On September 9, in front of a joint session of Congress, President Barack Obama for all intents and purposes declared the recession over:
[T]hanks to the bold and decisive action we've taken since January, I can stand here with confidence and say that we have pulled this economy back from the brink.
Less than a month later, following Friday's much worse than expected employment report from the Labor Department, our President is singing a different tune.
As was well-telegraphed by his economic advisor Robert Reich moments after the jobs numbers were released, Obama during his weekly radio address on Saturday told Americans that the employment situation in this country isn't going to improve until -- wait for it!!! -- Congress passes healthcare reform:
But yesterday’s report on September job losses was a sobering reminder that progress comes in fits and starts, and that we will need to grind out this recovery step by step. [...]
It won’t be easy. It will require us to lay a new foundation for our economy – one that gives our workers the skills and education they need to compete; that invests in renewable energy and the jobs of the future; and that makes health care affordable for families and businesses – particularly small businesses, many of which have been overwhelmed by rising health care costs.
This is something I hear about from entrepreneurs I meet – people who’ve got a good idea, and the expertise and determination to build it into a thriving business. But many can’t take that leap because they can’t afford to lose the health insurance they have at their current job.
Excuse me, Mr. President, but as a small business owner myself, I can say with great certainty that anyone that can't afford health insurance on his own doesn't have the seed money to start a new business...PERIOD!
Unfortunately, this is the kind of inflammatory rhetoric we get from someone who's never managed a business let alone owned one:
I hear about it from small business owners who want to grow their companies and hire more people, but they can’t, because they can barely afford to insure the employees they have. One small business owner wrote to me that health care costs are – and I quote – "stifling my business growth." He said that the money he wanted to use for research and development, and to expand his operations, has instead been "thrown into the pocket of healthcare insurance carriers."
Then why not lower the taxes on such a person, Mr. President, thereby GIVING him money to grow his business? And as such a person likely makes more than the evil $250,000 you've drawn a line in the sand in, why are you raising his taxes, in the midst of a recession no less?
But such logic is missing in the current debate:
Rising health care costs are undermining our businesses, exploding our deficits, and costing our nation more jobs with each passing month.
So we know that reforming our health insurance system will be a critical step in rebuilding our economy so that our entrepreneurs can pursue the American Dream again, and our small businesses can grow and expand and create new jobs again.
Add it all up, and less than four weeks after basically declaring the recession over -- and, of course, taking credit for it!!! -- the President told Americans that without healthcare reform, the job market will continue to suffer.
Is this possibly because the White House knows the economy isn't doing anywhere near as well as he suggested on September 9?
Here's what the Wall Street Journal had to say Saturday in a piece entitled "Jobs Data Cloud Recovery":
The economy, by most accounts, has begun to grow again. But Friday's Labor Department report underscored the risk that without jobs, consumers won't have income to spend and that will restrain growth and give employers little reason to resume hiring after 21 consecutive months of job losses. [...]
"The pace of the recovery is likely to slow," said Nigel Gault, chief U.S. economist for research firm IHS Global Insight. "Ultimately, if we don't get job growth, we're not going to get sustained growth in consumer spending. How could we get a really strong recovery without consumers?"
With the economy propped up by government spending on programs such as "cash for clunkers," economists worry the fragile recovery will fizzle if employers don't soon begin hiring.
Frankly, if one ignores the stock market, things are already signalling such a fizzling. Take for example the 30-year Treasury bond which on Friday traded below 4 percent for the first time since April:
As you can see, after briefly being over 5 percent in June, T-bond yields have declined by a full percentage point indicating that bond traders are not expecting much of a recovery.
Quite the contrary, last week's decline in treasury yields across all maturities indicates professionals are anticipating another leg down to the economy.
The action in the U.S. dollar also is not forecasting a strong economy:
To be sure, much of the run-up in the dollar at the end of last year was a flight to quality as money from around the world sought a safe haven during the financial collapse. However, the dollar's current level can hardly be viewed as a bullish sign on our economy.
(Be advised that there are other issues facing the dollar today, most notably that as a result of how low interest rates are here, investors from around the world are shorting the dollar to borrow money here and purchase assets abroad. As it now appears our dollar has replaced the yen as the carry trade of choice, this will have a dampening impact on our currency until our short-term interests rates rise which is unlikely without a strong recovery.)
Where does that leave a President with bold pieces of legislation pending and time running out before Congress leaves for the holidays?
Exactly where he was after Inauguration Day: destined to use fear to scare people into wanting healthcare reform.
After all, according to Rasmussen Reports, only 41 percent of Americans support the healthcare plan currently before Congress; 56 percent oppose it. At the end of June, 50 percent approved its passage versus 45 percent opposed.
What this means is that if Obama is actually concerned about having the people behind this -- rather than just letting Democrats figure out a way of ramming it through via reconciliation or attaching healthcare to something completely unrelated like taxing the bonuses of financial institution employees whose companies received TARP funds -- he's going to have to rally public support somehow.
Clearly as measured by the polls, his address to the nation roughly four weeks ago as well as his television campaign failed miserably.
As such, his only option left is to scare people into thinking that their current and future employment is in jeopardy if his healthcare proposal fails.
The question is whether or not this will work.
After all, this very scare tactic is how he got the $787 billion stimulus package passed in February along with a deficit-laden 2010 budget.
Are Americans going to tire of this wolf-crying charade or once again cower under the sheets oblivious to who the real bogeyman is?
As Ed Hart used to say, we will know in the fullness of time.