Is it Too Late for Obama to Turn his Fortunes Around, or Too Soon?
“We operate under the assumption that the president will be a negative for us.”
-- Aide to a Democratic senator talking to Power Play about the role the president will have on the 2012 election.
Hurricane Irene may yet chase President Obama out of his Martha’s Vineyard retreat. Even if the winds don’t force the media-conscious president’s early departure, concern of being away from the seat of government during a natural disaster may do the trick.
Certainly the storm will deny the president the start of his scheduled comeback tour: the dedication of the Martin Luther King monument in Washington. Obama, who often invokes the slain civil rights leader in his own defense, will not be able to stand at King’s feet as he tries to get back on track with an antagonized electorate.
(Former Obama Green jobs czar Van Jones said the storm should be re-named “Hurricane David Duke” for the disruption.)
Many told the president not to take the trip in the first place. With the economy crumbling (and his approval ratings going right along with it), markets in chaos and the allied effort to oust Col. Muammar Qaddafi approaching a perilous end, friends and foes alike called on the president to reschedule his family vacation. Maxine Waters and Mitt Romney agreed: Obama should have been trying to create jobs instead of golfing on the Vineyard.
Then an earthquake hit Washington and Irene started churning toward the coast, and the vacation seemed even more star-crossed.
Obama’s supporters and almost all his fellow Democrats are despairing over the president’s political depression. Liberals fear Obama may have forever lost the chance to be the modern Franklin Roosevelt and remake American society. Moderates worry that Obama will be a huge drag in the 2012 elections. Democrats of every stripe increasingly worry that Obama is headed for Jimmy Carter one-term status.
Given the grab bag of policy re-treads that the administration has leaked out in advance of the president’s long-promised plans on jobs and debt reduction, Democrats are not exactly getting psyched up for a new Obama surge. Given the cliffhanger approach to the revelation of the policies – “We have a plan, but we won’t tell you until September” – anything short of the discovery of cold fusion will probably fall flat.
But Democrats ought not despair yet.
When Obama returns to Washington, he faces three immediate battles with Congress. On Sept. 30, the resolution funding the government expires, as does the current federal gasoline tax. Before that, the members of the super committee charged with finding $1.5 trillion in reductions to the next decade of federal spending increases, will be delivering their first body blows to one and other.
This sounds bad enough to make a fellow want to stay on the beach in a hurricane, but this will actually be a political boost to Obama. Republican intransigence and what is sure to be sharper language from the president will help re-galvanize the left and show Obama to be a vital actor. As long as Obama avoids a fiscal apocalypse or a total defeat, he will be adjudged to be at least a partial winner. With the president and a supportive press having painted Republicans as terrorists, the electoral audience is primed.
Plus, Republicans will start closing in on a nominee during a triple-header of debates in September. Whether it’s Rick Perry or Mitt Romney, the Republican frontrunner will send disaffected Democrats and left-leaning independents back to the president’s corner.
Also, if the majority of economists are right and we are not approaching another full-blown recession but instead going to keep slogging through the swamps of stagnation, markets may bounce back. An economy that is weakly better is still better than one that’s getting worse.
By Nov. 1, the establishment media will be talking about Obama’s comeback. Even if his polling just floats back up to its normal range of the mid-40s, the political press will be enthusing over the new-look Obama and how those who counted him out were wrong, wrong, wrong.
With Democrats looking more united and moderates feeling more sympathetic, Obama will again be looking like a tough customer to beat.
And there’s the problem. While Obama certainly needs to shake his status as the snakebit son of Carter, he needs to experience his rise at the right time to win a second term.
There’s no chance of the kind of sustained, robust economic growth that would propel Obama into an easy, Reganesque victory. It’s too late for that. Obama will instead have to rely on a combination of attacking Republicans as radical and some sense of optimism about the economy in his bid for another four years. But it may be too early for the green shoots of hope to emerge.
If the independents who delivered the White House to Obama in 2008, the House to Republicans in 2010 and who will decide the 2012 election are disappointed again, it could doom Obama.
If the economy sputters again next summer, as it has in the current and previous summers of recovery, it could have Obama on the downside of his hope rollercoaster at just the wrong moment.
Left Looking for a GDP Number So Bad, It’s Good
“They need an outlook bad enough ... that gives them a justification to act.”
-- Former Federal Reserve Monetary Affairs Director Vincent Reinhart talking to The Hill about the today’s release of revised GDP numbers ahead of a much anticipated statement by Fed Chairman Ben Bernanke.
Liberal economic columnist Paul Krugman suggests in today’s New York Times that Federal Reserve should be seeking a “substantial” decrease in the value of the dollar and to encourage several years of inflation and uses a 2000 paper by now-Chairman Ben Bernanke to make the case.
