Reading economic tea leaves swirled around by activists

Obama tells Democratic National Committee that policies 'broke the back of the recession'

Posted: Sunday, February 07, 2010

On the weekend when the first National Tea Party Convention was held in Nashville, plenty of political tea leaves were being read by economists around the country, with mixed interpretations.

The tea-party activists who insist the country is going to hell in a hand basket shelled out very big bucks to hear their new rebel-in-chief, Sarah Palin, fire them up even more with her broadsides against Washington and the Democrats in charge here.

At the same time, however, the Labor Department finally reported a drop in the nationwide unemployment rate, from 10 percent in December to 9.7 percent in January. That should have been cause for cheering, except that it was also reported that 20,000 more jobs were lost at the same time.

Days earlier, the Commerce Department reported that the economy had grown by 5.7 percent by the end of 2009, the fastest increase in six years. Consumer spending also had risen by an annual rate of 2 percent, purchases of business equipment and software had leaped 13.3 percent in the fourth quarter, housing was up 5.7 percent and exports 18.1 percent.

All this inspired President Obama to tell a Democratic National Committee fund-raising dinner on Thursday night that his administration in its first year had "averted another depression. We broke the back of the recession," and that "the economy is growing again."

Meanwhile, however, the Dow Jones Industrial Average had just plunged 2.6 percent to only two points over the 10,000 mark attained a decade earlier. Democrats and Republicans alike could find statistical ammunition to argue the case for or against recovery either way they chose.

These mixed signals came as Obama was renewing his pitch for bipartisan cooperation in Congress on health-care reform and the rest of his legislative agenda, and for a new climate of comity in the nation's politics - while still reminding voters of the Republican lack of both so far.

Amid public frustration demonstrated in three major state elections in Virginia, New Jersey and Massachusetts - the latter depriving Obama of a filibuster-proof U.S. Senate - he accentuated the positive in his DNC dinner speech.

Proclaiming the nation's emergence from recession to the road to recovery through his $787 stimulus package enacted without Republican support, Obama ticked off a long list of first-year accomplishments, pep-rally style.

He listed support for equal pay for women, lifting the ban on stem-cell research, child health care reform, higher spending for veterans, consumer protection from credit-card ripoffs, mortgage fraud and predatory lending, and child protection from tobacco-company exploitation.

He cited his nomination of the first Hispanic-American woman to the Supreme Court, a new youth national-service law named for the late Sen. Ted Kennedy, and his call for repeal of the "Don't Ask, Don't Tell" law on gays serving in the military, this time with backing of the Pentagon.

He boasted of "a new era of engagement" with foreign partners, including efforts to stop the spread of nuclear weapons, dealing with climate change and banning torture as American policy in interrogation of suspected terrorists. And he cited his speech in Cairo launching "a new dialogue with the Muslim world" and U.S. leadership in responding to the earthquake chaos in Haiti.

All of this was in the way of lifting the spirits of the Democratic Party faithful who had been key to his election in 2008 but now face prospects of setbacks in the November midterm congressional elections. With the economy on the mend, he said, "now our most urgent task is job creation." It was "our No. 1 priority last year (though from most signs health-care reform, not achieved, really was) and our No. 1 priority this year."

Indicating he has not given up on health care, Obama criticized "deficit hawks" who "aren't willing to do a thing about (its) skyrocketing costs." Bipartisanship, he said, will not work "when I offer a hand I get nothing in return."

But with mixed tea leaves on the state of the economy still roiling the tea-party activists and other uneasy voters, many Democrats want to see more fight than conciliation in their president with the next election only nine months off.

• Jules Witcover's latest book, on the Nixon-Agnew relationship, "Very Strange Bedfellows," has just been published by Public Affairs Press. You can respond to this column at juleswitcover@comcast.net.



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