Whistling Past the Graveyard

I guess I've become numb to all the forecasts this year (and late last year) that erroneously suggested that the end of the recession was at hand — or at least in sight.

Consequently, I am not terribly impressed today with CNNMoney.com's report that "U.S. companies are planning to hire and invest more in the near future."

That conclusion is the result of a National Association for Business Economics survey.

Hold on for a minute or two! Don't start popping those champagne corks just yet.

CNNMoney.com also says the survey revealed a conviction on the part of the economists that "another 175,000 jobs were lost in October." That seems like a key component to me — even though CNNMoney.com doesn't mention it until several paragraphs into the story. I know I'm not an economist, but if the economy is still losing jobs, how is the jobs situation getting better?

The jobs loss may be less than anticipated, but haven't we been down this road before? On at least a couple of occasions this year, jobs losses were lower than expected — and there was much rejoicing. But the economy more than made up for it the following month.

In short ... it may well be true that jobs losses won't be as severe as had been expected/feared when the next jobs report comes out next week. But, at this time of the year, that could be due to employers hiring seasonal workers in (perhaps unduly optimistic) anticipation of the holiday shopping season. So let's be patient this time and wait a couple of months before we proclaim that the economy has turned the corner.

We all want things to get better. But many members of the press seem far too eager (to me) to embrace any modest tidbit of seemingly good economic news as evidence that Barack Obama's policies are working and the recession is over.

Sometimes it seems to me that these things are balanced precariously against other opinions on an invisible scale.

The best example I can think of is an e–mail message I received from a friend. Faced with these optimistic reports, my friend told me that she has always believed that America would face another Depression in her lifetime and she thinks this is it.

So which is it — a recession from which the economy may now be emerging or a Depression that will suck up even more lives and dreams?

The Blame Game, Winners' Edition

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Shortly after the election last November, I wrote about the "blame game" that was being played in Republican circles — specifically, the finger pointing that was going on following John McCain's loss to Barack Obama.

At the time, I wrote that it was unfair to blame Sarah Palin for McCain's loss. I said — and I still believe this — that most Americans don't decide which presidential ticket to support because of the running mate. A few voters in the running mate's home state may be influenced by the selection, but that's about it. And Alaska was never in jeopardy.

Today, I've been reading an article by CNN political analyst Bill Schneider in which Schneider asks if Americans are going to start blaming Obama for bad economic news.

At this point, Schneider says, Americans have not begun blaming Obama. In fact, there's an interesting dynamic at work here. Public opinion surveys, Schneider writes, show that "[i]t's a race between optimism and despair. Right now, optimism is gaining."

Now, I think it's good that people are seeing the silver lining. But Schneider concedes that this optimism bubble is the product of "[p]robably politics as much as anything."

Nearly 30 years ago, I learned how important a president's personal popularity was when the country was trying to free itself from the grip of a severe recession.

Of course, the Reagan and Obama presidencies had different experiences in their first three months. But one key element of the American personality is its fondness for the quick–fix scenario, a fondness that was fostered by the Reagan administration. Thus far, as Schneider points out, the incessant drumbeat of bad economic news hasn't had a negative influence on the Obama presidency. But "[c]ould the process reverse and the bad economic news start to undermine Obama's political standing?" Schneider asks. "Yes, if we keep getting news, month after month, like Friday's jobless figures."

Voters crave a quick fix. They may talk about shared sacrifices and tightening belts, but it's like weight loss and smoking cessation programs. If someone tells them they can lose 20 pounds without starving themselves or doing 100 situps a day, they will go for the easy (although seemingly impossible) method. And if someone tells them they can kick the habit without having to deal with nicotine withdrawal, that person is blowing smoke but most people will still take that option.

And they want a coherent plan that appears to be logical and doesn't require very many steps. That way, they can see results — and assess the progress that is being made.

Schneider observes that, at some point, bad economic news will "take a toll" on the president's approval ratings. "And when that number goes down, the president loses political clout."

So far, he points out, that hasn't happened to Obama — yet. And he speculates that "may be why President Obama is trying to do so much so quickly."

That may prove to be the undoing of Obama's presidency.

In my lifetime, it seems that most first–term presidents struggled (and, because of the unique circumstances surrounding their tenures, I do not include Lyndon Johnson and Gerald Ford in this group) out of the gate. The ones who succeeded in regaining their footing and ultimately were rewarded with second terms were the ones who promoted limited agendas.

