Commentary Magazine


Topic: auto bailout

Reality Fact-Checks Obama

Although the Obama campaign is happy to report the recent drop in the unemployment survey, the Republican critique that the drop is due in part to those leaving the labor force and giving up on finding work is more than mere spin. That’s because of a simple truth, and one that has hurt the Obama campaign’s narrative of recovery: it is quite a challenge to convince an unemployed person that they have a job. At the beginning of the year, the Obama campaign tried selling the economy as being on the upswing, and voters pushed back.

In February, Democracy Corps released polling on the most recent State of the Union address, and here is what they wrote:

One of the President’s weakest operative frameworks highlights recent progress on job creation. This message is potentially dangerous for Democrats. During the State of the Union, we watched the dial lines go flat, with even Democrats peaking below 70 when the President highlighted recent jobs numbers.

In post-speech focus groups, respondents explained why this part of the speech did not resonate for them: first, and most importantly, they have not seen these jobs or felt the effects of job creation. But they are also deeply concerned that these jobs are not permanent, that these new jobs belie much deeper structural problems in the economy, and that the new jobs that have been created are far inferior to the more stable, full-time, well-paying middle class jobs that have been lost over the last decade.

Of course, this was almost a year ago, and in that time economic data has improved, so it’s possible the message would be better received today. But the point is, the Obama campaign had to drop certain overly optimistic language from the president’s campaign speeches because the public wasn’t buying it. Something similar may be happening with regard to the president’s message that al-Qaeda is on its heels.

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Although the Obama campaign is happy to report the recent drop in the unemployment survey, the Republican critique that the drop is due in part to those leaving the labor force and giving up on finding work is more than mere spin. That’s because of a simple truth, and one that has hurt the Obama campaign’s narrative of recovery: it is quite a challenge to convince an unemployed person that they have a job. At the beginning of the year, the Obama campaign tried selling the economy as being on the upswing, and voters pushed back.

In February, Democracy Corps released polling on the most recent State of the Union address, and here is what they wrote:

One of the President’s weakest operative frameworks highlights recent progress on job creation. This message is potentially dangerous for Democrats. During the State of the Union, we watched the dial lines go flat, with even Democrats peaking below 70 when the President highlighted recent jobs numbers.

In post-speech focus groups, respondents explained why this part of the speech did not resonate for them: first, and most importantly, they have not seen these jobs or felt the effects of job creation. But they are also deeply concerned that these jobs are not permanent, that these new jobs belie much deeper structural problems in the economy, and that the new jobs that have been created are far inferior to the more stable, full-time, well-paying middle class jobs that have been lost over the last decade.

Of course, this was almost a year ago, and in that time economic data has improved, so it’s possible the message would be better received today. But the point is, the Obama campaign had to drop certain overly optimistic language from the president’s campaign speeches because the public wasn’t buying it. Something similar may be happening with regard to the president’s message that al-Qaeda is on its heels.

Yesterday, Josh Rogin wrote that that the White House was bombastic about “decimating” the terror group’s leadership, but when evidence of al-Qaeda’s possible role in the Benghazi attack emerged, the White House began narrowing its claim territorially:

“Well, what we have said all along, what the president has said all along, is that … progress has been made in decimating the senior ranks of al Qaeda and in decimating al Qaeda central in the Afghanistan/Pakistan region,” adding that al Qaeda “remains our No. 1 foe.”

Carney repeated his qualification that al Qaeda is hurting in Southwest Asia, but not necessarily in North Africa, two days later.

And yesterday Fox reported that Obama had been saying that al-Qaeda is “on the run,” a phrase which seems to have been dropped as well: “But at the debate Tuesday and on the campaign trail Wednesday, the Al Qaeda reference appeared to have been walked back.”

The two claims about the economic recovery and decimating al-Qaeda are closely related, since they are the dual pitch of the Obama campaign’s accomplishments over the last four years. It also tells you why they haven’t retired the phrase “bin Laden is dead and General Motors is alive.” Both the economic argument (the auto bailout) and the national security argument (bin Laden’s death) are more closely targeted, narrow pitches. The auto bailout has always been pretty unpopular nationally, but less so in the Rust Belt. And the nation celebrated the demise of bin Laden, but isn’t ready to believe that terrorism is no longer much of a threat.

And both elements of the bin Laden/GM slogan line up with reality, whereas overstating the economic recovery and the victories over al-Qaeda are so self-evidently contradicted by the facts that they undermine the president’s credibility on these two important issues.

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Bin Laden’s Dead. How Long Will GM Live?

If you heard it once last week, you heard it 100 times. General Motors is alive and Osama bin Laden is dead. That juxtaposition of the federal bailout of the car manufacturer and the killing of the terrorist is supposed to be the argument for President Obama’s re-election. While both are good things, neither tells us much about the administration’s value. It is likely that GM would have survived in one form or another no matter what the president did. Nor, despite the unseemly chest-thumping braggadocio about the bin Laden operation, is it reasonable to assert that it was only possible because Obama was president. Nevertheless, this catch phrase, made popular by Vice President Joe Biden, is an effective campaign slogan. Indeed, the car bailout is thought to be a crucial factor in propping up the president’s poll numbers in key swing states like Ohio and Michigan that may decide the election.

However, for all of the cheering for GM plants done at the Democratic convention, the notion that the company that once dominated the industry has been set back on the path to prosperity by the president may be something of an illusion. Last month, Forbes published a sobering piece on the company’s prospects that should give even the giddiest of Democrats pause. According to Louis Woodhill, the GM revival is all smoke and mirrors:

President Obama is proud of his bailout of General Motors.  That’s good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.

