The Beer-Effect Gives America Hope

Call it the “The Budweiser Recovery.” A few days before surprising data on the falling rate of U.S. unemployment came out, the average American had already shown signs of feeling more wealthy and more content.

The message was in the bottle. In fact, it was in the bottles of Budweiser, Miller Lite and craft beers that the general public of American drinkers had recommenced consuming in great quantity. News arrived Tuesday that the sale of beer was increasing for the first time since “the horrible year” of 2008.

Three days later, the labor market has confirmed the progress, slow but sure, of the U.S. economy. The unemployment count for September showed a surprising drop, from 8.1 percent to 7.8 percent, the lowest rate of the last three and a half years.

The shift has been pleasing to the markets, investors and Barack Obama — who, among other things, is the first president in the history of the United States to construct a mini-brewery in the White House. Jack Welch, on the other hand, is angry. The legendary ex-head of General Electric, a Republican of iron, felt the need to publish on Twitter that, in his view, the data have been manipulated.

Manipulated, that is, by Obama’s men in order to help the president, who is experiencing a difficult moment after the first presidential debate with Mitt Romney. “Unbelievable jobs numbers,” Welch wrote to the masses who follow him on Twitter. “These Chicago guys will do anything… can’t debate so change numbers.” Welch’s accusation is ridiculous and completely without tact; it seems as if he regrets that millions of Americans have found work in the past few months.

Nevertheless, the inconsiderate use of 140 characters from the side of big business illustrates the tone of the battle over the American economy. At this moment, just a month from a very tense presidential election, the war is not fought in the stock markets, nor even among consumers and the unemployed.

The clash — gladiatorial and to the last drop of blood — is in the arena of politics. Which of the two candidates will be able to convince the famous “undecideds” — the needle that tips the scales of all presidential elections — that he can manage and accelerate the recovery?

Welch has a point on one thing (and one thing only): The great orator Obama was beaten by the robotic Romney in the first debate and has a desperate need to retake his favorite role. In theory, an economy on the road to recovery — with a housing market that is coming out of its coma and millions of consumers who seem ready to recommence spending (and not only on beer) — must help the sitting president.

The unemployment figures are at the same level as when Obama moved into the White House in January 2009, and there is no doubt that the worst is now past. “This is real progress,” said an economist with a giant investment bank on Wall Street. “With unemployment in decline, the road that Romney must take to arrive at the White House is in rhetoric.”*

The president’s men say that they are optimistic but not celebrating victory yet — and not just because there will be another release of data on unemployment before the election on Nov. 6.

The reality is that unemployment in America is still very high, above all among the middle class, who will decide the election. The number of jobs created by the U.S. economy every month is more or less half what the Federal Reserve wants to see in order to declare the economy “in recovery.”

And all this occurs despite the fact that the Federal Reserve is pumping hundreds of billions of dollars into the economy to keep rates low, stimulate the housing market and convince consumers and investors to take more risks with their own money.

“This is not the type of progress that the Federal Reserve wants to see,” said Jay Feldman, an economist with Credit Suisse, in yesterday’s Wall Street Journal. *

For Romney, however, the situation is difficult. On the one hand, he is not permitted to imitate Jack Welch and appear displeased at the drop in unemployment. But on the other, the good economic news weakens the key slogan of his campaign: I’m not the most exciting in the world, but I am a businessman who will be able to make ends meet in this country, freeing it from amateurish Chicago professors.

In the next debate, Obama will certainly remind his rival of the economic “successes” of his presidency, reminding him of the fact that that he inherited a country in recession from the Republican George Bush.

The most interesting parallel perhaps is that of Obama and another president-orator — Ronald Reagan — who in 1984 defeated Democrat Walter Mondale with an unemployment rate at 7.2 percent, more or less the same as today.

In that epoch, Reagan, who, like Obama, had governed four years already, managed to win despite the high number of Americans without work, because the economy was in a strong recovery after the crisis of 1981-82.

Obama doesn’t have the same optimal conditions: The growth is stentorian and “doped” by the Fed’s injections of liquidity; the common people still very much fear a “double dip” into another recession.

The direction, however, is the right one for the president. If Obama should remain in power despite the economic difficulty and his defeat in the first debate, he will certainly go to the mini-brewery and raise a pint “made in the White House.”

*Editor’s Note: This quote could not be verified.