Obama likes to eschew traditional political maneuvering. He likes to project an image of being "one of the guys." That outsider stuff always seems to sell well with the voters, but once you win an election, you have to play the game with the career politicians in Washington.

And let's be honest about this — Republicans have always been better at playing that particular game than Democrats.

The most recent signs of dissension in the ranks came when the House and Senate approved the 2010 budget. As it was with the stimulus package, the votes were basically along party lines, but the Democrats lost some of their own people in this vote.

From the beginning of his administration, I have believed that Obama needed to narrow his scope and link everything to the stimulation of job creation and/or the preservation of home ownership. If it couldn't be linked to one of those two things, it should not have been included in the final version of the stimulus package.

Then, the budget needed to be presented in the same way. Each item needed to be clearly designated as long–term support for the programs that are intended to get the fundamentals of the economy on their feet.

Those are two things — jobs and homes — that Americans understand. Relatively few understand the complexities of economic theory, but, when the unemployment rate goes down, they understand that. And when foreclosures go down, they understand that, too.

If some things had to be put on the back burner temporarily, so be it.

Oh, and one more point about blame. It's fine for Obama and his staffers to remind people that they inherited the economy from the Bush administration, but history suggests that the voters will sour on that after awhile.

And it suggests they will start to turn sour before the first year of the administration is done.

What Americans Are Worried About

In today's economy, there are many things to be worried about. But one thing was clearly the priority in a recent CNN survey — jobs.

More than one-third of all respondents said unemployment was the most serious issue facing America today. As Paul Steinhauser observes for CNN, that is "almost three times higher than the 13% who felt the same way last April." The second-greatest concern, according to a comparatively sedate 20% of respondents, is inflation.

Small wonder. Nationally, unemployment — which stood at 8.1% when the latest figures were announced earlier this month (and which some experts predict will climb into double digits by the end of the year) — is higher than it has been in more than a quarter of a century.

In California, where the unemployment rate is already in double digits, approximately 10,000 people came to a recent job fair at Dodger Stadium.

With so many people looking for work, those who still have their jobs are, understandably, reluctant to spend their money as freely as they would in a stronger economy. Since consumer spending is the oil that lubricates the economic machine, this creates a perpetual downward spiral in which employers are more likely to cut jobs than add them, and many people wonder how we will ever reverse the trend.

All of which makes people angry when they see companies like AIG insisting on paying $165 million in bonuses and compensation after receiving more than $170 billion in bailout funds.

I can understand National Economic Council chairman Lawrence Summers' observation that AIG made these commitments before the economic meltdown. "We are a country of laws. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system."

But I also understand what Fed chairman Ben Bernanke was talking about when he said, "It's absolutely unfair that taxpayer dollars are going to prop up a company that made these terrible bets, that was operating out of the sight of regulators, but which we have no choice but to stabilize, or else risk enormous impact, not just in the financial system, but on the whole U.S. economy."

In many ways, it strikes me as being similar to Citigroup's purchase of a new corporate jet after coming to Washington seeking bailout funds. In all fairness, I have no doubt that Citigroup placed the order for the jet before the recession began. But, as I pointed out a few months ago, the prudent thing to do in the current environment would be to cancel the contract and swallow any losses. Even so, Citigroup insisted on going through with it — and has been paying the price in terms of poor public relations.

AIG, it seems to me, has made a similar decision, choosing to go ahead and reward people as promised in spite of the economic conditions.

I understand the argument against regulation. In some industries, I can see regulation being too burdensome and too costly.

But doesn't today's economy prove that regulation is necessary in other areas — in both good times and bad?

Economists: More Pain, Then Gain

Anyone who has ever embarked on a weight-loss regimen that includes vigorous exercise is familiar with the old adage — "No pain, no gain."

Apparently, the same pearl of wisdom can be applied to the current economy.

Chris Isidore of CNNMoney.com reports that a survey of economists reveals that they are "forecasting a far deeper and more painful recession ahead in the first half of the year, but a modest pickup in the second half of 2009, followed by a solid recovery in 2010."

Well, the first quarter — in which a 5% decline in economic activity is expected — is nearly two-thirds behind us now. A decline of 1.7% is expected in the second quarter. Then, according to the economists, a 1.6% increase looks likely in the third quarter.

