Economy Still Too Weak to Save Dems in Nov
Today's GDP growth numbers are pretty good news for President Obama and pretty bad news for Democrats in Congress. They're probably not enough to impact all-but-certain massive Democratic losses in this November's elections but could well signal an economic trend that will lead to Obama's reelection in 2012.
Here's why: the reported growth of 3.2 percent is good but not great. It's roughly par for the course in the post-1970s U.S. economy. In technical terms, it signals the end of the recession but, obviously, sky-high unemployment and still sagging wages leave many individuals feeling down.
For those facing elections in November, this type of growth won't help since people are still behind where they were two years ago. Much stronger growth is needed to produce the short-term economic gains that would convince Americans that the recession is really over.
On the other hand, if growth continues at a similar rate, unemployment will fall and wages will rise decently between now and 2012. This will be good for Obama and, given that he will have real legislative achievements (however problematic the stimulus, healthcare reform, and the likely financial reform are in practice) he'll be able to grab the credit even if Republicans manage to block every major Democratic proposal between now and 2012.