DAMAGING TO OBAMA – AT 8:43 A.M. ET:  American voters have made it clear that they regard unemployment as the key factor in the economy.  So this, from WaPo, cannot be considered good political news at the White House:

Unemployment is set to remain higher for longer than previously thought, according to new projections from the Federal Reserve that would mean more than 10 million Americans remain jobless through the 2012 elections - even as a separate report shows corporate profits reaching their highest levels ever.

Top Federal Reserve officials project that the unemployment rate, now 9.6 percent, will fall only to about 9 percent at the end of 2011 and about 8 percent when the next presidential election arrives, in late 2012. The central bankers had envisioned a more rapid decline in joblessness in their previous forecasts, prepared in June.

Growth that is much greater than anticipated would be needed to substantially reduce the jobless figure.

The corporate profits report is a bit deceptive.  Yes, corporate profits are extremely strong, but largely because corporations are learning to get along with lower overhead, which means employees and employee benefits.  For the American worker, this is hardly something to applaud.  And if those corporate profits are benefiting anyone, it's probably executives, not exactly a popular group in America right now.  (A late report says that Wall Street executives, warned about conspicuous consumption several years ago, are splurging again.  Being obnoxious is the game they play best.)

None of this is good news for the president.  The 2012 election, unless there's some catastrophic foreign event that intervenes, will again be fought on the economy, and Mr. Obama begins with a distinct disadvantage.  At the same time, the Republican-controlled House must now come up with policy proposals to show a contrast.  A Republican victory in 2012, even with a limping economy, is not guaranteed.

November 24, 2010