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In a radical departure from our normal selection of writers who are committed to free minds and free markets, we go to the main stream media to see how this administration is doing in their eyes. We go to Time, Washington Post, Bloomberg News, The Hill, NY Times, The Street.com, and The Daily Beast. We’ll be back to good writers next week.
In Time, Mark Halperin criticizes the president and the Dems for playing politics with Social Security.
In a move as predictable as Lucy pulling the football away from Charlie Brown, Democrats are using Social Security scare tactics to gain ground before the November election. President Barack Obama is not only tolerating this classic old politics maneuver by his party — he is leading the charge.
…It is clear why Democrats are raising the specter of Republican efforts to alter Social Security. This tactic has worked in the past, as older voters — who typically turn out at the polls in higher percentages, especially in midterm years — tend to trust Democrats more than Republicans to protect the cherished retirement program. And given the weak economy, Obama’s mushy poll numbers and the lack of traction on the White House’s legislative achievements, it is no surprise that Democratic leaders would turn to the tried-and-true tactic. Also, with some prominent Republicans still calling for a fundamental change to the system by adding private accounts, the GOP has opened itself up to political attack.
But Obama is living in a parallel Vulcan universe if he thinks he and his strategists can spend the next two months using campaign appearances, advertising, robocalls and other voter communication to demonize Republicans on Social Security, and then turn around in January and try to make a deal on that same issue. …
Chris Cillizza contrasts the 1994 GOP takeover with the current national mood, in the WaPo.
Is it déjà vu all over again for Democrats?
Some neutral observers and senior strategists within the party have begun to believe that the national political environment is not only similar to what they saw in 1994 — when Democrats lost control of the House and Senate — but could in fact be worse by Election Day.
A quick look at the broadest atmospheric indicators designed to measure which way the national winds are blowing — the generic ballot and presidential approval — affirms the sense that the political environment looks every bit as gloomy for Democrats today as it did 16 years ago.
“President Obama‘s job [approval] number is likely to be as bad or worse than [Bill] Clinton‘s when November rolls around, the Democratic generic-ballot advantage of plus 12 to plus 15 in 2006 and 2008 is now completely gone, and conservatives are energized like 1994,” said Stu Rothenberg, an independent political analyst and editor of the Rothenberg Political Report, a well-read campaign tip sheet.
The generic ballot — would you vote for an unnamed Democrat or an unnamed Republican? — is either similar or worse for Democrats (depending on which poll you look at) than it was in 1994.
In an August 1994 Washington Post-ABC News poll, 49 percent of respondents said they would vote for the Democrat while 42 percent said they would back the Republican. Last month, 47 percent said they would support the Republican while 46 percent chose the Democrat.
The results were strikingly similar in several other national surveys….
In Bloomberg News, John Gittelsohn and Bob Willis look at the severity of the continuing housing crisis.
…“If foreclosures continue to mount and depress home prices, that could send the economy back into a recession,” said Celia Chen, an economist who tracks the industry for Moody’s Analytics Inc. “The housing market and the broader economy are closely intertwined.”
…With 14.6 million Americans out of work, homeowners are struggling to hold onto their properties. One in seven mortgages were delinquent or in foreclosure during the first quarter, the highest in records dating to 1979, according to the Washington- based Mortgage Bankers Association. Foreclosures probably will top 1 million this year, said RealtyTrac Inc., an Irvine, California-based data company. …
…Shadow inventory, or the number of homes repossessed or in default that eventually will be offered for sale, stood at 7.3 million in the first quarter, according to Laurie Goodman, an analyst in New York at mortgage-bond broker Amherst Securities Group LP. As those properties hit the market, prices will come under pressure and buyers will wait for better deals.
“The only thing that’s going to fix the housing markets right now is a work-through of what excess supply is on the markets and improvement in unemployment,” Guy Lebas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, said today in an interview on Bloomberg Television’s “In the Loop with Betty Liu.” “That process is a very, very long-term process.”
Silla Brush also reports on the continuing foreclosures, in The Hill.
Democrats are finding little success in their nearly two-year campaign to ease the nation’s housing woes. Since coming into office, President Obama has undertaken a series of policy initiatives intended to stabilize home prices, boost demand and reduce foreclosures. But a series of recent reports indicate those policies have not stopped the precipitous decline in housing, which began well before the official start of the recession in December 2007. The National Association of Realtors on Tuesday reported that existing home sales plunged 27.2 percent in July, hitting the lowest level in more than a decade. The decline exceeded even the worst estimates of analysts, many of whom predicted a sales drop of around 14 percent.
There could be more disappointing data on the way. The Mortgage Bankers Association will release a report on mortgage delinquencies Thursday that is expected to show the foreclosure crisis is still going strong. The continued problems in the housing market are bad news for Democrats, who are already struggling to convince the public their policies are moving the economy in the right direction. With the midterm elections less than three months away, voters say the state of the economy is their top concern, and most surveys show the public is souring on Obama’s handling of the issue. The Obama administration has repeatedly defended its housing polices, even while conceding that the market remains weak.
