With Unemployment Numbers Hinting at Double-Dip Recession, Obama Crafts Big Speech
-- The number of new jobs added to the U.S. economy in the month of August according to the Bureau of Labor statistics.
In the worst monthly jobs report in nearly a year, the U.S. economy failed to add any new jobs in the month of August, further raising the stakes for President Obama’s long-promised jobs plan next week.
The overall unemployment rate held steady at 9.1 percent as many of the long-term unemployed gave up looking for work and dropped from the rolls, but the trend for the economy looks increasingly negative.
Remember, the economy needs to add some 150,000 jobs per month to keep pace with population growth. To reduce the unemployment rate to the below 8 percent promised by the Obama administration in selling the 2009 stimulus package in time for Election Day, the economy would need to add more than 275,000 jobs a month. Zero jobs means losing lots of ground.
Economists had projected that the economy would add something less than 100,000 jobs, which would have allowed the president to maintain his campaign posture of saying that the economy was growing, but not fast enough.
With that argument wiped out and his own budget office forecasting on Thursday that unemployment would remain at dire levels well into next year, the president finds his long-promised jobs pitch groaning under impossible expectations.
The speech, promised for nearly a month by a defensive White House, was already freighted with expectations. The drama increased, as did the degree of difficulty, when the president was rebuffed in his bid to blow out next week’s Republican presidential debate at the Reagan Library.
Now Obama finds himself giving a speech not just preempted by the GOP but also in accordance with the schedule of the NFL. The president will address Congress at 7 p.m. Eastern (4 p.m. Pacific) on Thursday so as not to interfere with the Packers and Saints kickoff.
With limited policy options and a diminished platform, Obama faces a tough task at a moment of political crisis for his presidency.
Mortgage Lawsuits May Further Dampen Housing Market
“You have a very activist law firm that’s skilled in this dramatic flashy stuff. The idea that Fannie and Freddie are victims doesn’t stand up on its face. They were involved in creating these securities.”
-- Banking industry insider talking to the Financial Times about a soon-to-be-filed lawsuit against mortgage lenders on behalf of mortgage giants Fannie Mae and Freddie Mac.
At just the moment when Obama Democrats are looking to Fannie Mae and Freddie Mac to help stimulate the economy and juice home sales, the government agency that oversees the mortgage giants is preparing a lawsuit that could further stifle already weak home sales.
The lawsuits have been okayed by the Federal Housing Finance Agency, the conservator agency created to oversee the failed mortgage giants after their 2008 collapse and bailout, and would target the biggest lenders, like the beleaguered Bank of America. The claim is that the big banks fraudulently packaged big bundles of home loans for sale to the quasi-governmental agencies, misrepresenting the risk levels involved.
This is part of the Federal Housing Finance Agency’s mandate to seek to return Fannie and Freddie to solvency. It will also please liberals who have long complained that the Obama administration has let the banks slide for their abuses as the president sought to restore lending in his bid to revive the ailing economy.
The move comes as the president and his allies eye the agency and its boss, Edward DeMarco, in hopes that he will allow Fannie Mae and Freddie Mac to be part of a new stimulus package by refinancing home loans for those with poor credit or homes worth less than their market value.
DeMarco has expressed resistance to any plan that would move Fannie and Freddie further away from solvency. DeMarco’s desire to stick strictly to his mandate by seeking solvency through sound lending or lawsuits must make him one of the least popular fellows at the White House.
The move to seek damages from banks is not only a new threat for already shaky institutions like Bank of America, which Obama-backer Warren Buffett moved last week to save with a $5 billion cash infusion, but also provides a new reason for banks to remain stingy with loans.
The Federal Reserve has managed through extraordinary measures to keep interest rates at historic lows, but banks are still sitting on their cash. Multi-billion dollar litigation over lending practices will cause banks to not only hoard cash but give a new incentive to have lending practices that are spic and span.
When interest rates are so low, the return just isn’t worth the risk.
Romney Gets Help in Bid to Puncture Perry
-- Rep. Michele Bachmann’s share in the latest FOX News poll of Republicans’ presidential preferences.
