Will Obama Ever Find an Economic Message?

Trust me?

With Election Day barely a month away, President Barack Obama hit the campaign trail today for one of his regular yet fruitless attempts to convince voters to trust him on the economy. Polls suggest they don't -- but that doesn't mean his opponents in Congress would do a better job.

Part of the president's problem, of course, is that the recovery has been profoundly disappointing. As of August, for example, employment among prime-age workers was still 3.9 million jobs short of what was normal before the recession. Long-term unemployment is still eroding the skills and motivation of millions, threatening to permanently impair the economy's growth potential. Median household income, adjusted for inflation, is down about 8 percent from where it was when the recession began in 2007.

Some of Obama's problem undoubtedly has to do with the way he talks about the economy. U.S. businesses have generated 10 million new jobs over the past 4 1/2 years, he noted in his speech today. "All told, the United States has put more people back to work than Europe, Japan and every other advanced economy combined," he said.

True enough, but no solace to the millions of under- and unemployed Americans. So how would Obama's opponents improve the picture?

Republicans argue that Obama's efforts to extend health care to more Americans, along with new regulations aimed in large part at preventing another financial crisis, have placed a stifling burden on U.S. businesses. They say reversing these policies, together with tax breaks paid for largely by cutting programs aimed at poorer folk, would unleash corporate America's animal spirits.

Cutting corporate taxes is a fine idea, but it's wrong to say that the business environment is the primary obstacle to recovery. As the president himself noted in his speech, Bloomberg News has reported how well corporate America is doing in the Obama era. Earnings per share among companies in the Standard & Poor's 500 Index are at record levels, helping drive a nearly threefold increase in the index since March 2009.

So where does all this leave voters? One side in this debate is essentially arguing that his policies have prevented the economy from getting a lot worse. The other is arguing that their policies could help it become a lot better. The first is undoubtedly correct, but that's hardly a campaign slogan. The second is a better message, but the substance is dubious.

There is at least one obvious way to improve the economic outlook: government spending focused on getting people back to work, in part by rebuilding the country's decaying infrastructure. Combined with moves to get the government's longer-term Medicare and Social Security costs under control, it could put the economy on a much healthier trajectory.

The issue is whether this obvious solution becomes more likely or less if Republicans gain control of both chambers of Congress. If they don't, their opposition to it will almost certainly continue. If they do, however, Republicans may decide they have to deliver something more than gridlock.

Will they? That is the question -- far more speculative than whether Obama could have managed the recovery better, or how Republicans would have harmed it -- that voters will have to answer for themselves.

Editors: Mark Whitehouse, Michael Newman

To contact the editor on this story:
David Shipley at davidshipley@bloomberg.net