Recovery Doesn't Appear To Be "Just Around the Corner"

Posted: Apr 25, 2014 12:01 AM
Recovery Doesn't Appear To Be "Just Around the Corner"

WASHINGTON -- President Obama was eating sushi in Tokyo this week, as housing and unemployment data back home revealed continued weakness in the U.S. economy.

The number of people buying new homes plunged last month to the slowest pace in eight months, the Commerce Department said Wednesday. Sales fell by 14.5 percent -- the second straight monthly decline. Overall, new home sales have fallen 13.3 percent over the last 12 months.

This followed more bad news Tuesday: Existing home sales also dropped last month to the lowest level since July 2012. It was further proof that the lackluster Obama economy will remain in a weakened condition for the rest of this year and, possibly, the rest of this administration.

"Our core view is that the housing market has stalled and won't contribute" to overall economic growth for the rest of this year, said Ian Shepherdson, chief economist for Pantheon Macroeconomics.

Right now, economists are forecasting that the nation's economy, as measured by the gross domestic product (GDP), barely grew by between 1 and 1.5 percent annual rate.

This embarrassingly sluggish pace is nothing to write home about, and certainly not the performance record that a U.S. president can boast about on a trip through some of the largest and most successful economies in the world.

Obama is on a seven-day, four-nation goodwill Asian tour that includes Japan, South Korea, Malaysia and the Philippines. But its purpose is still unclear -- unless it is to get out of the country to avoid dealing with still more bad news on the economic front.

The president was hoping to put the finishing touches on a trade deal known as the Trans-Pacific Partnership, which has run into trouble from Democratic lawmakers and labor union bosses here at home. White House National Security Adviser Susan Rice said it's going to require a great deal more work in the "coming weeks and months."

When presidents have gone abroad, the trips that we remember were in pursuit of a larger, transforming goal in foreign policy or national security.

John F. Kennedy went to West Berlin to declare U.S. solidarity in its struggle against the Evil Empire. Ronald Reagan returned to Berlin to order Soviet President Mikhail Gorbachev to "Tear down this wall." And the wall eventually came down.

There is no similarly galvanizing goal in Obama's trip, at least not yet. "He's seeing the sights, getting some good pics and moving along -- more tourist than architect of world affairs," writes Washington Post analyst Dana Milbank.

But what is the trip's purpose? "Unclear," Milbank says. This was how Rice, well practiced in the art of diplomatic gobbledygook, described the trip in a press briefing:

"So, this is a positive trip with a positive agenda that underscores that the United States' commitment to this region is growing, and is a cornerstone of our global engagement and is going to be there for the long term," she said. Come again?

Presidents who succeed in driving their foreign policies -- especially trade expansion policies -- abroad are usually those who have succeeded on the home front. Obama has no such claim to make, most especially on the economy.

Reagan, for example, inherited a deep recession that was in many ways worse than Obama's. As a result of his tax cuts and other policies, the economy came soaring back in the third year of his presidency, scoring economic growth rates of between 7 and nearly 8 percent and creating hundreds of thousands of jobs a month.

The U.S. was respected abroad. Gorbachev was willing to agree to an arms deal, fearing Reagan's dream of an anti-ballistic missile defense system would soon become a reality. Even China began deregulating its economy.

Obama is still struggling in the sixth year of a painfully slow recovery, with forecasters estimating GDP in the first three months of this year at little more than 1 percent.

His economic record is pathetic and certainly not one that's going to impress Asia's Pacific Rim tigers, who know that Obama can't teach them anything about a growing economy. Certainly not the Chinese, where the economic growth rate is said to be slowing down to 7 percent!

Here at home, economists were especially glum this week about the declining home sales reports and other warning data.

"There really should be stronger levels of home sales given our population growth, said Lawrence Yun, chief economist for the National Association of Realtors.

But you cannot expect to see soaring home sales when job creation remains sluggish, unemployment is stuck at excessively high levels, the economy is limping along and wages remain flat.

Non-defense capital goods orders, excluding volatile aircraft data, rose just 2.2 percent in March, after falling 1.1 percent in February.

Unemployment benefit claims by jobless Americans rose by 24,000 to 329,000 last week, the second straight week this key economic figure has climbed higher.

Meantime, one of the gloomiest statistics in the Obama economy is the large number of college graduates who can't find work commensurate with their education.

The U.S. Labor Department reported this week that the unemployment rate for 2013 college grads was nearly 11 percent. The administration said the job market was improving for them, but admitted it was still at a weaker level than before the Great Recession.

In the early 1930s, editorial cartoonists drew pictures of President Herbert Hoover peering around the corner of a building, because he kept telling Americans that the recovery was "just around the corner."

Like Hoover, Obama keeps telling us his economy is getting better, when all of the latest economic data and millions of unemployed and underemployed people tell us it isn't.