…Still, private forecasters warn it is possible home prices will start declining again, particularly because unemployment is one of the biggest causes of housing market troubles. The national unemployment rate has held steady at 9.5 percent the past two months, but there have been signs this month that the recovery of the job market is faltering. “It’s very possible we’re going to have another decline in the home price market,” said Anthony Sanders, a finance professor at George Mason University. IHS Global Insight, a private economic firm, estimates that median sales prices for existing single-family homes will continue to decline through the first quarter of 2011. Such a decline would compound ongoing difficulties in the federal efforts to reduce foreclosures. …
Also from The Hill, we learn a senior economist, who advised the Dems on the stimulus package, sees increasing possibility of a double dip recession.
An economist who advised Democrats on the $787 billion stimulus has increased his prediction of the odds of the economy entering a double-dip recession. Mark Zandi, the chief economist of Moody’s Analytics, pegged the chances of a second recession at one in three. Just a few weeks ago, he saw only a 20 percent chance of another economic slowdown. “I don’t think we’ll double-dip, but it will be a close call,” Zandi told reporters Tuesday at a breakfast sponsored by the Christian Science Monitor. He cited weak consumer confidence, nervous businesses and investors, and plummeting home sales to explain the gloomier outlook. …
In the NY Times, Gretchen Morgenson discusses the effects of the Fed’s monetary policy.
…It is not lost on these consumers that their minuscule returns are a direct result of the Federal Reserve’s attempt to shore up troubled banks’ financial standing. Sharply cutting interest rates vastly increases banks’ profits by widening the spread between what they pay to depositors and what they receive from borrowers. As such, the Fed’s zero-interest-rate policy is yet another government bailout for the very industry that drove the economy to the brink.
Todd E. Petzel, chief investment officer at Offit Capital Advisors, a private wealth management concern, characterizes the Fed’s interest rate policy as an invisible tax that costs savers and investors roughly $350 billion a year. This tax is stifling consumption, Mr. Petzel argues, and is pushing investors to reach for yields in riskier securities that they wouldn’t otherwise go near.
…“If we thought this zero-interest-rate policy was lowering people’s credit card bills it would be one thing but it doesn’t,” he said. Neither does it seem to be resulting in increased lending by the banks. “It’s a policy matter that people are not focusing on,” Mr. Petzel added. …
…Of course, the federal government is a huge beneficiary of low rates; if they were higher, our already ballooning deficits would be heftier still. …
In The Street.com, Jim Cramer doesn’t like what he’s seeing in the market.
The charts show no faith. Doesn’t matter the industry, health care, tech, banks or defense companies. They all look terrible. Just horrible. Not saying, therefore, that everything must go down. Am saying that it is really, really ugly almost everywhere you look. …
…I think that things are better than all of these charts say. But then again the S&P 500 is gripped with one of the ugliest head-and-shoulders patterns I have ever seen, one that won’t be saved by Salesforce(CRM), McDonald’s(MCD), Las Vegas Sands(LVS), Family Dollar (FDO) or F5 Networks(FFIV). A couple of food and beverage and tobacco stocks — Heinz(HNZ), Coors(TAP) and Altria(MO) won’t do the trick.
The charts look sick, sick indeed. I fear only until we get really oversold — looks like that is coming — will we see a cessation. Until then, bet on takeovers on individual stocks.
That seems to be the only tonic the charts show.
Summing up all of the above we hear from Dem pollster Doug Schoen at the Daily Beast. He has worked for Bill and Hillary Clinton, Ed Koch, and the recent FL senate campaign of Jeff Greene.
Not only has President Obama systematically put forward unpopular policies and programs that are not producing real, long-lasting results that reflect the wishes of the American people, he has not generated a sense of competence in the electorate.
Indeed, Obama’s judgment and instincts have been called into question by a series of bad decisions since he has become president. Put simply, rather than emphasizing results and outcomes, he has opted for rhetorical parsing and political gamesmanship every time. Voters have grown disillusioned with the administration’s reactive and seemingly hypocritical governing style, in which the notion of unity of command and a cohesive strategy have proved alien.
“The problem,” wrote Politico’s John Harris and Jim VandeHei this summer, “is that he and his West Wing turn out to be not especially good at politics or communications—in other words, largely ineffective at the very things on which their campaign reputation was built.”
Whenever the American people are looking for leadership from the president, Obama and his administration have systematically put forth conflicting and ambiguous messages. As Maureen Dowd recently noted in a recent column for The New York Times: “He’s with the banks, he’s against the banks. He’s leaving Afghanistan, he’s staying in Afghanistan. He strains at being a populist, but his head is in the clouds.” …