Top Story/Double-Dip Recession
The blast of bad economic news last week had the Sunday morning news shows focused on the rising possibility of a double-dip recession. And as TFT columnist Jim Cooper writes today, consumers who dipped into their savings in the past year are now feeling tapped out—and their limited buying power is key to the slowdown.
This Week with Christiane Amanapour
With just 54,000 jobs created in May and unemployment back up to 9.1 percent, Amanapour asked Austan Goolsbee, chief of the Council of Economic Advisors, what those numbers mean and whether the recovery is threatened.
“I said last month when we had an excellent jobs report, 100,000 above expectations, and I said again this last Friday when it came in below expectations, don't make too much of any one month's job report, because they're highly variable,” said Goolsbee. “You want to look at a little bit of a trend to get a more accurate barometer, and the overall direction is, yes, somewhat slowed from the stiff headwinds of gas prices, of the events in Japan, of some of the events in Europe. But overall, the last six months, we've added a million jobs in the private sector.”
“So what happens if this same kind of report comes out next month?,” Amanapour asked. “What does that then tell you?”
Goolsbee again cautioned against reading too much into one month’s numbers and noted that the previous report showed 100,000 more jobs than expected had been created. And, he said, the economy is in far better shape than when President Obama took office.
“Our effort now as a government should be to help [the private sector] stand up and lead the recovery. The government is not the central driver of recovery,” Goolsbee said.
In a roundtable discussion following the Goolsbee interview, economist and New York Times columnist Paul Krugman said: “Austan was right to say one month doesn't matter that much, but the fact is for about 18 months we've had an economy that's recovering in a technical sense, but it's not generating jobs faster than population growth. So we've basically been in a holding pattern, and that's likely to continue. …We're kind of in lost-decade territory. Those of us who studied Japan in the '90s look at this and say, ‘Gosh, we're looking awfully Japanese right now.’”
Krugman later said: “Businesses aren't expanding because consumer demand isn't there, and consumer demand isn't there because of a combination of high consumer debt and low incomes. So what we really need, in an ideal world…[is] a new stimulus.”
Face the Nation
Mississippi Governor Haley Barbour, who closed the door on a bid for the GOP Presidential nomination earlier this spring, slammed the Obama Administration for helping Wall Street and leaving Main Street still mired in recession.
“It’s very hard to tell the difference for small business, even though the New York banks have done great,” he said.
Besides being a canny retail politician, Barbour also once served as chairman of the Republican National Committee and is something of a power broker and spokesman for the party Establishment. So when he placed blame for rising gasoline prices squarely on the White House, his claim seemed less outlandish in the context of a broader GOP strategy to discredit Obama’s economic performance.
“Somebody told me that you actually said this week you think that the President is trying to drive up…energy prices on purpose,” moderator Bb Schieffer said.
“No question about that. This administration’s policies clearly have been to drive up the cost of energy so Americans would use less of it, “said Barbour “…When Barack Obama became president, gasoline was about a dollar eighty a gallon. And now it’s up to four dollars a gallon. …Well, we may need that in Berkeley but we don’t need that in Biloxi….”
Later, former House Speaker Nancy Pelosi, didn’t have much of an answer when Schieffer played a tape from January 2008 in which she criticized former President Bush because unemployment was at 5 percent and gasoline was at $3 a gallon.
“…If gas was three dollars and unemployment was 5 percent and [President Bush failed] the American people, don’t [Republicans] have a right to say that this President has failed the American people?” Schieffer asked.
“Well, if you want to go into the past, we can talk about the past all you want,” Pelosi said. “The public wants to know about the future. What are you going to do to create jobs, good-paying jobs in our country?”
“Well, what are you going to do?” Schieffer asked. “…The fact is the Congress has been in session since January and it’s done basically nothing.”
“You can talk to Mister Boehner about that,” said Pelosi.
“So it’s all their fault, it’s not your fault?” asked Schieffer.
“Well, no. I mean, they set the agenda. We have said everyday that they’re there, another day goes by and there isn’t a jobs agenda or a jobs bill that has come to the floor,” said Pelosi.
Fox Sunday with Chris Wallace
Reacting to the depressing economic news, former Alaska Governor Sarah Palin, who has been playing a cagey game about her Presidential ambitions, said: “Bottom line is their plan for bigger government, more federal control over our private sector, more regulations and burdensome mandates on the people and our businesses, it’s not working and we do need to shift gears and change course. And it’s very noble of President Obama to want to stay at the helm and maybe go down with this sinking ship.”