The Daily Beast
By Zachary Karabell
August 19, 2011
Yet another day in the yo-yo chronicles. The markets tanked once again, reverting to their extreme behavior of last week; European banks groaned under the presumed weight of unresolved debt burdens; and American economic data, ranging from the Philadelphia Fed’s manufacturing survey to jobless claims, suggested that, yes, Virginia, there may be a Santa Claus, but his bag this year is shaping up as decidedly thin.
Not surprisingly, the net effect of these pressures has been to pummel public confidence and send both Congress’ and President Obama’s approval ratings on the economy plummeting to the teens and 20s, according to the most recent Gallup poll, released yesterday. And not surprisingly, the net effect of those pressures has been to spur the White House to prepare a major new initiative to stimulate economic activity.
According to multiple reports, the White House is readying a post–Labor Day speech to unveil a broad-gauge initiative aimed at job creation and economic growth. The electoral logic is clear: Stuck with high unemployment that he now owns, Obama must be seen as doing something, and indeed, something must be done. What America needs is spending that lays the foundation for long-term prosperity; what politicians need is spending that paves the way for reelection in November 2012.