It’s my personal opinion that the economy is the reason Obama is suffering in the polls. When the economy is struggling the last thing Americans want to see is a president pushing proposals that are going to raise taxes and increase the size of government. Fortunately for Obama the business cycle is moving in his favor. This might be bad for the country in the long run because it seems clear that the president doesn’t understand the economy (see: Nixon, Carter). Eight years of Obamanomics could cripple the nation in the long run. Most observers aren’t predicting a strong recovery, but most observers thought the housing boom would last forever. Some experts believe we’re about to experience an economic boom.
The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index rose to a 47-week high of 123.9 in the week to Aug. 7 from a downwardly revised 121.7 the prior week, which was originally
reported at 121.8.Meanwhile, the index’s annualized growth rate leapt to a 26-year high of 13.4 percent from last week’s five-year high of 10.4 percent, which ECRI originally reported at 10.5 percent. It was the index’s highest yearly growth rate reading since the week to Aug. 26, 1983, when it stood at 13.9 percent.
“With WLI growth surging, the odds are rising that the early stage of this economic recovery will be stronger than any since the early 1980s,” said Lakshman Achuthan, Managing Director at ECRI.
From the beginning I thought the economic woes that started in 2008 were fed in part by the media’s obsession with Bush. Four years of non-stop negative coverage contributed to the panic last fall. I’m not saying the coverage created a recession, but it helped contribute. Perception is a integral part of the economy. The fact that 2008 was an election year didn’t help the press.
For Obama, 2012 could be a very easy reelection if the economy is booming. What’s Obama’s plan to put the United States back on a solid economic foundation? Social Security and Medicare must be addressed and Bush’s prescription drug program needs to be repealed.
Sadly, nothing I have heard or read indicates the President or his team of economic advisers really understands the fundamental causes of the current economic downturn.
For one thing, the last time that income and wealth was this concentrated in the U.S. was in 1929. Real household savings in the U.S. has been negative for the last two years, and nominal net worth for most of the 120 million or so owners of residential property has falled by one-third or more. For those who purchased properties at the height of the property market or refinanced mortgage loans, their net worth is negative.
Now, we are seeing a deepening level of mortgage defaults on conventional (i.e., non sub-prime) mortgages. And, the number defaults of mortgages on commercial properties is skyrocketing. Many banks not overly exposed to losses from residential mortgage defaults are exposed on commercial mortgages.
U.K. economist Fred Harrison (view his weekly programs at his “Renegade Economist” website) forecasts the bottom will be reached in 2010 but that we will remain at the bottom for as long as 4-5 years — if government action does not exacerbate the problems.
[...] large and the productivity of the American worker will eventually push growth. As I’ve stated before my issues with the White House are the long-term implications of the President’s economic [...]
[...] for months Americans aren’t really angry with the White House, they’re angry about the economy. The Republicans should quit banking on the economy staying in the tank forever and come up with a [...]