Americans Like the McCain Plan

For Barack Obama, once again under the cross fires from the recession, of which he has said “Keeps me awake at night,” and from the Republican opposition, is making progress every day on the uphill path towards economic recovery. The president’s long day started in the morning with the arrival of data on initial claims for unemployment benefits that rose last week from 35 thousand units to 626 thousand shares, the highest since 1982 and beyond the expectations of analysts. The news bulletin is even heavier for those workers who received benefits for more than a week rose to 4,778,000, a record number since the surveys were first conducted in 1967. Also, the Department of Labor will announce today that another 525,000 jobs were lost in January, bringing the unemployment rate to 7.5%. ADP experts have confirmed that the administration can not delay in administering emergency employment, as it was not the only one to be broadsided by the macroeconomic front. Torpedoes are coming from the consumption slump, where the big retail chains reported another decline in business prior to December, the fifth consecutive decline in orders to factories.

In contrast are the figures on corporate productivity, which rose by 3.2%. Much of the forecast, thanks to the aggressive cuts that Corporate America has made on staff (the heaviest since the mid-seventies) and which registered the strongest growth since 2004 (+2.8%) in 2008. The framework is not in Obama’s favor if one part is walking among the ruins of the recession while there is the risk of losing the other, according to analysts, in the war of public opinion for the 900 billion stimulus. Despite enjoying much popularity, the president has lost support for his American Recovery and Reinvestment Plan since the Republicans have launched a counteroffensive in the Senate and on conservative talk radio. According to experts, Obama’s message on the need to “spend” is not as convincing as compared to the more engaging message to “cut” supported by the opposition. And to guide the operation of the Grand Old Party in the upper chamber of Congress is John McCain who has made an alternative proposal of 445 billion dollars based on broader relief which is gathering support among Republicans and fiscally conservative Democrats.

The return of the warrior, left defeated on November 4th, forced Obama to defend himself and call his former presidential rival to find a compromise and overcome the obstruction. Meanwhile, the Senate has softened the “Buy America” clauses, collecting the endorsement of the European partners who had shouted about the U.S. protectionist conspiracy. An agreement was also reached on aid toward the purchase of real estate, with an allocation of 15,000 dollars of relief for those purchasing a home. From these agreements, Obama is again trying to gain the upper hand with an editorial in the “Washington Post” in which he whipped up the American people: “Without the stimulus, the crisis will become irreversible: risking another five million jobs.” The concept was reiterated during the visit yesterday to the department of Energy, one of the neuralgic centers of the recovery sought by Obama: “The time for talk is over – you must act now.”

The president also spoke of the financial knot and leaked the news of a possible announcement regarding the bailout financial plan “TARP” on Monday after being briefed by Treasury secretary Timothy Geithner. The news, which is a prelude to an agreement reached within the administration on the bad banks, bounced the Wall Street’s indexes: the Dow Jones closed at +1.34%, Nasdaq at +2.06%. While investors are putting hope in the renewed optimism, the president will embark on Air Force One, his first presidential flight, towards Williamsburg, Virginia with a mission to convince the meeting of elected Democrats – many of whom have criticized his economic policies – that without unity in the country there is no future.