On Monday, Sept. 19, President Barack Obama made a Rose Garden speech to unveil his $3 trillion plan to shrink the deficit and create jobs, with about half of the savings coming from spending cuts. Most of the rest will come from taxes. Despite an aggressive sales tour by the president-mostly to states that will be battlegrounds in the 2012 election-he's finding few buyers.
The reasons for the lack of support are many. Conservative columnist David Brooks said the president's plan isn't big enough: "This plan will not solve our problem." For Tea Party conservatives, tax increases are simply non-starters. Moderates and liberals hate the president's proposed cuts.
Still, Obama soldiers on. In addition to his speaking tour, the Democratic National Committee launched a multimillion-dollar ad campaign to promote the plan. The title of the campaign, "14 months," denotes the number of months until the 2012 election. It's a title that is either direct, ironic, or cynical, depending on your point of view.
The DNC's point of view is to bet heavily on the campaign and the plan, perhaps guessing it's their last shot to move the economy and change perceptions of Obama's performance before vague uneasiness becomes stubborn resistance. So the ads are running in the swing states of Florida, Colorado, Nevada, Ohio, North Carolina, and Virginia, as well as in Washington, D.C. The DNC hasn't released dollar figures, but media experts estimate the buy to be in the tens of millions of dollars.
They don't seem to be moving the needle much. A Rasmussen poll conducted a week after the ads started running put the president's approval rating at 44 percent, the lowest of his presidency.
Those who think the Federal Reserve does too much meddling may be able to take consolation in its latest move. On Sept. 21, the Fed announced a portfolio rebalancing designed to drive down interest rates on long-term government debt. The move was largely expected, but the stock markets hated it, both here and abroad, and moved sharply downward.
Analysts say the news troubled investors for two reasons: First, the Fed's statement offered a bleak assessment of the future of the U.S. economy. Second, the Fed purchased bonds that mature after 30 years. That is as far out as you can go. It means that the Fed is out when it comes to affecting interest rates in the future. For some analysts who think that market forces should be allowed to work more directly, that's actually good news.
When is bad news good news? When it's not as bad as it could have been.
In late September, regulators closed banks in Virginia and California, lifting to 73 the number of U.S. bank failures this year. If that sounds like bad news, consider this: The number of closures has dropped significantly this year as banks have worked their way through the bad debt accumulated in the recession.
By this time last year, regulators had shuttered 127 banks. In all of 2010, regulators seized 157 banks, the most in any year since the savings-and-loan crisis two decades ago. Those failures cost the Federal Deposit Insurance Corporation, which insures bank deposits, around $21 billion. The FDIC has said 2010 likely was the high-water mark for bank failures from the Great Recession.
Florida, Georgia, and Illinois also have seen large numbers of bank failures.