The bad news for the unemployed is that the jobless rate is predicted to rise to 9% by the fourth quarter of the year. That isn't the double-digit figure that many people have mentioned, but it is higher than the 7.5% rate that economists predicted previously.

Remember, this isn't written in stone. It is subject to change — whether the conditions that will lead to such a change will be positive or negative remains to be seen.

Whenever I hear about a survey of economists, I am reminded of a line that has been attributed to Harry Truman: "If you lined up all the economists end to end, they'd point in different directions."

I suppose skeptics would argue that, if economists were blessed with some special insight or possessed a crystal ball that would tell them what the future held, there would have been ample warning that could have empowered the rest of us to avoid this mess.

Then again, I guess the flip side would be that many economists did, in fact, warn people what might be coming — and few, if any, listened to them.

So, it seems to me, the best that can be said is that there is light at the end of the tunnel — but it seems to resemble those optical illusions that one encountered in those old houses of mirrors that used to be found at carnivals (I don't know if you can still find those houses of mirrors on carnival midways anymore — it's been a long time since I've been to a carnival).

The optical illusion, in this case, is that the "tunnel" appears to be longer than anyone, including most economists, initially thought it was.

And the light should (logically) grow brighter as confidence returns.

But that, it seems, will take awhile — and, unfortunately for the unemployed, the light beckoning them to the tunnel's end won't get stronger until employers have regained enough confidence to hire more people.

So how severe is the recession? According to John Blake of CNN, comparisons to the Great Depression of the 1930s are erroneous. He thinks the more appropriate comparison is the Panic of 1873, when "[t]he stock market crashed. Wall Street panicked. People stashed silver and gold under mattresses while businesses shut doors across America."

There are some significant differences between 1873 and 2009. Some are not comparable, particularly the technology that is available today that wasn't even dreamed of in the 19th century. But some are — such as the quality of presidential leadership. In 1873, Republican Ulysses S. Grant had just been sworn in for his second term. He never made any decisive efforts to alleviate the economic crisis, and, in the next year's midterm elections, Democrats wound up taking control of the House for the first time in nearly 20 years (senators would not be elected by direct vote until the next century).

In 2009, Democrat Barack Obama has just taken office, and he has made decisive action on the economy his top priority.

Of course, everyone wants to know when things are going to get better. It reminds me of a movie I saw more than 15 years ago, "Leap of Faith," which was about a faith healer and a farming community that was slowly dying from a severe drought. All the residents of the town who came to the faith healer's shows wanted to know when rain would return and save their crops.

If the film is to be seen as an analogy of the American economy in 2009, the "town" is the nation and the faith healer is Obama. But can he tell us when it will rain again?

And that leads me to another survey from CNN.

Paul Steinhauser reports that a new national poll finds that nearly three-fourths of Americans are fearful about the way things are going in the country.

The same survey also suggests that more than three-fourths of respondents felt that things were going well for them personally, but CNN's polling director had an explanation for that. "Americans always believe things are better in their own lives than in the rest of the country," he said. "But they are realists as well — they recognize that bad times somewhere else in the U.S. may eventually come to affect them."

If confidence is the name of the game, Americans still show confidence in their new president, slightly more than a month since he took office. CNN reports that two out of three Americans approve of the job he is doing.

And that is a crucial piece of the overall puzzle. If the president inspires confidence, that can make a big difference — even if it is psychological.

What Obama says in his speech to Congress tomorrow night — and how well it is received by the lawmakers — can have an enormous psychological impact on those who listen to what he has to say.

Ranking the Presidents

Tomorrow is Presidents' Day, so I guess it should come as no surprise that C-SPAN has surveyed a bunch of historians to come up with a ranking of the presidents, from best to worst.

This kind of list is always interesting — and debate-provoking. In 2001, former White House counsel John Dean asserted that such a list "is nothing but high-grade hokum, mixed with a lot of bunkum."

My primary argument would be that C-SPAN's ranking includes every president, and, while it is tempting to pass judgment on George W. Bush, his administration hasn't been over for a full month yet (even though there are certainly those who would argue that Bush simply stopped governing — or attempting to govern — well before his presidency ended on Jan. 20, 2009).

I would establish certain rules that would exclude recent presidents from being ranked — on the grounds that history really hasn't had a chance to fully assess those presidents' contributions.