Romney, who has gone on the offensive against “career politician” Perry, has been getting help from across the political spectrum as liberals and ultra-conservative Republicans train their fire on the new GOP frontrunner.
Romney’s campaign expressed its hope that Bachmann would “rip his eyes out” and a new ad from a pro-Bachmann Super PAC shows that she may oblige. The conservative group turns liberal attacks on Perry’s records against the governor on spending and fiscal issues. His campaign has cried foul on the facts, but the ad remains on the air in South Carolina.
Meanwhile, liberal writers and pundits continue to sound the alarm against Perry’s evangelical Christianity. In attacks similar to those leveled against Mike Huckabee, Perry is hinted to be some kind of stealth theocrat. Combine that with the “Is Rick Perry dumb?” storyline, and you have a recipe to turn off costal moderates.
Romney’s best hope for withstanding Perry’s surge is to have conservatives divided and then frighten moderates away from the new frontrunner. That would deny Perry the chance to consolidate his early gains and open up the kind of long war of attrition against the Republican right that Romney believes he can win.
The latest FOX News poll puts Perry 7 points ahead of Romney, 29 percent to 22 percent. That’s good news for Romney in that such a margin can be easily overcome before the end of the year. The bad news in the poll for Romney, though, is that Perry’s support doesn’t fluctuate much when potential candidate Sarah Palin is added to the polling mix.
With Palin and Rudy Giuliani in the race, Perry sinks to 26 percent, but Romney slides down to 18 percent, keeping Perry’s margin intact. Romney backers have been hoping for Palin to join Bachmann in pulling down Perry, but this poll shows that she wouldn’t change the trajectory of the race. After enough weeks of attacks on Perry’s record, religion and intellect, though, who knows?
Voters Still Down on Libya War
"The [Libyan rebel alliance] has said very publicly that, in the reconstruction effort, it would give preferential treatment to those who supported them. That seems quite logical and fair."
-- French Foreign Minister Alain Juppé in a French radio interview explaining why his countrymen should be the first to profit from Libyan oil in a post-Qaddafi world.
Proponents of the president’s foreign policy are enthusing over the Libyan intervention, but voters are not.
The latest FOX News poll finds that only 30 percent of registered voters support the conflict, the same as in June when American involvement in the African nation’s civil war was only in its third month. Democrats, Republicans and independents are all opposed. Only a quarter of all respondents favored any financial support for the alliance of opposition tribal leaders and Islamists who have formed an interim government.
The Libyan intervention was unpopular from the start and has remained that way even after American and allied air strikes drove strongman Muammar Qaddafi from power. When we heard this week that we were on the same side of the conflict as the mullahs in Iran, it shed light on why the complicated conflict has remained unappealing to voters. As the Europeans who Americans followed into the war squabble over who will be the first to tap Libya’s oil reserves, we have another clue. A third indication comes as Qaddafi promises a drag queen’s götterdämmerung, complete with terror attacks.
But the reason for the unpopularity of the “kinetic military operation” is that Americans are not much interested these days in bailing out anyone else, especially when it’s such a messy conflict. And the involvement was preemptive. Liberals and constitutionalists don’t like that Obama joined the war unilaterally, never even bothering to ask Congress. Hawks and Wilsonian interventionists don’t like the fact that the U.S. is, for the first time, “leading from behind.”
Fighting wars in a republic requires objectives simple enough to explain and broad enough to be popularly supported. This one has been neither.
And Now, A Word From Charles
“I think it's a huge tactical error, a delay, simply announcing in August when you have high unemployment in the Vineyard and say ‘I've got a plan, I know what I'm going to do and I'll announce it in two weeks or so after I play golf.’ It doesn't ring right. Now he has raised the stakes so high he has to do something, you know, of the stature of the level of FDR and the New Deal. He doesn't have that in his quiver.
I want to comment on the petty inside baseball stuff that my colleagues here have difficulty deigning to actually address. I'm happy to stoop to that level.”