A few months back, Vice President Joe Biden famously proclaimed the arrival of "Recovery Summer." At the time, the Administration had hopes that the growing strength of the recovery during the latter part of 2009 and early 2010 would translate into an increasingly robust job market and a significant drop in the unemployment rate. The passage of last year's stimulus bill and this year's healthcare reform legislation, it was felt, had set the economy for a period of dynamic and sustained growth. These bright hopes, however, have turned out to be a mirage as the economy languishes and job growth remains stagnant. Indeed, it is increasingly apparent that, not only isn't the economy gaining speed, it is losing strength. While we haven't, thankfully, returned to the disastrous days of late 2008/early 2009, we are far from where we should be at this stage of the recovery.
There isn't a day that goes by it seems that we don't read about another unsettling economic statistic. From the disappointing second quarter growth figure to the surprisingly weak manufacturing, productivity and export numbers to declining housing sales to stubbornly sluggish job growth, there is very little to cheer about this summer. Given the consistently disappointing economic reports that have come out for June and the downward revisions for most of the previously reported May statistics, it is likely that the weak second quarter growth figure of 2.4% will itself be revised downward and all indications are that the third quarter will see little or no improvement.
Clearly, our sluggish economy will not be producing major job gains any time soon. And that has serious implications for our election prospects in November and in 2012. While some political experts in the White House and the media continue to downplay the storm we're facing, I have to agree with Press Secretary Gibbs that the loss of the House is a serious possibility. In fact, I think it's nearly certain that we're going to lose the House and I'd be surprised if we hold our losses in the Senate to less than five. The plain fact is that the voters are going to punish us for the weak economy, regardless of the fact that much of the fault lies with the Bush Administration. We're the incumbent party and that means we'll be held accountable.
So what to do? The President has some of the brightest economic minds, both within and outside the administration, advising him. We have to hope and believe that they will offer him the right advice, whether it's a better more targeted stimulus package, more effective deficit reduction, or, in appropriate circumstances, letting the market work out its imbalances without government interference. I do agree, however, with Senator Baucus and other Democrats that it would be counterproductive at this point in the recovery to let the Bush tax cuts lapse even though they benefit the rich far more than the middle class. I'm no economic expert but I do know that you don't raise taxes in a recession or, as we're experiencing, a fragile and weak recovery. Yes, President Clinton raised taxes on the wealthy and the economy thrived. But he did that with an economy that was experiencing far more robust growth than our econony today. I'm not saying, and neither is Senator Baucus, that we should make the Bush tax cuts permanent. I'm just suggesting that we postpone the day of reckoning for a year or so until the economy has regained a measure of its strength. If, as many other Democrats are urging, we let the Bush cuts expire for the wealthy at the end of this year, I fear for our prospects in 2012.
I certainly don't enjoy being so pessimistic about the economy and our election chances but we need to face things as they are, not as we wish they were.