How much time should be given? Well, I guess history is dynamic in that sense, and interpretations of individual presidents may be subject to change long after their administrations end. Harry Truman and Richard Nixon, for example, were both regarded more favorably about 20 years after they left office than they were when their presidencies ended. C-SPAN's rankings indicate that Truman is still as well regarded as he was in the survey that was taken nearly 10 years ago, while Nixon has slipped a couple of spots.

Anyway, I would say that any presidency that ended in the last 20 years should not be considered. That would remove both of the Bushes and Bill Clinton from consideration, although the elder Bush would be eligible in the first survey that is taken after the next presidential election.

Twenty years is an arbitrary figure, though. Based on my personal observation, it would be wiser to allow 30 years — thus giving history additional time to render its assessment. Using that yardstick, the Reagan and Carter presidencies would not be eligible for ranking this time.

I'm going to stick with the 20-year restriction, though. There are many people who believe that sufficient time has passed to judge the Reagan presidency, which ended on Jan. 20, 1989.

Incidentally, for the record, C-SPAN's Top 10 were:

1. Abraham Lincoln (1861-1865).


2. George Washington (1789-1797).


3. Franklin D. Roosevelt (1933-1945).


4. Theodore Roosevelt (1901-1909).


5. Harry S. Truman (1945-1953).


6. John F. Kennedy (1961-1963).


7. Thomas Jefferson (1801-1809).


8. Dwight D. Eisenhower (1953-1961).


9. Woodrow Wilson (1913-1921).


10. Ronald Reagan (1981-1989).

Also for the record, the rankings of the last three presidents (who, as I've said, I would not consider because not enough time has passed since the conclusions of their presidencies) were 15th (Bill Clinton), 18th (George H.W. Bush) and 36th (George W. Bush).

It's worth noting, however, that George W. Bush was ranked behind nearly every 20th century president (the exception was Warren G. Harding) — and most of the 19th century presidents who finished behind Bush essentially passed the buck in the years before the Civil War — the exceptions to that were Andrew Johnson (next to last), who succeeded Lincoln after the war was over and became the first president to be impeached by the House and tried by the Senate, and William Henry Harrison (ranked 39th), who caught a cold that became pneumonia and took his life one month after he took office in 1841.

In fact, due to the brevity of his presidency, I don't think it's fair to rank Harrison at all. Even Pope John Paul I had a longer reign. But C-SPAN included James Garfield in the rankings, and his presidency wasn't much longer. He was shot four months after taking office and died two months after that — but at least he lived long enough to do something while he was president.

I don't suppose that I have any serious arguments with C-SPAN's Top 10, other than my reservations about including Reagan in such a list. Most of the presidents on the list had to face at least one national crisis — and did so quite well.

C-SPAN rates James Buchanan as the worst American president, which leads me to a technical point. There are 42 names on the list, but there were actually 43 presidents prior to Barack Obama. Grover Cleveland served as president twice, but his terms were not consecutive. I tend to think that his presidencies should be judged separately since they governed over two different time periods. But C-SPAN's list treats him as one president, and he falls right in the middle, at #21 (between James Madison and Gerald Ford).

I can't argue with Buchanan's placement, though. When Southern states began to secede in the waning days of his administration, Buchanan contended that secession was illegal. But he also took the position that going to war to prevent it was illegal — so he did nothing.

While it's far from certain, if Buchanan had taken some sort of action to stop the Southern states from seceding, history might have been changed — and the country might have been spared the anguish of the Civil War. So, based on that particular "what-if" from history, I would rank Buchanan as the worst president in American history.

It's interesting to look at C-SPAN's rankings and see what has changed since the 2000 survey. Most of the rankings haven't changed much. In most cases, a president moved up or fell back a spot or two, if that. But there are a few noteworthy changes.

Clinton, for example, is regarded more favorably than he was just before he left office. In 2000, he was ranked 21st. In 2009, as I mentioned earlier, his ranking is 15th.

And, inexplicably, Ulysses S. Grant jumped 10 spots in the rankings, from 33rd to 23rd. Why? I don't know. Perhaps it is because his presidency took a hard line against domestic violence, particularly the sort practiced by groups like the Ku Klux Klan, and was supportive of civil rights.

But his presidency was still plagued with corruption, and most historians would probably say that he was a better general than he was a president.