As much as the media tries to distract voters with things like Romney's Olympics gaffe or the political beliefs of the head of a fast-food chain, the issue voters actually care about most--the economy--continues to shift away from them and Obama. Even if the media continues its radio silence on the deteriorating economy for the next four months, it won't affect the outcome of the election. The numbers, as reflected in today's terrible GDP report, are so bad that voters don't need the media to report the news. They feel its affects every day.
Today's GDP report confirmed what we have long perceived, i.e. that the economy is slowing to a grinding halt. Back in April, I picked apart the 1st Quarter GDP report and warned there were ominous signs that the economy would continue pulling back this quarter. But two things in today's report suggest I wasn't pessimistic enough.
In addition to reporting 2nd Quarter GDP, today's report also revised a host of numbers from previous quarters. While most quarters, covering Obama's tenure in the White House, were revised downward, the 4th Quarter of 2011 saw a significant uptick, rising to 4.1% growth from an initial estimate of 3%. That is a very robust level of growth. Of course, it didn't last.
The initial estimate of 1st Quarter GDP growth was 2.2%, which indicated a slight drop from the initial 4th Quarter estimate of 3%. Today, though, the government revised 1st Quarter growth down to 2%. Comparing this with the now 4th Quarter number of 4.1% shows how precipitous the drop-off in the economy actually was. It turns out economic growth has halved between the 4th and 1st Quarters. Today's number confirms the economy's downward trajectory.
The landscape is so littered with bad economic data that it seems superfluous to list it all here. Worse, there is almost no sign that the economy will turn around in the coming months. Hundreds of companies, reporting their quarterly earnings this week, have forecast lower revenues for the rest of the year. Commenters predicting any kind of turnaround in the next few months are living in a land of unicorns and pixie dust. I would take an even-money bet that GDP growth turns negative in the 3rd Quarter.
The problem for Obama is that, according to a recent poll for The Hill, a majority of voters blame him and his policies for the current economic climate. As the economy worsens, this factor alone will make his reelection unlikely. In an odd way, though, the media's silence on the economy will hurt Obama in the end. The media's attempts to distract voters with trivial non-economic issues also distracts the Obama campaign from making any kind of counter-narrative on the most important issue of the day, the economy.
Since elected, Obama has had one message on the economy: raise taxes on the wealthy and "invest" in infrastructure, education, and green energy. It hasn't worked and, increasingly, voters are seeing through the rhetoric. The economic data will get worse, and the window on Obama's chance to reverse voters' impressions is closing rapidly.
This goes a long way to explain why the media is desperate to talk about anything other than the economy.
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