WASHINGTON -- If there is a single moment that symbolizes President Obama's dramatically altered re-election prospects, it was his visit to a Jeep plant in Toledo on June 3. Obama's remarks that day were familiar. America had faced the worst recession "in our lifetimes." His opponents had wanted to do "nothing." The president, in contrast, had acted. As a result, "American manufacturing and American industry is back." While there are "always going to be bumps on the road to recovery," the future is bright and "nobody can stop us." Employees chanted, "Yes we can!" wearing T-shirts that read, "President Obama: Thank you" and "Obama is changing history."
The event coincided with the release of economic data showing anemic job creation and unemployment rising above 9 percent -- adding to existing concerns about high fuel costs and collapsing housing values. Outside that plant in Ohio, the cheering for Obama had been fading for some time. It was a victory lap taken before a largely silent stadium.
Before Toledo, Obama's main task was to take credit for a slow recovery. After Toledo, his main task is to explain and confront a stalled economy. The adjustment has not been easy.
A slow recovery requires a message of patience. A stalled economy demands an impression of action. So Obama's main political problem comes down to this: He has exhausted many of the obvious options for action. A major stimulus package will not be repeated -- and some previously passed spending will expire at the end of the year. The Federal Reserve is reluctant to pump more money into the economy. The chairman of the Fed, Ben Bernanke, warns that some causes of the economic slowdown -- particularly a dismal housing market -- are likely to continue into next year. So what is Obama's economic strategy? To wait and hope? And how long will Democrats find such an approach sufficient?
The president's problem is further compounded by a consuming debate in Washington that is largely irrelevant to his political needs. A major program of spending cuts and/or tax increases is not the normal response to a flat-lining economy. Whatever the long- and medium-term benefits of serious deficit reduction, its immediate economic influence is likely to be marginal.
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