Many on Wall Street are hoping that Bernanke will return to his roots today and announce a plan to further devalue the dollar in an effort to create a cash stimulus to the ailing economy.
But while Krugman, like others in his set, suggests that it is fear of Republican reactionaries that is keeping Bernanke from further weakening of the greenback, the greatest limit on his actions seems to be divisions inside his own board.
Anxiety over inflation, or 70s-style stagflation, continues to be real. And with Russia and China itching to knock the U.S. currency off its peg as the world’s reserve currency, any further currency manipulation could cause a cash crash. The reserve status is what allows the Fed to fiddle with the currency in ways that other countries can’t – it is the primary guarantor of the dollar’s value.
That’s why Wall Street speculators and liberal economists are hoping that today’s announcement on revised economic numbers for the second quarter of the year are lousy. Just as some hoped that Iraq would get worse faster in 2004 so that George W. Bush would lose the election and the war could be ended for good, now many are hoping that the economic data will be bad enough to give Bernanke a pretext to throw a money bomb.
If the economy looks headed for continued anemic growth/stagnation, it will be hard for Bernanke to convince his colleagues that intentional inflation is the way to go. But if a double-dip recession is unfolding, he might be able to convince them that currency devaluation is the way to go.
This same argument extends to Congress. While Obama Democrats may be more frequently accusing Republicans of intentionally sabotaging growth, there is also a considerable strain of “the worse the better” right now on the Hill. The thinking is that in order to get the economy turned around before the 2012 election season, President Obama needs help in pushing a new stimulus package. Given the debt aversion of the current House majority, that may only be possible if real economic panic sets in.
Power Play doesn’t know if Bernanke reads Krugman, but many in the Democratic caucuses in Congress certainly do.
Warren Buffett: Oracle of Obama
"This is a vote of confidence by a savvy investor. We've got some work to do. We understand that. He understands that."
-- Bank of America's chairman, Chad Holliday, taking about a $5 billion deal with Warren Buffett to stabilize the struggling bank.
Why did Warren Buffett – the son of a Goldwater-style Republican Congressman, the hero of many American capitalists and one of the richest men in the world – become an Obama acolyte at age 80?
Certainly most of Buffett’s fellow moneymen are somewhere between outraged and disenchanted with Obama. Even as conservative capitalists prepare an assault on Obama for next year and left-leaning corporatists are cutting off their campaign contributions, the Berkshire Hathaway boss is jumping in with both feet.
As Bank of America looked headed for collapse under the management team picked during the period of federal ownership, Buffett rode in Thursday and dropped $5 billion on the struggling company. More importantly, Buffett blessed the bank’s CEO. The bank’s collapse would not only have been embarrassing for the Obama administration after tens of billions of dollars of federal support but also might have touched off a panic on Wall Street.
Buffett is also a host and headline speaker at an Obama fundraiser in New York next month that will be billed as an economic forum. Again, the money will help Obama’s struggling re-election bid but it is probably more important to have the influential investor publicly vouching for Obama and his policies for economic intervention.
We don’t know what Buffett and Obama talked about in their conversation early this week, but it would stand to reason that the president would ask for his supporter’s help in calming anxious markets. If Teddy Roosevelt could ask J.P. Morgan…
With so many capitalists lining up against Obama, it helps the president to have America’s most famous investor on his side.
Just as when Obama tapped GE boss Jeff Immelt to lead a jobs panel, questions have arisen about exactly what Buffett gets out of the deal. For government contractor and green-subsidy recipient GE, the answer is fairly easy. For Buffett’s decision to become the president’s preferred capitalist, the angles are more complex.
Is it a sudden late-life interest in Democratic politics? A calculated financial angle to obtain sweet deals like the one he got from BOA? A belief that he and his company can profit more in the Obama era than if the government scales back its economic role?
And Now, A Word From Charles
“I think what is interesting about the Perry angle is that he is exposing what was always the fundamental weakness of the Romney campaign.
He doesn't excite the base and he has this insoluble problem with health care. Up until now no one pushed on that button. Perry is doing it. Romney doesn't have to come out swinging and attacking. He is not good at that. When he tried it in 2008 against McCain, it doesn't work well. But he has to find a defense on Romneycare or he will be pummeled by Perry on this incessantly. I think that is his key strategic requirement now.”
**On Today's “Power Play w/Chris Stirewalt,” Fox News Senior Business Correspondent Brenda Buttner talks new GDP numbers and Warren Buffet’s latest financial and political moves. Then Chris and the Washington Examiner’s Susan Ferrechio enter the 2012 GOP ring where Mitt Romney is fighting to stay at the top of the race. Don’t miss a minute of Power Play at 11:30 Eastern. Click http://live.foxnews.com to watch.**
Chris Stirewalt joined Fox News Channel (FNC) in July of 2010 and serves as politics editor based in Washington, D.C.