Discouraging news

I hate to bring bad news, but I came across the following piece commenting on our current economic situation. It's pretty depressing, but it's what could be expected from simply throwing money at our problems--

The signs of a deep and sudden slowdown in the US are becoming ever clearer as the "sugar rush" from the Obama fiscal stimulus wears off and the inventory boost fades. California, Illinois and other states are cutting spending, tightening US fiscal policy by 0.8 percent of GDP.

Thursday's plunge in the Philadelphia Fed's July index of new manufacturing orders to –4.3 suggests that the economy may have buckled abruptly, as it did in mid-2008. The Economic Cycle Research Institute's ECRI leading indicator has tumbled, reaching –8.3pc last week. This points to a sharp slowdown or recession within three months.

While US port data looked buoyant in June, the details were troubling. Outbound traffic from Long Beach fell from 139,000 containers in May to 116,000 in June. Shipments from Los Angeles fell from 161,000 to 155,000. This drop in exports is worsening the US trade deficit, eroding the dollar.

The US workforce has shrunk by a million over the past two months as discouraged jobless give up the hunt. Retail sales have fallen for the past two months. New homes sales crashed to 300,000 in May after tax credits ran out, the lowest since records began in 1963. Mortgage applications have fallen by 42pc to 13-year low since April. Paul Dales at Capital Economics said the "shadow inventory" of unsold properties has risen to 7.8m. "The double dip in housing has begun," he said.

Back to me--I can't wait until November. Let's clear Congress of both parties and start over. This bunch is looking after their own interests, not ours.

Why are the numbers coming down for Obama?

Politico had a recent article covering reasons why President Obama has such low approval ratings. I thought the piece was fair and interesting. I want to share some of the author's findings here.

For one thing, the President has lost the support of independent voters. Why? They feel he has run around, chasing down a lot of different ideas. But they care about the economy, jobs, and spending -- three areas where Obama has shown himself to be an old-fashioned liberal. Independents were hoping he would be a new kind of politician above party politics as usual. They feel betrayed.

Secondly, we are seeing divisions within the Democratic Party. Some are disappointed with the way he has handled Afghanistan while others don't like his confrontations with education unions. Many supporters say they don't really know who he is and have a hard time being enthusiastic for his positions.

Next, many insiders report there is a likability problem. The President's staff is made up of a lot of abrasive people who have managed to irritate many they come in contact with. Some believe that Obama only cares about himself and does not support those who have to take tough political stands for him.

In addition, his staff is not seen as a strong one. His speeches have fallen flat, his people do a poor job selling his ideas, and his political team often botches their jobs. For example, several of the President's choices failed to make it out of Democratic primaries.

One huge reason has to do with the economy. High unemployment rates and a sluggish economy create concern among the public. People simply don't feel that the economy has turned the corner and is heading in the right direction.

Finally, there is the BP oil leak in the Gulf. Of course, the President is not responsible for the leak, but he has looked terrible in his handling of the disaster. He reminds people that big government cannot solve all of our problems, and, in fact, often create difficulties.

These reasons are good as far as they go. But I would add one important additional point -- the President has shown the American people what an increasingly powerful government would look like. They don't like what they see with increased deficits, arrogant pronouncements, inefficiencies, indifference to realities, foreign mismanagement, and other problems. Let's hope this November the public takes notice and does something about this.