Economy: As the White House proclaims its "recovery summer," Americans are suddenly feeling pretty bad about things. Maybe it's because their can-do spirit has come face-to-face with a "can't-do" government.
Given the many serious problems faced by the U.S., the last thing we need is a government that runs up spending to unprecedented levels and then says, sorry, we can't fix anything. But that's exactly where we find ourselves today.
The "can't dos" from our elected and appointed officials, both at the federal and state level, are piling up. Consider the following:
• "I can't suck the oil up with a straw," said President Obama when asked what he was doing about the BP spill that began April 20. Nor could he approve the building of sand berms, or the suspension of the Jones Act, which would have let foreign skimmers into U.S. waters to help with the oil cleanup.
• "You're never going to totally seal that border," said Janet Napolitano, making excuses for why Homeland Security has essentially ceded entire parts of Arizona to violent Mexican smuggling rings while still seeking "comprehensive immigration reform."
• "I think the world understands now that growth in the future around the world cannot depend as much on the United States as it did in the past," opined Treasury Secretary Tim Geithner in a defeatist interview with the BBC before the G-20 summit.
• "There's no possibility to restore 8 million jobs lost in the Great Recession" was how Vice President Joe Biden put it at a fundraiser for Democratic Sen. Russ Feingold. But wasn't that the reason for the $862 billion stimulus package, the $700 billion in bailouts and the takeover of the auto industry and Wall Street?
• "It isn't possible to debate and pass a realistic, long-term budget until we've considered the bipartisan commission's deficit-reduction plan," said House Majority Leader Steny Hoyer, explaining why Congress couldn't pass a budget as required by law.
All this suggests the least competent administration — and Congress — in modern memory. Which perhaps explains the perplexingly bad real-time data emerging from the economy — at a time when, in a normal recovery, the U.S. should be booming.
On Tuesday, the Conference Board announced that the Consumer Confidence Index "declined sharply" in June, erasing three months of gains. Its Expectations Index, which gauges how consumers view prospects, plunged 16%. All this confirmed our own IBD/TIPP Poll released earlier in the month (see chart).
We can only guess, but consumers and investors are looking six months to a year off and see massive debt growth, higher taxes (the Bush tax cuts expire this year) and tepid economic and job growth. They are, to put it mildly, greatly disappointed.
Perhaps this also explains the stock market's inability to get any traction, despite strong earning reports. On Tuesday, the S&P 500 plunged 3.1% to undercut its 2005 lows and settle at its poorest level since last October.
As for unemployment, its impact on the public psyche cannot be underestimated. We're down 7.4 million jobs since the start of the recession. With each job representing about $100,000 in GDP, that's an estimated $740 billion in lost economic output.
Worse, our own projections based on IBD/TIPP data show as much as 24% of the work force, or 36.1 million Americans, are looking for work. No wonder confidence has gone south.
We're not gloom and doomers. But it's becoming obvious that more Americans feel government incompetence is standing in the way of significant economic improvement. And from what we've seen, they're dead right.