Krauthammer: Obama “Tried Finding Excuses” For Economy

Krauthammer: Obama “Tried Finding Excuses” For Economy. In his October 13 Washington Post column titled, “The scapegoat strategy,” Krauthammer claimed that President Obama has “tried finding excuses” for the economy, including “blaming America's dismal condition on Japanese supply-chain interruptions, the Arab Spring, European debt and various acts of God.” From the column:

What do you do if you can't run on your record -- on 9 percent unemployment, stagnant growth and ruinous deficits as far as the eye can see? How to run when you are asked whether Americans are better off than they were four years ago and you are compelled to answer no?

Play the outsider. Declare yourself the underdog. Denounce Washington as if the electorate hasn't noticed that you've been in charge of it for nearly three years.

But above all: Find villains.

President Obama first tried finding excuses, blaming America's dismal condition on Japanese supply-chain interruptions, the Arab Spring, European debt and various acts of God.

Didn't work. Sounds plaintive, defensive. Lacks fight, which is what Obama's base lusts for above all. [The Washington Post, 10/13/11]

But Experts Agree Global Events Have Hurt The U.S. Economy

Bernanke: “Little Doubt” That European Financial Crisis “Ha[s] Hurt Household And Business Confidence, And ... Pose[s] Ongoing Risks To Growth.” In his October 4 testimony before the Joint Economic Committee of the U.S. Congress, Federal Reserve Chairman Ben Bernanke stated:

Outside the United States, concerns about sovereign debt in Greece and other euro-zone countries, as well as about the sovereign debt exposures of the European banking system, have been a significant source of stress in global financial markets. European leaders are strongly committed to addressing these issues, but the need to obtain agreement among a large number of countries to put in place necessary backstops and to address the sources of the fiscal problems has slowed the process of finding solutions. It is difficult to judge how much these financial strains have affected U.S. economic activity thus far, but there seems little doubt that they have hurt household and business confidence, and that they pose ongoing risks to growth. [Federal Reserve, 10/4/11]

CNN Money: “Economic Growth Was Stifled By Temporary Factors” Such As Japanese Earthquake And “Arab Spring.” In an August 26 article, CNN Money noted:

Economic activity in the first half of 2011 has been much weaker than many had anticipated at the start of the year.

In the first quarter, economic growth was stifled by temporary factors, including supply disruptions stemming from the Japan earthquake and a spike in gasoline prices following the Arab Spring political uprisings. [CNN Money, 8/26/11]

New York Federal Reserve President Cites “Supply Chain Disruptions” Following Japanese Earthquake For “Some Of The Weakness In Economic Activity.” In August 19 remarks, Federal Reserve Bank of New York President and Chief Executive William Dudley pointed to “supply chain disruptions following the tragic earthquake in Japan” as a factor influencing “weakness in economic activity in the first half of the year.” From Dudley's remarks:

Some of the weakness in economic activity in the first half of the year was due to temporary factors such as the hit to household income from higher food and energy prices, and supply chain disruptions following the tragic earthquake in Japan. These restraining forces have abated and thus, we should see stronger growth in the second half. But it is clear that not all of the weakness was due to these one-time factors -- and in light of this, I have revised down my expectations for the pace of recovery going forward.

On the inflation front, the committee noted that inflation has moderated recently as energy and commodity prices have declined from their peaks -- having picked up earlier in the year, mainly reflecting higher prices for commodities and imported goods, as well as the supply disruptions from Japan. Longer-term inflation expectations remain stable, and the Committee now expects inflation to settle over the coming quarters at levels at or below those consistent with our mandate to promote full employment and price stability. [Federal Reserve Bank of New York, 8/19/11]