It's already been a bad week for economic news, and we've got three days yet to go. The Republicans, under the anything-but-sotto voce direction of their unofficial leader Rush Limbaugh − who delights in anything that can be twisted into an example of Democratic failure − are no doubt viewing the latest stats with glee. Anything that might give them a propaganda edge for November, no matter how much pain it causes Americans caught in this meat-grinder of a recession, is going to be hyped via compliant media as a good reason to reject Democrats on election day.
The GOP's malignant amnesia regarding the economy would be hilarious were it not for the wreckage they caused. That includes a 30-year-long rhetorical crusade against deficit spending they deployed while piling up four times as much public debt as all previous administrations combined, reaching all the way back to George Washington's.
The economy is clearly not in good shape. The past four quarters have met the technical parameters of a "recovery." But down where people actually live instead of in the arena of experts and the realm of gated communities, a red alert is flashing over the outcome of the disastrous consequences of dismantling the middle-class, bath-tubbing our social and physical public infrastructure, busting unions, deregulating banks, taxing regressively, globalizing without fetters, engaging in criminal financial shenanigans, ultra-concentrating wealth, spending too much on the military, and failing to keep our eyes from becoming too large for our wallets. Tens of millions of Americans don't just think we're still in a recession because they're ignorant of economic terminology, but rather because they are still in a recession, although at least one expert not only agrees with them but goes further.
While it's sadly true that not enough Democrats are attuned to dealing with these chronic problems, the Republicans not only are unified in their determination to make these worse, they also have put up obstacles from day one of the Obama administration against cooperating to take action for ameliorating the economy's acute problems. They only intone their decades-old mantra: cut taxes. Not even Band-Aids for hoi polloi; full-time care for hoi oligoi. Daily they pronounce their debunked claptrap, making the most of bad news without ever copping to their role in producing it.
As noted above, what we've seen in the most recent numbers is not encouraging. Existing home sales showed the worst results in 14 years. Retail sales as measured by activity at chain stores weakened. Charles Evans, president of the Federal Reserve Bank of Chicago said that while a "double-dip" recession is still not likely, the chances it might occur have risen.
A Commerce Department report released this morning on durable goods orders, which have declined two months in a row, increased in July, but only by 0.3 percent, far below the 3 percent median estimate of 75 economists surveyed by Bloomberg News. A report on new home sales, which are exceedingly weak but might have made a marginal gain in July, will be released later this morning. Thursday we'll get the weekly report on initial jobless claims. The consensus is grim and may clock in close to the half-million claims filed last week. And come Friday, we'll see the first of the Commerce Department's two revisions of gross domestic product for the second quarter. Last month, the "advance" calculation of GDP came in at a mediocre 2.4 percent. With more information available now, the consensus of experts puts the revision at 1.3 percent, a dismal result, if it turns out to be true. Also on Friday, consumer sentiment from the University of Michigan/Reuters will be announced. And Ben Bernanke will be in Jackson Hole, Wyo., to give a speech on the economic outlook that is not likely to be upbeat. A week from Friday, we'll see another monthly jobs report. Predictions there are not soothing.
Under the circumstances, it might seem the administration is without a paddle against the excremental GOP deluge over who's at fault for this situation and their (groan) solution. But the Congressional Budget Office provided some help in that regard on Tuesday. According to its analysis [pdf], from April-June 2010, the Democratic stimulus package raised the inflation-adjusted GDP 1.7 percent to 4.5 percent and reduced the numbers of jobless by 1.4 million to 3.3 million. That ain't peanuts.
Legitimate objections have been raised about how the stimulus was put together and how it has been delivered. But every chance the administration and Democratic congressional candidates get between now and Nov. 2 - that is, every single day - they should hammer home that without the stimulus, which the Republican Party did everything it could to smother in its cradle, the economic pain right now would be far, far worse than it is.
It was good, therefore, to see the Democratic National Committee deliver what the Christian Science Monitor called a "prebuttal" Monday to House Minority Leader John Boehner over his pathetic economic proposals. A well-done zinger. Smackdowns on the economy, however, shouldn't always be reactive, as even prebuttals are. To effectively put the Republicans on the defensive, the administration needs more than a message of the-economy-would-be-a-whole-lot-worse if-these-guys-had-been-in-power, even though that assessment is absolutely true.
To this end, combined with a thorough thrashing of the GOP for its devil-take-the-hindmost policies, shortly after Labor Day, the administration should present basic elements of a new economic program for the next two years. It should be a program emphasizing our acute emergency, of course. But it should also lay the foundation for resolving some of the chronic problems that helped generate the emergency. That means, as so many critics have said, new approaches to trade, industrial policy, off-shoring, wage stagnation and arbitrage, and regulation. It should also look even deeper, how to deal with people's needs for economic security in a world in which automation and other productivity-enhancing changes make the old job paradigm obsolete.
No way, obviously, can reforms in all those areas be achieved in a mere two years, but a start can be made, a direction laid out. Such an economic program ought also to boast one big project, not just a flashy eye-catcher, but something practical, job-generating and an investment in the future. Replacing all our coal plants with clean-energy sources over a decade would be one possible choice with multiple benefits. But there are others.
In the immediate future, these two messages could reinvigorate voters whose enthusiasm for keeping the Party of No out of office has waned during the past few months. Together, they would provide inspiring talking points to activists in the phone-bank and door-to-door trenches for their use in persuading Americans that staying at home, or choosing Republican candidates, will worsen the economic situation. But a far-sighted economic program must ultimately be about something far more important than merely winning an election.