentum in the second half of the year, as concern about debt problems in Europe and the fiscal cliff — a series of tax increases and spending cuts due to take effect in January unless policy makers find an alternative — dampen confidence.
The estimated rate of economic growth in the second quarter marked the weakest quarterly gross domestic product reading since last fall and promises to sharpen the scrutiny on the President Obama’s fiscal policies.
In an excellent post on the Commentary blog, John Podhoretz calls today’s economic numbers “quite simply, catastrophic for the president.” Podhoretz notes:
The economy is weakening as the election approaches. No one has ever won reelection in such circumstances. No one. (Harry Truman: 4.4 percent growth in Q2, 1948. Ike: 2 percent growth in 1956 Q2 after negative growth in Q1. Nixon, Q2, 1972: 5.3 percent. Clinton: 3.5 percent. GW Bush: 3.4 percent.)…
Perhaps the most interesting analogy is to 1992—a year in which the economy was actually staging a recovery from a recession in 1991. That was, you’ll recall, the year of “it’s the economy, stupid.” The annual growth rate in 1992: 3.4 percent. The incumbent president received 38 percent of the vote that year.
The reason the president’s “You didn’t build that” speech is such an albatross is that it reveals the mindset that led us to policies that shriveled the economy. In other words, the president built this. It is the logical outcome of his beliefs about how economies function.
The disastrous economic news is also the reason the campaign is stuck with trying to use phony issues such as the alleged war on women to make voters forget that the economy remains terrible.