For the first time, President Obama’s overseas travel, with his photogenic family in tow, seemed jarring and discordant — out of touch with the everyday woes of constituents back home. As photographers flashed pictures of the first family abroad, analysts were poring over the depressing economic news of continuing job losses. Somehow, photos of the Obamas in resplendent, gold-bedecked palaces smacked of Marie Antoinette.
It’s not the president’s fault that the gathering of the G-8, the world’s biggest economies, was held overseas just as second-quarter economic reports revealed that unemployment in the U.S. had jumped to 9.5 percent. But, now that’s he’s back, it will be Obama’s failure if he doesn’t grab the microphone immediately to remind the nation that he has a plan to revive the economy and produce jobs.
As Republicans complain that the stimulus was never a good idea and nervous Democrats scramble for a response, it will take Obama’s soothing rhetoric to shore up jittery markets and head off a drastic drop in consumer confidence. If there is a silver lining in the recent unemployment reports, it’s this: The news has forced the economy back to the top of the agenda.
When Ben Bernanke told CBS in March that he had detected the “green shoots” of economic revival, many politicians and business leaders heard his remarks as “mission accomplished.” Congress and the president moved along to tackle health care and climate change, while Wall Street reveled in an imminent recovery.
But back on Main Street, average Americans were still losing their jobs. Those who managed to avoid layoffs were taking unpaid furloughs as employers cut back work hours and wages. And those lucky enough to hold on to full-time pay were socking it away in savings, reluctant to spend beyond the basics. That response, while understandable in uncertain times, contributed to a plunging business cycle, with businesses that sold less forced to lay off more workers.
Though liberal economists are talking about a second stimulus, the politics are unlikely to yield one. No Republicans will vote for it, and Democrats are already nervous about the deficit. Besides, Obama is probably right to remind Americans that stimulus money is just beginning to make its way into the economy; it’s not going to yield much in the way of jobs growth before late this year.
(Congress also needs a reminder that the stimulus would have been more potent if some of its members, insisting on a narrow-minded fiscal rectitude, hadn’t stripped out most of the financial aid to states and cities. State are now having to lay off employees and cut back services, prolonging the recession.)
If Bernanke’s “green shoots” won’t yield a bountiful harvest of jobs until next year, there is more the president and his economic team can do right now to stem the steady tide of foreclosures. Banks are not cooperating with the administration’s plan to help as many as 4 million struggling homeowners.
During the boom years, bankers were able to quickly upend their traditional way of doing business to peddle sub-prime loans and other exotic instruments; but they’ve been slow to adjust their mechanisms to negotiate with homeowners having a hard time paying their mortgages — even though they will be paid to do so from a taxpayer-financed pool of funds. Obama needs to let banks know he expects their full cooperation.
Most Americans know that it will take a while for the economy to recover, but they expect Obama to make economic revival his number one task. Those photo ops in glittering palaces were a bit off-message.