Archive for Tuesday, June 7, 2011

Slowing economy worries Obama, but he says nation should ‘not panic’

June 7, 2011


— With few options at hand and his poll numbers sagging, President Barack Obama expressed concern Tuesday about the sudden slowdown in the economy but said he is not worried about a second recession and the nation should “not panic.”

The president spoke about the new economic trouble in detail for the first time since a report late last week showed job growth had slowed sharply in May. He tried to reassure Americans worried about high unemployment and expensive gas that the nation is on a slow, if not steady, path to recovery.

“I am concerned about the fact that the recovery that we’re on is not producing jobs as quickly as I want it to happen,” Obama said at an appearance with visiting German Chancellor Angela Merkel. “We don’t yet know whether this is a one-month episode or a longer trend.”

Either way, there appears to be little Washington can do about it.

Federal Reserve chief Ben Bernanke, speaking in Atlanta on Tuesday, acknowledged the economy has lost momentum but said nothing to suggest the Fed was about to take any bold new action to further shore it up.

And with lawmakers fighting over the nation’s budget deficit and long-term debt, there is no political appetite for a second major federal stimulus bill like the one passed by Congress in 2009.

At the same time, the president is confronted with a slate of figures presenting challenges to both the economic recovery and his own re-election prospects. Just as the field of Republican challengers begins to take shape, a Washington Post-ABC News survey found that public disapproval of Obama’s handling of the economy has reached a record high, 59 percent.

The poll found that Obama and former Massachusetts Gov. Mitt Romney are tied among all Americans in a hypothetical race for president. It gave Romney a slight edge, less than the margin of error, among registered voters.

Seventeen months before the election, unemployment is 9.1 percent. When Obama took office, it was 7.8 percent. Most economists think the rate will be above 8 percent at election time next year. Since World War II, no president has been re-elected with unemployment higher than 7.2 percent.

The day brought the latest in a stream of downbeat economic news, a government report that said businesses advertised fewer job openings in April than in March. There were 4.6 unemployed people, on average, for each available job in April. In a healthy economy, the ratio is more like 2-to-1.

Even if all the open positions were filled, 10.7 million people would still be unemployed. That compares with 7.7 million who were unemployed when the recession began in December 2007. The recession ended in June 2009.

Obama’s early Republican presidential challengers have seized on the economy to try to take advantage. One of them, former Minnesota Gov. Tim Pawlenty, accused Obama on Tuesday of being satisfied with a second-rate economy “produced by his third-rate policies.”

The former Minnesota governor proposed cutting taxes on business by more than half and simplifying the tax code to just three tiers, with a top marginal rate for individuals of 25 percent. The top marginal rate now is 35 percent. Pawlenty would also eliminate taxes on capital gains.


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