WASHINGTON -- The Obama economy is tanking, its growth rate is slowing, businesses are shedding jobs and a wave of pessimism has sent U.S. stock markets into a nose dive, threatening recovery.
Economic forecasters expect the Labor Department to report Friday that the unemployment rate in June remained unchanged -- just shy of 10 percent -- in a weakened jobs market. Home sales were falling sharply, with newly built home sales plunging in May to their lowest level in four decades. The Commerce Department says the economy grew by a weaker 2.7 percent in the second quarter, not the 3 percent previously announced. Jobless benefit claims have not budged from their January levels.
Washington critics of President Obama's disastrous economic policies are asking why isn't this the dominant story on the nightly network news shows who have bent over backwards to sugarcoat the Obama economy's deepening troubles. Sure, the BP oil explosion in the Gulf is a terrible catastrophe, made even worse by Obama's inaction. But the imbalance reflected in the media's nonstop nightly reporting on the Gulf mess versus the economy's persistent lethargy, bordering on decline, and the 15 million-plus unemployed Americans who can't find jobs (plus millions more who have dropped out of the labor market) is shocking.
"Twelve months into recovery from such a deep recession, this is a terrible performance," says economist Peter Morici of the University of Maryland. The American people get it, driving Obama's job approval score down to 46 percent in this week's Gallup Poll, nearly even with his 45 percent disapproval rating.
And a painfully few Washington economic writers get it, too. The Washington Post's Neil Irwin, in an important story the Post buried on page 9, put it this way: "The economic recovery that began a year ago increasingly appears to be on shaky footing," he reported.
T. Rowe Price vice president Alan Levenson puts it a little more bluntly. "We're not going to keep accelerating. It looks like we're either settling into cruising speed for growth, or even decelerating."
It isn't just the voters who have soured on Obama's anti-growth policies. Some of his disenchanted political allies are breaking away from him, too. Ivan G. Seidenberg, chairman of the Business Roundtable group of corporate giants, who has been Obama's closest supporter in the business community, now accuses him and Democratic leaders of creating an "increasingly hostile environment for investment and job creation."
In a luncheon speech delivered last week to the Economic Club of Washington, the chief executive of Verizon said the president and the Democrats are pushing tax hikes, policy and regulatory actions that threaten to "harm our ability ... to grow private-sector jobs in the U.S."
"In our judgment, we have reached a point where the negative effects of these policies are simply too significant to ignore," he said. "By reaching into virtually every sector of economic life, government is injecting uncertainty into the marketplace and making it harder to raise capital and create new businesses."
The Business Roundtable, a power lobby in Washington, has long worked both sides of the aisle, making compromises with Democrats that they often came to regret. Seidenberg's speech has broken that alliance.
The last straw in their relationship with Obama, say Roundtable officials, was the Democrats' financial regulation bill that would slap new taxes on multi-national corporations and insert new regulations to intrude into boardroom elections. Massachusetts Sen. Scott Brown, one of four Republicans to vote for the bill, has also come to regret that vote, but too late. He learned later that the final version of the bill emerging from a House-Senate conference committee would slap fees (i.e. taxes) on financial corporations with more than $50 billion in assets and hedge funds with more than $10 billion. What this means, Brown said in a statement, "is that these costs would be passed onto consumers in the form of higher bank, ATM and credit card fees and put a strain on lending at the worst possible time for our economy."
Democrats had bought Brown's support with an exemption that will allow insurance and mutual fund firms -- major companies in his state -- to continue trading on their own in financial markets, and for banks to invest their capital in private equity and hedge funds.
But this 2,000-page bill is fraught with many other regulations and potential rule-making that will make it a great deal harder and more costly for businesses to invest, innovate and expand. It is one more turn of the screw by the Obama administration to tighten the federal government's grip on the private sector.
That, plus an unprecedented mountain of debt, is creating fear and uncertainty in the business community and financial markets who are starved for the kind of venture capital that is a prerequisite for risk taking, expansion and new job creation.
Clearly what Obama is doing now isn't working. Why isn't this page one news?