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If you heard it once last week, you heard it 100 times. General Motors is alive and Osama bin Laden is dead. That juxtaposition of the federal bailout of the car manufacturer and the killing of the terrorist is supposed to be the argument for President Obama’s re-election. While both are good things, neither tells us much about the administration’s value. It is likely that GM would have survived in one form or another no matter what the president did. Nor, despite the unseemly chest-thumping braggadocio about the bin Laden operation, is it reasonable to assert that it was only possible because Obama was president. Nevertheless, this catch phrase, made popular by Vice President Joe Biden, is an effective campaign slogan. Indeed, the car bailout is thought to be a crucial factor in propping up the president’s poll numbers in key swing states like Ohio and Michigan that may decide the election.

However, for all of the cheering for GM plants done at the Democratic convention, the notion that the company that once dominated the industry has been set back on the path to prosperity by the president may be something of an illusion. Last month, Forbes published a sobering piece on the company’s prospects that should give even the giddiest of Democrats pause. According to Louis Woodhill, the GM revival is all smoke and mirrors:

President Obama is proud of his bailout of General Motors.  That’s good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.

Woodhill points out that the value of GM stock has crashed since it went public in November 2010. That leaves the federal government, which owns about 26 percent of the company, sitting on what he estimates is a loss of $16.4 billion. He predicts that the president will probably ride the decline of the company’s stock down to zero as its house of cards inevitably collapses.

Just as important, Woodhill asserts that the failure of the company’s cars to make headway against its rivals means that its decline is an inevitable result of failure rather than merely the vagaries of stock speculation. With Chevy’s Malibu failing to stock up against comparable models from Ford (the U.S. company that wasn’t bailed out by Obama), Volkswagen, Honda, Toyota, Nissan and Hyundai, he thinks there’s little reason to believe that anyone will be bragging about GM’s Lazarus act in a year or two. He believes that if Obama is re-elected, it is a certainty that the company will be back begging for help and that the president will be forced to oblige with another bailout.

If he’s right, rather than the bailout being a triumph for his administration, Obama’s bouquet to the United Auto Workers will turn out to be a cautionary tale about the folly of government intervention in the market.

A year from now, Osama bin Laden will still be dead, meaning that Barack Obama can go on bragging about the one bright spot in his career as commander-in-chief until the end of time. But if Woodhill is right, we will look back on the GM bailout as just another failed government boondoggle.

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Obama Spins His Unpopularity As a Virtue

Barack Obama unveiled his new campaign theme last night: the president is unpopular. More specifically, the president keeps enacting unpopular policies. If this sounds familiar, it’s because it’s also Mitt Romney’s campaign theme: he, too, wants you to know the president is unpopular.

The audience last night heard this point alluded to throughout—usually euphemistically as a willingness to make tough choices–but Obama himself explicitly brought it up. “If the critics are right that I’ve made all my decisions based on polls, then I must not be very good at reading them,” Obama said near the end of his speech. And he’s right.

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Barack Obama unveiled his new campaign theme last night: the president is unpopular. More specifically, the president keeps enacting unpopular policies. If this sounds familiar, it’s because it’s also Mitt Romney’s campaign theme: he, too, wants you to know the president is unpopular.

The audience last night heard this point alluded to throughout—usually euphemistically as a willingness to make tough choices–but Obama himself explicitly brought it up. “If the critics are right that I’ve made all my decisions based on polls, then I must not be very good at reading them,” Obama said near the end of his speech. And he’s right.

Even after the Supreme Court upheld Obamacare’s constitutionality, only 13 percent of the country, according to Gallup, wanted to keep the law in place as-is. (Only 20 percent of Democrats did, so opposition to the bill continues to be bipartisan—though to be fair, 45 percent of Democrats wanted the law to be changed to expand the federal government’s role.)

By now, everyone paying attention is familiar with the Obama administration’s promises on the stimulus bill, and the massive failure of those promises. Polls reflect that as well; heading into the 2010 midterms, 68 percent of Americans said the bill was a waste. As the Hill noted at the time:

The figure suggests that the cornerstone of the Obama administration’s agenda to bolster the economy has fallen flat with voters as elections loom in four weeks. The poll also hints that the White House’s effort to sell the bill to the public has been far from successful.

It’s safe to say that Americans’ impression of Obama’s “agenda to bolster the economy” hasn’t much improved, as last month’s Gallup poll found only 36 percent approve of the president’s handling of the economy.

Of course, the centerpiece of the Obama effort to brand himself as a public opinion-ignoring executive is the auto bailout. It was mentioned all throughout last night’s convention lineup, and was likely what the president was thinking about when he joked about his inability to read polls. But the auto bailout was so unpopular that this is how the New York Times described its improving numbers:

It was, to put it gently, unpopular. In polls at the time, 3 in 4 Americans said Washington should not broaden its effort to help the carmakers, as it ended up doing; nearly 6 in 10 poll respondents opposed the bailouts once they happened; and 54 percent of people said they were “mostly bad for the economy.” Largely negative polls accumulated through 2010 and 2011, too.

But more recent polls seem to show a thaw in public opinion — even if the auto bailout remains relatively unpopular, as far as government initiatives go.

Keep in mind, that was the “good news.” So yes, the president’s policies are unpopular. But why is he reminding the public of that? The plain answer is that he has no other options. There is no getting around the president’s failure on the economy or the unpopularity of his policies. So the only way to spin those numbers is to depict the president as a man who follows his gut instead of the polls.

How to tell the president has nothing to run on? Just read the New York Times’s editorial on Obama’s speech. Its headline? “President Obama’s Second Chance.” The president, so fond of golf, wants a mulligan. And trying to turn his unpopularity into a virtue is his last shot at getting that second chance.

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