President Clinton’s Convention Speech vs. the Misery Indicators

The state of the job market and a variety of other “misery” indicators will be in the sightlines of Republicans in light of Bill Clinton‘s unabashed and entertaining defense of the President’s economic record Wednesday evening at the Democratic Convention (and now following Friday’s very disappointing payrolls report).

One of Thursday’s headlines from Bloomberg was “Consumer Comfort Gauge Signals Severe Discontent for Fifth Week”.

The current reading was -46.5, “the fifth consecutive week the index has registered a reading lower than minus 40, a level typically associated with severe economic discontent. The personal finances gauge dropped to minus 13.5 last week from minus 12.7. The number of consumers who say their budgets were in "poor" shape, the most negative rating, climbed to 23 percent, its highest since November.”

But Clinton, by all accounts, “knocked the ball out of the park”, especially to the Dem party faithful and Republicans are a bit on their heels trying to come up with an effective response. (Reports had Mitt Romney holed up that evening in Vermont and already getting a jump on debate preparations with Sen. Rob Portman of Ohio playing the role of Obama, which we guess is better than an empty chair).

Clinton’s speech, and those of VP Biden, Michelle Obama, and the President, provided quite the convention bounce, with Gallup just reporting the highest approval rating for Obama in 15 months at 52%, and InTrade election winning odds now at 59% versus the pre-convention low 50’s. (But of course those bounces can dissipate in a matter of a few weeks, again especially if the poor jobs numbers continue).

The press has been feverishly “fact-checking” Clinton’s highly controversial “jobs scores” claims relating to job creation under Democratic and Republican administrations. (Wash. Post)

Two of Clinton’s many points:

“We could have done better, but last year the Republicans blocked the president’s job plan, costing the economy more than a million new jobs. So here’s another job score. President Obama: plus 4.5 million. Congressional Republicans: zero.”

“During this period, more than 500,000 manufacturing jobs have been created under President Obama. That’s the first time manufacturing jobs have increased since the 1990s.”

Bloomberg was reporting that in their own “fact-checking”, they could find few holes in Clinton’s claims and that the facts and statistics were “extremely well-researched”. But it sure doesn’t feel that way, with the many disappointing recent economic data points.

We are sure that one of the focal points in Romney’s debate preparations will be his record on the auto industry bail-out, which Clinton made sure to hit hard in his speech. Romney continues to maintain that private-sector financing of the auto industry bail-out would have resulted in an even stronger recovery, a position he is finding harder and harder to defend.

But the bottom line was Clinton’s unqualified defense of Obama’s economic record, hitting hard on the problems the Obama administration inherited from Bush (and conveniently touting his own record in the process, but in the winning way we have come to expect from Bill Clinton).

“If you want a ‘you’re-on-your-own, winner-take-all’ society, you should support the Republican ticket,” Clinton said. “If you want a country of shared prosperity and shared responsibility—a we’re-all-in-this-together society—you should vote for Barack Obama and Joe Biden.”

In any event, it is quite ironic that the speech was given on a day that figures released by the U.S. Dept. Of Agriculture showed new records for food stamp usage, with a record 46.7 million Americans on the program. New York alone had a 2% year over year hike. Newt Gingrich tried to make an issue of this in his run for the GOP nomination, calling Pres. Obama, “the best food-stamp president in American history.”(NY Post)

This Gingrich critique did not really get a lot of traction in the Republican primary process, with “the economy, jobs, budget deficit, health care, and education” broadly ranking as the top voter concerns, according to the latest PEW Research. Yes, “food stamps usage” represents a part of the economic picture, but: a) it seems a bit insensitive to “pick on” those who might them and b) it could be viewed by many as “somebody else’s” problem. In any event, we think it is a sad statement for America, no matter who might take the “blame” (and there is plenty to go around on both sides) and no matter one’s party affiliation.

We will give Pres. Obama credit for some comments in his speech, outside of some of the more partisan hits, saying, "America, I never said this journey would be easy, and I won't promise that now. We also believe in something called citizenship -- the idea that this country only works when we accept certain obligations to one another, and to future generations." Let’s only hope that can play out in some across the aisle “working together”, no matter who wins the Presidency.

We don’t think that Presidents “create jobs”, but certainly the policies of any Administration and an effective working relationship with Congress to help promote pro-growth actions are a major piece of the current jobs puzzle.

(Note: The Washington Post “Fact-Checker” had an interesting take on many of the facts in Pres. Clinton’s speech, giving it a One Pinocchio, which “does not represent an outright falsehood but more a selective telling of the truth. In this case, the numbers add up, but they are used to reach a conclusion that doesn’t tell you much about how either political party has managed the economy in the past — or would in the future.” We can’t shake the thought of Steve Jobs’ famous “Reality Distortion Field” and love him or hate him, Pres. Clinton ranks right up there in persuasive speech-making. Many pundits called it one of Clinton’s finest performances ever, and certainly his most influential since leaving office.)

Good Trading!
David Wismer

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