1 Jun 2012

America’s economic woes are good news for Romney

I peered out of my kitchen window this morning at a leaden Washington sky and listened to the following forecast from a lugubrious sounding meteorologist: “Expect rain with a promise of hail, some severe thunderstorms and possible flooding”, adding, “Oh yes today is also the official beginning of the hurricane season”.

The man could have been an economist. The May US jobs numbers released today were dismal. The economy has only added 69,000 jobs, less than last month and a lot less than January when the economy spawned almost 200 000 jobs.

It now looks as if the positive employment figures from last winter, which made everyone think the recovery was gathering steam, were little more than a bat’s squeak of optimism, produced by unseasonably good weather and Father Xmas.

Stormy weather on foreign shores

The US economy is losing altitude and speed and as elsewhere the fingers of blame are pointing well beyond these shores. There is China’s economic engine, sputtering alarmingly: tractor sales are down 50 per cent since last year; the housing bubble shows signs of bursting; electricity consumption, another key indicator is down in key urban areas.

Let’s call China the impending hail storm.

The label of hurricane season naturally belongs to the eurozone, where political leaders are doing just about everything in their powers to fulfill the “End of Days” prophecy. As a result businesses that should be investing are sitting on festering piles of cash.

It is true that US consumer confidence has been getting a smidgeon more robust because of lower petrol prices. And the housing markets in former wastelands like Miami, Las Vegas and Southern California is showing signs of life.

But these are not enough to resurrect that creature from the past, the Great American Shopper. It is also not nearly enough to offset the gloomier picture elsewhere. As we have seen over and over again in this global economy no country is an island.

Trouble ahead for Obama

So the patient is weak and we have run out of medicines and treatments. Interest rates couldn’t be lower. Inflation in this country is negligible. Even talk of another splurge of quantitative easing is unlikely to do the trick.

All this spells trouble for Obama’s hopes of re-election. The economic mood of the country is set now in the summer and not just before election day in the autumn. Every opinion poll shows that the race between Obama and Romney is knuckle-whitening close in key swing states like Virginia, Ohio, Colorado and Florida.

Romney’s only real appeal, and the only one he has been running on, is that he is an economic fixer. His message is more repair and retool than hope and change. And although he delivers it with the charisma and rhetorical flair of an emergency plumber it may be just what Americans want to hear when the house is leaking.

Most of the crazy Romney Republican stuff was aired during the freak show primaries. There are, I am guessing, very few nasty Romney surprises waiting to make the headlines.

What am I saying? If this economy doesn’t get its pulse back, prepare yourself for a Romney victory in November.

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