This represents the best 12 months in at least 5 years. Buoyed by the good news, the Dow rose by slightly more than 200 points, ending the week at 12,862.23 -- a 77.4% rise since Barack Obama took the oath of office slightly more than 3 years ago.
According to a broad array of data, the economy has been gaining strength for almost six months, offering some reason for hope that the effects of the deep financial crisis are finally starting to fade. Still, the economy will need several more years of strong job growth to return to anything resembling full health. And although many forecasters are growing more hopeful about this year, several factors -- including Europe's financial troubles and the turmoil in Iran -- could change the situation quickly. As such, in speaking about the economy this past Friday, the president essentially laid out the theme that will be at the center of his re-election campaign, reminding voters how bad an economy he inherited and hailing recent progress while being careful to add that there is still a long way to go. "The economy is growing stronger; the recovery is speeding up," the president said. But he then quickly conceded: "These numbers will go up and down in the coming months."
In other words , despite the much-needed good news, the president neither crowed nor took a rhetorical victory lap. He knows that while the path we're on is a good and solid one, it nonetheless contains many ruts, jags and potholes. Sounds pretty realistic to me; hopeful and cautiously optimistic. There is much to be both proud and hopeful about:
- After more than a decade of job losses, American manufacturing has been creating jobs since December 2009.
- The American auto industry is back. GM is again No. 1 in the world; auto manufacturers are expected to add more than 100,000 new jobs in the next 2 years.
- American oil production is at its highest level in more than 8 years.
To listen to the none-too-loyal opposition, none of the above is true; things are getting worse. For them, there is no good news. Or, to put it another way, "good news is no news." Representative Jeb Hensarling of Texas, chairman of the House Republican Conference, like many of his colleagues, essentially ignored the positive economic news. "Today is an indication of another failure of this president's policies -- 36 months in a row of 8 percent-plus unemployment," he said. Speaker John Boehner said, "The American people are still asking, 'Where are the jobs?'"
According to Romney, Gingrich, Paul and Santorum, President Obama and his administration, far from leading the economy down the road to recovery, are lost at sea clinging to a deflated life raft. According to them, the newest Labor Department figures are meaningless at best, suspect at worst. (Limbaugh and Hannaty both argued "The jobs report is corrupt." Hannaty said the report ". . . has phony numbers all around it.") Such a position places President Obama's potential challengers -- especially Gov. Romney -- in the position of ignoring statistical evidence and sounding the tocsin of angry, conspiratorial negativity . . . never a great strategy in a presidential campaign. It also leaves voters wondering whether these guys are actually pulling for the economy to remain in the tank -- at least until they can take over. If so, this is, to my way of thinking, ideological treason.
Speaking at a campaign stop in Sparks, Nevada just a few hours before that state's caucus gatherings, Romney said, "This recovery has been slower than it should have been. People have been suffering for longer than they should have had to suffer. Will it get better? I think it'll get better," he added. "But this president has not helped the process. He's hurt it." And despite making these comments in Nevada -- the state with the highest unemployment rate in the nation (slightly above 13%), Romney's only "cure for what ails us" is -- like virtually every other Republican in America -- lower taxes and less regulation. From day one, Romney has been proclaiming that as a businessman -- one who has "an intimate knowledge of the private sector" -- he "knows what it takes" to get America out of its economic doldrums.
There is ample evidence that having "an intimate knowledge of the private sector" is no guarantee of succeeding in government. Take the last American president to come from the ranks of business: Hoover Hoover. Need one say more? Or Florida's current Governor, Rick Scott. Despite having experienced enough success in the private sector to pay for a campaign out of his own pocket, he has been an utter disaster as governor; running a for-profit business is one heck of a lot different than running a state. Even Scott's fellow Republicans are turning against him. (It should be noted that despite spending $73 million of his own money, Scott only managed to defeat Democrat Alex Sink by a razor-thin margin of 48.87%-47.72%). One can also site the failed governorships of Arnold Schwarzenegger (R-CA) and John Corzine (D-NJ), two highly successful, fabulously wealthy men, which were more notable for their failures than successes. The short and sweet of it is that running a business and running a government are two very different enterprises.
It is in no way surprising that Mitt Romney, a man who made an unfathomable fortune in the private sector, should ask us to place our faith in the free market. After all, from his perspective -- and that of most of his Republican colleagues -- this is from whence all economic health and success emanates. Their argument has long been that by lowering taxes for the wealthy, by cutting -- if not eliminating -- the tax on capital gains, it will permit business owners to expand their enterprises, thus increasing employment and thus strengthening the economy. Over the past generation, this argument has gone by the name "supply-side" economics. There is, I am sorry to say, no historic evidence for its ever having succeeded. In order for "supply-side" to work, there must be a "demand-side" -- consumers -- who have the cash to buy what the wealthy are supplying.
One need not agree with "the free market is the salvation of us all" philosophy to understand how it could be quite appealing to many -- especially those who have been taught that "government is the problem, not the solution." What is terribly difficult to comprehend however, is how people can take good news and spin it into being no news at all.
-2012 Kurt F. Stone