In June, 80,000 American workers managed to get a job, and a third of those were temp workers. On the other hand, more workers — 85,000 — quit the work force and went on Social Security disability. The economy sucks, period, and that will be the dominant theme of the presidential campaign season. The health care reform law, Bain Capital, Fast & Furious, Swiss bank accounts, all are bit players despite the headlines they garner. The candidate who somehow provides positive vibes economically will win.
In my opinion, the race will stay close through the fall and, as the election draws near, maybe even the last week of the campaign, one candidate will close the sale with enough independents to score a clear win.
If President Obama is re-elected, it’s difficult to see what steps he can take on the economy that would pass a Republican Congress. My guess is that the president would like to follow economist/columnist Paul Krugman’s advice and put through a huge stimulus spending program for 2013. I see that same advice offered by more and more liberal political talking heads on TV news. But that will never pass a GOP Congress, and the president seems to realize it. So far, all he offers to stimulate the economy are Keynesian-lite stuff that mostly benefits public unions.
Romney, too, is hamstrung by any initiatives he might propose. Repealing the health care law won’t be successful. Voters will only settle for a replacement of the health care law that retains parts the public wants and resolves the high inflationary costs. So far, the GOP has not been successful in 1) crafting a health care reform plan, and 2) convincing the public that they even realize there is a health care insurance problem in the U.S. A straight “repeal” of the entire law would be a political disaster.
Also, mandatory federal budgets cuts are due after the election. They were part of a compromise deal on planned budget cuts. Also, the debt ceiling will soon be reached again. It’s hard to imagine Congress having the courage to actually enact the mandatory cuts and pols will scream that children will die if the debt ceiling is not lifted. The only bipartisan consensus it seems, is to raise the deficit and refuse to place a limit on general spending or enact deficit cuts. Such issues as health care reform, stimulus, and likely tax reform, are reserved as dueling talking points for both sides to whip up their base and engage in Washington D.C. stalemates that accomplish nothing. Meanwhile, the economy drags.